Mortgage broker fees (went direct instead)

easierways

Keeping this short and sweet, asking on behalf of a friend.

Applies for a mortgage via a broker with a hefty fee as was expecting the process of acquiring a mortgage to be complex.

A few days after this application and having heard nothing, said friend becomes curious about applying directly with a lender.

Applies directly with a high street lender, not the same one the broker was applying to (as far as I know) and the mortgage is approved and offer received.

Decides to proceed with that offer on the basis that it is better to go with the sure thing.

She is planning to inform the broker of this today.

What happens to the mortgage broker fee which would have been due upon receipt of mortgage offer?

Would they be looking for something for doing some admin?

She is not opposed to paying something, but is concerned they might look for the whole fee.

es5595

I’d send a message to the broker, definitely before they get back to her, saying due to a change of circumstances they no longer need a mortgage. 

The broker should have provided paperwork upfront about the fee, so check and see what that says too. 

[Deleted User]

What were the terms of the contract? That will tell you what, if anything, is due.

K_S

@easierways The broker would have shared a 'terms of business' , 'scope of service', etc document which details the specifics of when the fee is due and under what circumstances.

I also charge only on offer and while I would be annoyed at having to cancel a pre-offer application, I wouldn't really bother with chasing the applicant for a fee.

Having said that, other brokers might take a stricter line, especially if the broker application goes on to offer and the client just goes awol. If it does go on to offer, the fee would be due and if the broker wished to, he/she could go down the small-claims route and get paid.

easierways

From what I have been told, the terms state that the fee is for advice, application, and the securing of a mortgage offer itself. 

But also, perhaps crucially, that the fee would not be payable unless there was a mortgage offer.

To me, this suggests that if anything, a portion of the fee would be payable for the work carried out up until now. 

At least, that’s what seems fair to me.

Just curious to know peoples positions on this as the terms appear to leave some room for interpretation. 

In that there are no specific terms in relation to termination.