Mortgage Broker Fees

Grumpy_Home_Buyer

Having followed all the good advice, and found a mortgage broker who was "whole of market", and had "no fees", imagine my surprise when reading the small print of the mortgage offer.

"The lender will pay the intermediary... £392 in cash and benefits. All of this fee will be passed onto you."

So, I understand that I wont pay for it up front, but I will pay for it somwhere along the line! A little cunning or is this right?

Your thoughts please...

Swift1_3

why would they do it without a fee? surely they need some money from either you or the lender otherwise what's the point? or have i misunderstood?

Grumpy_Home_Buyer

If the intermediary has 'no fee', but you pay the lender, who gives the fee to the intermediary. Why the need for 'fee free' intermediary?
Or why not just pay the intermediary? As you say, they wouldn't do it for free.

mountainchrisriver

I suspect it is just the money that the bank/building society pays as commission to your broker for getting your custom... you won't pay this... :rolleyes:

The idea of an intermediary (amongst many other things) is that they can do all the leg work and searching for the product most suited to you... also they can end up sorting out any issues without you having to do too much... well worth it in my humble opinion...

Dan_Collins_2

Nobody does anything for free or the love of work! However I think the KFI has that section included in error. This phrase would be used if he was charging you a fee and passing on commission. I would tell him about the section because the way it reads and what he is telling you he is not getting paid a thing!

dunstonh

I agree with Dan. It looks like the KFI is showing the commission rebate option that you would get if you were on fee basis.

i.e. if you agreed a fee of £300 you would pay the £300 by cheque and when the mortgage is complete you would get back the commission of £392 making you £92 better off. This method is typically used by those that are independent rather than whole of market (a small minority with mortgages) or those that work to customer agreed remuneration (again a small minority at this time on the mortgage side).

When the KFI is produced, there are various options that are selected to decide what goes in the print. It looks like the wrong tick box was selected.