Mortgage advisor fees

empfun

Hi all!

I am looking to buy my first property and have been to an estate agent where their independent mortgage consultant charges a fee of 1% of the value of the mortgage.

Is that reasonable? Also what are your experiences with the independent mortgage advisors as compared with banks? Thank you!

Dan_Collins_2

I think 1% is high but then again if your borrowing a low amount its not so high! You can get fee free but they may not tell you about First direct, Direct line and a few others. Is he whole or market? Is it a corporate estate agent?

UK007BullDog

Banks will sell you their product. An independent whole of market broker has access to all (99%) deals out there.

If you dont want to pay the fee then try to find a fees free broker.

The estate agent will try and force you to see their broker. But you can look elsewhere if you dont want to. Just stick to your guns.

AndrewSmith

empfun wrote: »

Is that reasonable? Also what are your experiences with the independent mortgage advisors as compared with banks? Thank you!

You cannot really compare the two. Banks are tied to their own product range and the adviser will push the particular product they are being targetted for at that time.

True Whole Market brokers have no such loyalty or targets and, as such, will show the most suitable product for you, not the lender.

The main difference is that a bank adviser works on behalf of the bank, a whole market broker works on behalf of the client.

ixwood

..And of behalf of themselves obviously. You can't expert someone who makes their living from commissions not to take the commission into account.

dunstonh

1% as a percentage seems high. Especially if they are taking commission as well. If they are returning the commission or offsetting the commission then its not so bad.

Is there a cap on the 1%? i.e. if your mortgage is large then it seems you pay a lot more for the same level of work compared to a smaller mortgage. So, is the maximum that the 1% can equate to?

AndrewSmith

ixwood wrote: »

..And of behalf of themselves obviously. You can't expert someone who makes their living from commissions not to take the commission into account.

So do solicitors, barristers, accountants, lawyers, surveyors etc. All people who work on behalf of the client but also get paid in various ways for the work they do, so it could be said they work on behalf of themselves as well. Basics of business, do a job, get paid for it. Simple.

Yes a broker earns commission, but why shouldnt they? Would you prefer all brokers to begin charging a flat fee? DAmned if you do, damned if you don't. However the basis of a recommendation is certainly not commission driven.

Also any reputable broker using a correct compliance proceedure is not able to recommend a product based on the level of commission. There is a strict process which has to be followed to ensure that the advice given is what is most suitable for the client. All recommendations have to be justified with sourcing evidence in writing to both the client and to a thrid party compliance audit process.

MBM

Walk away from him. He will have no better deals than a whole of market advisor or website.

Conrad

As ever we do not know the customer so we're all guessing but certainly when I've heard of brokers demanding 1% fees, it is because they are offering to be very 'flexible' indeed, if you know what I mean.

jediknightwarrior

Sorry, Andrew, I'm not trying to pick a "fight" or "broker bashing" but what you say is not true.

Solicitors, barristers, accounts, lawyers, surveyors are all fee earners and not paid by commission.

When was the last time you recommended First Direct, Direct Line etc? Unless you are purely fee based it is impossible to claim that a WOM adviser's recommendation is not influenced by commission.

IMHO, since the start of the year, the difference between nil commission products and ones that pay commission is currently too great to be ignored.

Dan_Collins_2

jediknightwarrior wrote: »

Sorry, Andrew, I'm not trying to pick a "fight" or "broker bashing" but what you say is not true.

Solicitors, barristers, accounts, lawyers, surveyors are all fee earners and not paid by commission.

When was the last time you recommended First Direct, Direct Line etc? Unless you are purely fee based it is impossible to claim that a WOM adviser's recommendation is not influenced by commission.

IMHO, since the start of the year, the difference between nil commission products and ones that pay commission is currently too great to be ignored.

That has nothing to do with the commission, more to to with funding and who has more cash to lend. Directline have already increased rates and it wont be long and First Direct will do the same!

I agree that we dont offer those lenders, however to say that I would send a client to a lender based on commission is an insult to 95% of brokers.

Would you do your job for free or send you client to a different company and earn nothing?