Mortgage Brokers...

Dick_here

...we're always hearing that you should go to a fee-free, whole of market broker. Questions that immediately spring to my mind then:

How do non fee-free and/or non whole of market brokers survive ? Is it that some people prefer paying a fee as they feel that only then will they get impartial advice ? Is it that non whole of market brokers simply lie ? After all, they're hardly likely to say "no, we're only 75% of market brokers" when you ring them up, and you're hardly likely to be able to prove them wrong.

And what percentage of brokers are actually fee-free, whole of market ? Is it really that easy to get one ?

ukwoody

My partner is an independent broker. All brokers get paid a fee one way or another. The difference is some also charge the customer an additional fee, on top of what is known as thier Proc Fees from the lenders. The reasons are various for this. My partner does not normally charge, but there have been occaisons when she has, but she has to inform the customer of the charges.

Brokers who charge a fee are forced to be upfront about them and many people are quite happy to pay it for what ever reason. maybe they think they will get a better service, maybe they think that person is the best for the job, maybe they think "if I'm paying a fee, the broker will be more inclined to look after me rather then himself/herself", or maybe even just like and trust them. (Personal hunch here, I think we'll see more brokers levelling fees soon due to the sheer amount of time, effort and cost it is taking to sort mortages out now, but that is purely my own opinion).

Many brokers who are not whole of market get very good deals both for the customer and themselves just by being tied to a panel of lenders. I believe limited market brokers are bound by law to inform you of their status,(open to correction on that) which is why for example if you look at banks they always say they can only introduce to X brand of packages.

As for numbers I guess thats a hard one, but there really are lots of fee free whole of market brokers out there. It would also only be right to say there is nothing wrong with the great majority of both fee charging and limited market brokers, most are decent very hard working guys and girls who will do their utmost to get you the best deals they possible can.
Woody

minimike2

I sometimes charge fees - it depends on how complex the case is. If its just a straight forward easy RM 50% LTV fly through type job I charge nothing. Rarely earn a lot for these but they usually result in referral business, so it all adds up

Dick_here

Can anyone advise how to know if a 'fee-free, whole of market' is actually that ?

AndrewSmith

!!!!!!_here wrote: »

Can anyone advise how to know if a 'fee-free, whole of market' is actually that ?

Ask how the broker is paid (should be detailed on their Initial Disclosure Document), and ask how many lenders they have access to and which one's they don't.

If they are true whole of market there will be only a handful of lenders such as HSBC and First Direct etc that they do not deal with on a fees free basis.

Conrad

I charge fees most of the time. I like a firm, up front commitment.

With any service there are always a range of cost options, whether we are talking builders, lawyers of hairdressers.

Some hairdressers charge £200, others £15.00. This cost spectrum can only exist where end users percieve added value. There will always be a market for both spectrum polarities.

Thats not to say cost is always an indication of service outcomes of course.

HelpWhereIcan

Conrad wrote: »

Thats not to say cost is always an indication of service outcomes of course.

:eek: omg - don't tell me you're acknowledging that both Fee Free and Fee charging can provide good service!!! I think I need a lie down, the world must be ending ... I seem to have thanked Conrad.

Seriously though, Conrad has a point and there will be instances when paying a fee will be worth the additional service or expertise of the broker you are dealing with.

Andrew has given the best way to find out whether they have any restrictions in the lenders they can use.

The way the broker gets paid should always be declared upfront and I always advise people to walk away if they think the broker is being vague or evasive on this subject.

Try ringing a couple and always make sure to ask the questions Martin suggests in http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1101649966,86816#step2.

Dan_Collins_2

I think the way things are going the smaller broker practises will have to charge a fee.

dunstonh

When you think about it investment advisers have been charging fees since year dot. Mortgages didnt go that way but it makes sense to go fee based and refund commission when its payable. That way you can then include the non commission paying lenders and present your recommendation not only taking the fees and rates into account but also the commission rebate.

You can then market yourself as totally unbiased, independent and a commission rebater when commission is payable. Plus, you get rid of time wasters at the start.