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RlU89
Posts: 1 Newbie
We are purchasing our first house and have been recommended a broker by some friends. The broker has been great so far explaining everything we need to know and has given us a fair few hours of his time.
We have only been looking for houses a few weeks and although we have seen many, have found one we both love - we didn't really expect this so soon and perhaps that's our fault. We have therefore had to move quickly and our broker sorted the DIP in a day in order to submit a bid, which we won.
The broker has now recommended a mortgage with £500 cashback. The mortgage illustration shows the broker will receive a commission of around a £1000 from the lender (the loan is around £277k). We expected this as our broker told us at the start he was paid by commission and would only ask for a recommendation/good review from us if it all went well.
However there is a section on the mortgage illustration where we must pay a £450 broker fee.
Our broker has said that our cashback will cover this fee, which is why he has recommended the cashback mortgage.
Is this broker fee normal, if he is also taking £1000 in commission? Especially when he said he was commission only? Or is this fee for something else?
We have also found a couple or mortgages ourselves which are better by about £900 per month.If we opted for one of these instead is it bad etiquette not to use the broker or do we ask him to beat the ones we have found ourselves?
The broker has come highly recommended and has been great so far but I am worried why we're forking over our mortgage cashback when he is claiming the commission already, and he has originally agreed he takes no fee?
Urgent advice required please.
We have only been looking for houses a few weeks and although we have seen many, have found one we both love - we didn't really expect this so soon and perhaps that's our fault. We have therefore had to move quickly and our broker sorted the DIP in a day in order to submit a bid, which we won.
The broker has now recommended a mortgage with £500 cashback. The mortgage illustration shows the broker will receive a commission of around a £1000 from the lender (the loan is around £277k). We expected this as our broker told us at the start he was paid by commission and would only ask for a recommendation/good review from us if it all went well.
However there is a section on the mortgage illustration where we must pay a £450 broker fee.
Our broker has said that our cashback will cover this fee, which is why he has recommended the cashback mortgage.
Is this broker fee normal, if he is also taking £1000 in commission? Especially when he said he was commission only? Or is this fee for something else?
We have also found a couple or mortgages ourselves which are better by about £900 per month.If we opted for one of these instead is it bad etiquette not to use the broker or do we ask him to beat the ones we have found ourselves?
The broker has come highly recommended and has been great so far but I am worried why we're forking over our mortgage cashback when he is claiming the commission already, and he has originally agreed he takes no fee?
Urgent advice required please.
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Comments
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If you've found a deal yourself that's cheaper by £900 a month, I don't think I'd be bothering with a broker anymore!0
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I smell a rip off.
Every mortgage we use a broker and never paid s fee. Each time they have found a better deal than we could. The broker should be giving you a list of companies they search.
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This can not be right!
There is no issue with a broker charging a fee and getting commission, however you need to be told about the fee upfront prior to completing a factfind.
The broker can not just recommend a deal with cashback and then they get the cashback.
I charge fees and get commission, but it is all disclosed upfront and my recommendation is based on the best deal, not which will pay cashback so I can keep it. That cashback is for the customer. I am quite annoyed at what you are describing as it gives the rest of us a bad name.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
This can not be right!
There is no issue with a broker charging a fee and getting commission, however you need to be told about the fee upfront prior to completing a factfind.
The broker can not just recommend a deal with cashback and then they get the cashback.
I charge fees and get commission, but it is all disclosed upfront and my recommendation is based on the best deal, not which will pay cashback so I can keep it. That cashback is for the customer. I am quite annoyed at what you are describing as it gives the rest of us a bad name.
Agree with all of what you write.
The bit that leaps out to me is the disparity in monthly payments between the deal the broker is offering and what the applicant has been able to find themselves. Either there's something misunderstood along the way, or the broker is putting forward a pretty poor product.0 -
That £900 a month is clearly wrong. I do not think the cheapest product on the market against the most expensive would be £900 a month apart.
Even £900 a year I would be sceptical about.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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