Mortgage Broker Fees Explained
The Mortgage Market can be a bit of a minefield at the best of times which is why finding the best mortgage adviser is all so important. If you are looking to take out a new mortgage then you are probably asking yourself whether you should be paying your mortgage broker a fee for the service provided or whether you should try to avoid the cost by finding a mortgage adviser who does not charge. When all said and done you may have enough fees to pay as it is such as stamp duty, survey and conveyancer fees, so why pay a fee to an adviser who will also get a commission from the lender called a procuration fee?
You can make an appointment with one of the high street banks or building societies where the advisers do not charge directly for their service. The downside is that you will only be offered a suitable mortgage from that lender only. This is where a “whole of market” mortgage adviser or a specialist adviser comes in handy depending on whether you are looking for a standard residential mortgage or something more specialised such as an overseas or commercial mortgage for example. Mortgage Brokers can generally look at deals across the whole of the marketplace to get you the most suitable deal for you and this can save you a lot of money as well as getting a mortgage that meets your needs.
The truth is that some mortgage brokers charge and some do not. Due to increased regulation and the rising costs of running their business, charging fees is has become essential for many mortgage advisers. The mortgage sector is one of the most regulated industries in the country and unfortunately the high cost of regulation falls mainly on the mortgage broker and these fees have to be passed onto the consumer somehow down the line.
There is no real formula as to why some brokers charge and some do not but those that do not charge are now in the minority. Some advisers justify charging fees because they are experienced and probably in high demand. Specialist mortgage advisers who work in niche markets such as overseas mortgages or commercial mortgages charge fees because the process is much more involved. Administration support is another reason why a mortgage broker may want to levy a fee whilst others work for larger brokerages who charge fees in exchange for the benefits that they provide.
Here at Mortgage Guardian we work with a range of mortgage brokers who can look after your every need. Most charge a fee for the work that they do and a few do not. If we are looking at Overseas, Commercial or High Net Worth Mortgages then expect a fee. We only work with advisers who charge a fair amount for the work that they do and you won’t pay a fee for our service.
As far as fees go, some brokers do not charge a fee whilst others charge a reasonable flat fee for the service they provide. In some cases there is a choice whether to pay a flat fee and allow the broker to keep their procuration fee or for you to pay a higher fee and get the commission refunded back to you. When taking a Overseas and Commercial mortgages expect to pay a flat fee plus a percentage (usually around 1%) of the loan amount. It is worth it for the experience that they bring to the table.
If the thought of fees bother you then please give us a call and we will put you in touch with one of our specialists.
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