Do we have any mortgage brokers in the house

What it says - I need to ask a question about commissions, I think my client is being ripped off.

[_Stretchie_]

Originally Posted by Ed

I think my client is being ripped off.

Not the best ad for your services

[jambo]

Originally Posted by _Stretchie_

Not the best ad for your services

Cheeky sod! Ed and his lovely ladies did a fine job of soliciting me into my home...

We did, however, use an independent mortgage broker.

I'll make way for the useful responses now.

Jambo

Hmm, no brokers posting so I'll put it to the org.

My client instructed me only yesterday and I got the mortgage offer today. She's buying a house for £132,500, mortgage is £115,615 (so 87% LTV - quite high these days, most lenders would not go above 75 - 80%).

The broker has faxed me client's letter of authority for me to give an undertaking to pay their fees on completion of the mortgage.

The amount is £1,995.

What do you think? As a contrast my fee for buting the place is £450.

I have never paid my broker!! He gets paid by the mortgage company for his work not by me. That is a really high fee even if your client is paying them. Is it a flat fee cos its not even based on some kind of percentage?

Well done for picking it up, I would check back with your client asap.

Originally Posted by Ed

Hmm, no brokers posting so I'll put it to the org.

My client instructed me only yesterday and I got the mortgage offer today. She's buying a house for £132,500, mortgage is £115,615 (so 87% LTV - quite high these days, most lenders would not go above 75 - 80%).

The broker has faxed me client's letter of authority for me to give an undertaking to pay their fees on completion of the mortgage.

The amount is £1,995.

What do you think? As a contrast my fee for buting the place is £450.

the mortgage brokers that me and drew have spoken to on recommendation from either my parents or sister and her husband, both of them have used the couple in question in the past. Have not charged either my sister or my parents as their fee has been paid by the company giving them the morgage.

I certainly would not pay that much for somebody to find me a mortgage

[jambo]

My knowledge of Mortgages is out of date, as I've not checked since we mortgaged this place about 2 1/2 years ago. We had a good depostit, but borrowed more than your client is.

I do remember that an average "arrangement fee" from the mortgage company was something like £500 - £1,000

This fee was largely from the company offering the mortgage, rather than being a fee that was paid to the broker. There were some exceptions, Northern Rock being noted for having very high arrangement fees of £1,000+ but this was generally offset by them having some of the lowest interest rates around.

If you think £2,000 seems like a lot of money, (and on the face of it, it seems about twice what we were asked to come up with), it may be worth suggesting to your client that they get a 2nd opinion, or even just spend 30 minutes on something like http://www.moneysupermarket.com/

If the deals offered there are substantially better then they'll know they've not been given the best deal for them. As, over the course of a mortgage every £1 you borrow becomes nearly £3 when it's paid back, a higher arrangement fee for a lower interest rate can work out benneficial over the course of a mortgage if your're going to stick with it long enough.

Jambo

[timwilky]

I too would advise your client to shop around, I went the old traditional route years ago and asked my building society for a mortgage. So really don't understand the raison d'etre behind brokers, unless it is to make money out of sourcing a mortgage for those unable to get one or too damm lazy to do the leg work.

As for who pays, I would guess if paid directly to the broker as a commission or paid by the client as a fee. There is no difference in the longer term the client pays either way.