I’m amazed that people pay an £200 – £500 on average as a broker fee to arrange their mortgage. I put this down to one of two reasons:
Lack of awareness. The client is simply unaware that exactly the same level of advice is available for free.
They somehow believe that by paying a fee they will achieve better advice.
Slowly, people are switching on to the fact that they do not need to pay for this advice. The broker receives a generous commission from the lender (normally 0.3% to 0.5% of the loan amount). But they also earn commissions on the life insurance and the home insurance. This is a healthy business to be in! To charge a broker fee as well is simply profiting from people’s lack of awareness.
A factor not really understood is that paying this broker fee, every 3 years, over the life of a typical 25 year mortgage, where the fee is added to the loan can snowball massively.
For example, consider a £200 broker fee. This can cost you in excess of £2,500 over the term, whereas a £500 fee can grow to a bloated and staggering £6,000. This is wasted money, but critically it’s YOUR wasted money, and you get nothing to show for it! Mortgage advisor Sheffield
The simple matter is the best mortgage deals, for your situation, are easily found by any broker worth his salt. I would bet that 99% of both fee and non-fee charging brokers are using the same industry standard software.
So next time you need to remortgage and you want to source the best mortgage deals, shop around for sure, but make sure the broker of choice is a non-fee charging one. And if you’re happy…spread the word!
If you do this, slowly, the word will spread, and the old fashioned, ‘keep you in the dark’ way of doing things will slowly disappear. You’ll also have the satisfaction of knowing that not only are you keeping honest, ethical mortgage brokers in business, but you’ll also be saving you friends, family and work colleagues a bucketful of money over the years.
So my advice? Make sure your broker is whole of market and can access all the lender deals out there, and isn’t restricted to a limited panel of lenders. And of course, make sure they do not charge any broker fees.
I hope you enjoy spending the money you’ve saved!