Do Mortgage Brokers Charge A Fee?
Using a mortgage broker is a fantastic way of getting a great mortgage deal that is suitable for you in the long term. We are often asked if mortgage brokers charge a fee, and the answer is as murky as housebuying itself.
Some mortgage brokers do charge a fee of some sort, and some don’t. So is it better to go with a free mortgage broker? Not always.
Confused? I’m not surprised! Let me clear it up for you!
What Type Of Fees Do Mortgage Brokers Charge?
There are a number of ways mortgage brokers get paid.
This is how we work at Burnett Mortgages. It is a flat rate. You are charged one fee for all our work. You know in advance how much you will pay and that is it.
No hidden extras and no nasty surprises. If it takes us longer because your case is complicated, you don’t pay any extra. If you are a first time buyer we wont charge this fee until your mortgage offer has been issued
The beauty of this is it is in our interest to be efficient. No dragged heels here!
Some brokers charge a percentage of the value of the property.
This can be good if you are buying a low-value property but not so great if you are buying a property with a hefty price tag. You could be paying way over the odds for mortgage advice and brokerage.
Most mortgage brokers earn a commission from the lender. Typically this is around 0.35% of the cost of the loan. So, as an example, a £100,000 mortgage would earn the advisor £350. However, this percentage can vary.
You wouldn’t pay for this. The lender would pay it.
A lot of brokers, including us here at Burnett Mortgages, charge a combination of a Broker Fee coupled with the commission from the lender
Some mortgage brokers charge a fee but calculate it by the hour.
If you are going down this route with a broker, be sure you get an idea of cost upfront. You don’t want to be hit with a big bill on top of all the other things you need to pay for.
Should I Pay For A Mortgage Broker?
Not all mortgage brokers charge fees, and that doesn’t necessarily mean they are better or worse than any other broker.
Or maybe you are wondering if you even need a mortgage broker?
You don’t have to use a broker at all. You could go straight through your bank or to a high street lender.
However, mortgage brokers have access to a range of mortgages that the general public doesn’t. Especially whole of market broker firms like us here at Burnett Mortgages.
We aren’t tied to a particular lender so can scour our resources, use our experiences and leverage our professional relationships to find you a fantastic mortgage.
The Money Advice Service advise using a mortgage broker because it helps to ensure your mortgage is suitable for your situation and lifestyle and will help you navigate the murky waters of borrowing money.
If you don’t take advice, you could end up:
With the wrong mortgage for your situation, which would be a costly mistake in the long run.
Being rejected by your chosen lender, because you didn’t understand the restrictions clearly or what circumstances the mortgage was designed for.
As an industry, we are regulated by the Financial Conduct Authority (FCA). We need to ensure the mortgage we arrange for you is suitable for your unique circumstances.
This is to make sure you will be able to afford it long term.
Using a mortgage broker to find a mortgage means greater choice, advice from a regulated and competent person, and the option to go to the Financial ombudsman if it turns out the mortgage wasn’t suitable after all.
Are Mortgage Broker Fees Worth it?
Well, we can’t speak for everyone but ours certainly are!
We charge one fee for our services. After that, any further work we do with you doesn’t cost you a penny. This includes remortgages.
We want to be your mortgage broker for the whole of your mortgage-paying life. We work hard to build and maintain our relationships with our customers.
Part of this is going the extra mile. Lots of people promise it, not many do it! But we do.
We hold your hand throughout the horribly messy, painful process of buying a house or remortgaging. It is hard enough without worrying about your mortgage on top.
If you are considering a mortgage or remortgaging, why not have a chat with me to see if I am the right fit for you? I would love to hear from you.