Mortgage broker - to fee or not to fee?

[NoPlanYet]

Hope this is a sensible place to post this. If another board would be better please let me know.

Would you choose an independent broker who charges fees, and if so how much is a reasonable fee?

I previously used a broker who charged no fee and I was very happy with the service he offered - he suggested a wide range of mortgages from different companies which would suit me and helped me pick the best one.

However lovely broker retired, and I have just had a conversation with a friend's broker who charges £500 per mortgage application (if first purchase fails you get a free seocnd go, if this also fails 3rd go is £200).

By per-application I mean that since I'm considering keeping my flat and taking some equity out to act as a deposit for a house purchase, I'd need two application: one for the flat's new mortgage and one for the house's mortgage.

That's a grand in fees! Why should I pay this if I can get the same for free?

I asked the broker this question and he obviously gave me a very slick answer about how he was really good and he's telling me about the BTL option whereas the previous broker hadn't been through this with me (I'd never asked and he'd never offered) but I'm not convinced.

What do others do?

[Shakey15000]

It's just as easy, and free obviously, to do the research yourself and save a grand. Even with a broker you supply/send/fill out forms yourself.

[maybebabybee]

We just used London and country (fee free) and had a great experience. Really informative and fast. Would recommend!

[Shakey15000]

Sorry, meant to add, I deal with two mortgages as well. It's a pain yes, but I'd rather save the money.

[bananamonkey]

We recently paid a £249 fee for our local independent broker. We ended up having to apply for a different mortgage as we had a few issues with our initial lender and he didn't charge us another fee for the second application Because we had the issues for us it was worth the fee. The fee was also advertised on their website - not sure if they all do this!

I've heard really good things about London and Country, they are independent and they charge no fees and do it all over the phone. There's information about them on here if you search and on the MSE website.

[Bearbehind]

There are lots of independent brokers who don't charge a fee. This is in addition to, what I'd call more generic brokers like L&C.

Unless your case is particularly complicated they just get their commission from the lender.

A broker who charges you a fee on top of that for simple cases is just ripping you off IMO.

[Bearbehind]

I wouldn't recommend going it alone though, brokers knowledge is invaluable, you just don't always have to pay for it.

[mrsmortis]

You always pay for it even if there is no upfront fee. The question is, do you know what you are paying? If you don't pay up front then the broker will be taking commission. It should be clear how much and when he gets paid. But you need to check and make sure that you don't end up paying more that way.

[AdventureMathematical]

I am a mortgage adviser and I charge a fee. The reason for this is that it reduces the pressure on the relationship between me and the client.

There is a large amount of upfront work when arranging a mortgage, a good mortgage adviser will spend time with you making sure that any recommended course of action is best for your circumstances. This should include a conversation where you DON'T take out a mortgage. Having done all the upfront work if a broker hasn't charged a fee they need you to take out a mortgage to get paid, they might not have a conversation about alternatives, they might not mention if they know you can get a better deal from your existing lender. these are just examples, I feel that the fee clarifies that I work for you with your best interests at heart.

Having said this, I charge one fee of £500 which is transferable should the application fail or you decide to buy a different property or whatever.

Good luck with your mortgage(s)!

[museumum]

I paid £250 (not in London) for an awkward self employed application. Best £250 ever spent!

[Bearbehind]

I'd be pretty pissed off paying £500 to be told not to apply for a mortgage!

[AdventureMathematical]

Sorry bear I should have clarified take out a mortgage via me. But even so for some cases it could be that a client hasn't realised the full implications of their intended course of action. Debt consolidation is a good example where you may end up paying more over a longer term than you would have over the short term with a higher interest rate. A client should be fully informed of this and be able to walk away without any undue pressure.

[NoPlanYet]

Thanks for the other side Alternative.

TBH I'm not sure how much the obligation is relevant for me, I want to buy a house and can afford the mortgages we're discussing so I don't really care whether I buy it through x y or z person. If the only difference is £500 or not then I'm inclined to go with 'not'.

We don't have any debt consolidation to think about.
It's tricky to judge because our previous broker was a family friend so we trusted him to do what's best for us. Bit selfish of him to retire really

[FluffyPersian]

We used a chap in London from Douglas Allen.

Douglas Allen are horrendous as an Estate Agent (my sister used to work for them), but there's one broker who charged us £250 and has been brilliant. Very responsive, non-pushy... our mortgage was approved with absolutely no issues at all.

He recommended life insurance / contents insurance etc.. and once again, showed us the different deals and let us do any research we wanted before committing.

My sister recommended him to myself and one of my other sisters, so 3 out of 4 of us have used him ... and we all think he's brilliant.