Avoiding mortgage broker fee

[17GoingUnder]

Broker has arranged a DIP from a lender, the fee they've quoted is only payable once I'm in receipt of a firm offer.

Other than annoying the broker, are there any pitfalls to approaching the lender direct?

I would potentially be saving £500.

I’ve never used a mortgage broker always gone direct to lender. Does the contract you presumably are in stipulate issues with this?

It’s unethical of course, and it’s an offer you wouldn’t have been aware of without the brokers help. And it’s the brokers job, and how the broker pays their bills etc

but it’s up to you.

Why did you use a broker in the first place? Are they getting you a better deal? Have you signed a contract with the broker you may not be allowed to contact the lender directly after they have done the leg work.

As a broker, please pay the fee, they will help you with so much more than just the mortgage. I charge a fee and co-ordinate the whole transaction on behalf of the client, I chase solicitors, estate agents and the lender, help the client with all paperwork, visit the client to witness their documents and special delivery them back. I also rate check throughout the transaction and adjust the rate if the lender reduces their rates before completion. There is a lot of skill, training and time which goes into the job so it's 100% worth paying a fee.

I never paid a fee, I think they got the from the lender. I used a broker twice and the lender even gave us £100 for sticking with them. My mortgage rate was 1.84%…it’s gone up now of course:(

Use a broker that doesn’t charge anything?

Agree, got my friend a mortgage when high streets wouldn't touch her and the rate is competitive too, she is very happy.

She got a cash bonus from the lender, which paid the broker fee.

@BeKeenRavensaid it much nicer than I would! It’s really shitty to get the work done and not pay the fee.

Brokers have access to rates that are not always available direct.

They also do all the full application and full affordability checks.

A lot of work is done before the application goes in and the broker trusts you will pay the fee.

Sometimes the same deals aren't available direct as the broker does some of the work for the lender so they can offer the deal cheaper.

Why did you use the broker? Is you situation complicated?

I work in a role where clients can get ohr service directly or via a broker. Simmilar to mortgages however we have made a business decision not to upset the brokers who send us lots of work and if a client has already had a quote from a broker we cant take them on directly, so there may be something like that in place

One could argue it's unethical to charge £500 for something I could get for free.

Commission would have come out if your monthly payments if no fee.

No. You agreed upfront so that doesn’t work as an argument.

So why did you go through a broker in thw first place?

It's a lot of money we're talking about here, not a small sum. And some brokers are fee-free.

Yeah will be looking into this.

I didn't agree to anything, the broker themselves has said I'm free to go away and consider options.

Then you should have asked one of them. Why go to a professional, get them to do the work and then not pay? You knew they charged a fee when you picked them. In you job - is it ok for people to not pay you after you’ve done the job?

If you could have done it for free, why didn’t you?

This is nonsense, you voluntarily signed up for their services.

Plus you couldn't get their time or their expertise for free.

They actually suggested you go away and consider whether to pay their fee or go around them and avoid it?

I'm exploring various options including brokers who don't charge fees.

Why wouldn't I avoid a fee if I can? The broker's terms are that the fee is only payable upon a firm offer - if the lender is prepared to offer me the same (or better) deal and cut out the middle man, I'd be stupid not to take advantage of that.

The brokers that are free tend to get a kickback from the lender and it will be set out in your mortgage offer. I am a conveyancer and I have seen kickbacks as high as £3k. Which will be factored into your mortgage costs.

The broker's terms are that the fee is only payable upon a firm offer.

I haven't signed up for anything. If there was a firm offer in place, it would be a different matter.