mortgage arrangement fee?
Discussion
Hi All
Looking to re-mortgage our home to get a better rate and to raise funds for a house extension.
We had a chap from a mortgage broker round last night who my wife arranged through MSE. I felt rather dubious about this but went along with it. We are with Nat West at the moment and I know we can get a better deal if we went elsewhere so this is what we want to do.
We asked about fees etc and this is where it got a bit vague. He started by saying that he was salaried etc and not on commision etc. Fair enough, but didn't really give us an answer on how his employers got paid.
He seemed pleasant enough, and my wife seemed to like him and believe me she is cynical and untrusting of any profession so if she approves then so be it.
I have a couple of questions that perhaps someone may be able to answer. On checking the website it does state and I quote:
"Your initial consultation is obligation free. There will be a fee for mortgage advice. The amount will depend on your circumstances. A typical fee would be 3% of the loan amount. The precise amount will depend on your circumstances and will be discussed and agreed before you make an application."
I don't need to advise what the fee would therefore be on a 170k mortgage, to me that does sound exceesive for arranging a mortgage.
I have just gone on to MSE and input our details and what we require, and it has provided a list of mortgages with rates etc and details on how to apply.
In light of this can you advise what the mortgage advisor is doing any differently to earn his £5100 out of me?
What am i missing here?
You're not missing anything. If their website says it's a 3% fee then that's what it is as all mortgage websites are obligated to details what they charge as a fee.
To be fair, I've not see a 3% fee in a long time, not since the subprime days of circa 2007!
3% is extortionate.
Drop me a PM if you like, I won't charge you a penny
To be fair, I've not see a 3% fee in a long time, not since the subprime days of circa 2007!
3% is extortionate.
Drop me a PM if you like, I won't charge you a penny
3% is very high in the current climate. I have heard of Brokers out there who charge 3% and include a Legal Package, Valuation Fee and their Broker fee.
However you should be able to find a decent deal with maybe Free Legal, maybe free valuation or a refunded valuation or everything free.
We charge as a Brokerage but nothing like that amount....I dont think we have charged anything more than 1% for the last few years and thats on small loans of £50,000 or less as Lenders pay buttons on those.
However you should be able to find a decent deal with maybe Free Legal, maybe free valuation or a refunded valuation or everything free.
We charge as a Brokerage but nothing like that amount....I dont think we have charged anything more than 1% for the last few years and thats on small loans of £50,000 or less as Lenders pay buttons on those.
Sarnie said:
Drop me a PM if you like, I won't charge you a penny
I recommend you do the above. Sarnie found me a great rate and provided me with lots of helpful advice through out the process (which thus far has been totally hassle free - switching my utility supplier was much more stressful!).jonny70 said:
Is 3% to arrange a typical residential mortgage not a huge sum of money? whats the average fee?
What were you getting for 3%?
it states 3% of the loan amount, i take that to read 3% of the mortgage loan, in my case that would be £5100.What were you getting for 3%?
I consider that to rather large!
I have just had a response:
"We can charge up to 3% of the balance and have to state the fact. In reality we only charge 3% for commercial mortgages as they take 6-9 months to complete and an awful lot of time and effort.
In your case the fee will be nowhere near that amount (it will be around 1%) but will still provide our services for the lifetime of your mortgage"
Ok, so that is £1700, that is still pretty expensive isn't it?
What am I misunderstanding here. I have just gone into MSE and entered my details and it has provided a list of mortgages and good rates and I have looked at the fees etc, and it provides all the links on how to apply.
Why would I pay someone 1700 quid to do that?
Please note that I do not want to be appear confrontational and I am genuinely interested as I do not want to make a mistake, but cripes, £1700 quid!
jonny70 said:
Is 3% to arrange a typical residential mortgage not a huge sum of money? whats the average fee?
What were you getting for 3%?
3% is largely unheard of in this climate. Sub Prime Fees were that but even then some companies had a Maximum Fee of £2995.What were you getting for 3%?
This would be £5100 to arrange what seems to be a straight forward remortgage. Ok Lenders dont pay a great deal, around £500 or so as Procuration Fees are pretty much the same these from all lenders these days give or take a 0.01% here or there , but that is madness.
Be interested in which Company is charging that.
eric twinge said:
jonny70 said:
Is 3% to arrange a typical residential mortgage not a huge sum of money? whats the average fee?
What were you getting for 3%?
it states 3% of the loan amount, i take that to read 3% of the mortgage loan, in my case that would be £5100.What were you getting for 3%?
I consider that to rather large!
I have just had a response:
"We can charge up to 3% of the balance and have to state the fact. In reality we only charge 3% for commercial mortgages as they take 6-9 months to complete and an awful lot of time and effort.
In your case the fee will be nowhere near that amount (it will be around 1%) but will still provide our services for the lifetime of your mortgage"
Ok, so that is £1700, that is still pretty expensive isn't it?
What am I misunderstanding here. I have just gone into MSE and entered my details and it has provided a list of mortgages and good rates and I have looked at the fees etc, and it provides all the links on how to apply.
Why would I pay someone 1700 quid to do that?
Please note that I do not want to be appear confrontational and I am genuinely interested as I do not want to make a mistake, but cripes, £1700 quid!
Its not just as easy as seeing a rate these days unfortunately. Lenders have differing criteria and each lender can see applications submitted to other lenders through systems they have in the background. We Brokers all use research software we pay for to fine tune results but even that is only a guide and final checks with a Lender direct are always wise as what is listed in criteria could have changed the day before.
BlueNGT said:
jonny70 said:
Is 3% to arrange a typical residential mortgage not a huge sum of money? whats the average fee?
What were you getting for 3%?
3% is largely unheard of in this climate. Sub Prime Fees were that but even then some companies had a Maximum Fee of £2995.What were you getting for 3%?
This would be £5100 to arrange what seems to be a straight forward remortgage. Ok Lenders dont pay a great deal, around £500 or so as Procuration Fees are pretty much the same these from all lenders these days give or take a 0.01% here or there , but that is madness.
Be interested in which Company is charging that.
jonny70 said:
BlueNGT said:
jonny70 said:
Is 3% to arrange a typical residential mortgage not a huge sum of money? whats the average fee?
What were you getting for 3%?
3% is largely unheard of in this climate. Sub Prime Fees were that but even then some companies had a Maximum Fee of £2995.What were you getting for 3%?
This would be £5100 to arrange what seems to be a straight forward remortgage. Ok Lenders dont pay a great deal, around £500 or so as Procuration Fees are pretty much the same these from all lenders these days give or take a 0.01% here or there , but that is madness.
Be interested in which Company is charging that.
I thought it didnt sound right. for an average house buyer witha average mortgage to pay 3% loan fee sounds crippling esp when you can apply for mortgages yourself!
aka_kerrly said:
3% is an expensive broker fee especially if the broker is also taking commission (aka remuneration) from the lender.
Typically a lender will pay a broker 1-1.5% of the loan amount so that the broker doesn't have to make an additional charge.
1-1.5% of the loan?????????????? I wish!!Typically a lender will pay a broker 1-1.5% of the loan amount so that the broker doesn't have to make an additional charge.
Try 0.3%!
aka_kerrly said:
3% is an expensive broker fee especially if the broker is also taking commission (aka remuneration) from the lender.
Typically a lender will pay a broker 1-1.5% of the loan amount so that the broker doesn't have to make an additional charge.
We arent talking Equity Release here are we? Typically a lender will pay a broker 1-1.5% of the loan amount so that the broker doesn't have to make an additional charge.
1 to 1.5%....yikes we havent had those since 2007 on Sub Prime Lenders.
well he has emailed me back and confirmed it would be 1700GBP.
I do not feel at all comfortable with this so I expect that I shall be sending an email to Sarnie soon!
Stupidly we came off our fixed rate with Nat West 3 years ago and have done nothing about it.
I can't see that his service is worth £1700.
I do not feel at all comfortable with this so I expect that I shall be sending an email to Sarnie soon!
Stupidly we came off our fixed rate with Nat West 3 years ago and have done nothing about it.
I can't see that his service is worth £1700.
I really couldnt understand what the guy was getting paid for when we went to see one. I'd already done a cursory scan of the market using only online tools and got an agreement in principle from my bank. the product i found (via money supermarket)
he told me that he could access all vendors, give advise from the market as whole, and even see products that werent advertised.
he actually told us that the product we found was by far the best deal for us - i respected his honesty, but it's left me a bit unsure if i'd visit another one.
maybe our requirements were a bit too straight forward.
he told me that he could access all vendors, give advise from the market as whole, and even see products that werent advertised.
he actually told us that the product we found was by far the best deal for us - i respected his honesty, but it's left me a bit unsure if i'd visit another one.
maybe our requirements were a bit too straight forward.
eric twinge said:
well he has emailed me back and confirmed it would be 1700GBP.
I do not feel at all comfortable with this so I expect that I shall be sending an email to Sarnie soon!
Stupidly we came off our fixed rate with Nat West 3 years ago and have done nothing about it.
I can't see that his service is worth £1700.
To be honest, the main thing that would put me off, is the FSA regulation states that you have to declare your fee at the outset of any meeting/conversation. It certainly shouldn't be left to you to delve into the T&C's of their website after he has gone.I do not feel at all comfortable with this so I expect that I shall be sending an email to Sarnie soon!
Stupidly we came off our fixed rate with Nat West 3 years ago and have done nothing about it.
I can't see that his service is worth £1700.
If he can't be bothered to do his job properly from the outset then how is the rest of the application going to go?
Edited by Sarnie on Thursday 14th February 12:56
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