09 Jan Mortgage Broker Fees
Mortgage Broker Fees… How much are they? This is an exceedingly difficult question to answer.
The fact is that charges vary from one broker to the next. So, to be clear about what you can expect ask about, or research, the cost of receiving advice and administering your mortgage before you agree to use any mortgage broker.
Here is an idea of what might be charged and how:
Like MDFS some mortgage brokers do not charge any fees at all, as they are happy to proceed on the payment received from mortgage lenders. This means that you get the full advice and administration service without any cost to yourself. At the end of the day you will have enough to pay out with things like stamp duty, solicitor fees, surveys etc
Some brokers may charge by the hour. Caution should be exercised here as costs can quickly escalate if there are any complications with your mortgage advice and application. Try to get an estimate of how many hours the mortgage broker is going to charge you for.
A vast number of mortgage brokers will charge a fixed amount or fee, but make sure you know exactly what that fee is going to be and what is included. Typically, the average fee is £500, according to the Money Advice Service. However, the charge is not set in stone and we have seen fees in excess of £1,000. These fees can also be charged upfront or on completion of the mortgage transaction.
Some mortgage brokers charge a percentage of the mortgage you are applying for. Therefore, with higher value properties you could end up paying a lot more than the average mortgage broker fee. For example, if you are taking out a mortgage for £350,000 and being charged 1%, you will be paying them £3,500….
Occasionally you will come across a mortgage broker that uses a combination of charges. They might charge you an hourly rate, or percentage as well as getting commission from the mortgage lender.
It is worth noting that all mortgage brokers receive the commission from the lender. This means that any client fee charged will be in additional income for the broker. Mortgage Broker Fees information was supplied by MDFS Mortgages.
Why not read about how much you can borrow on a mortgage.
If you would like more information about mortgages we recommend the Money Advice Service.