How Much are Mortgage Broker Fees?
When it comes to sorting your mortgage during your house move, seeking the advice of a mortgage broker is the smart decision. They will offer you access and information to many different lenders and products, giving you to the most-efficient solution to your financial situation.
Mortgage Broker Fees Explained
When approaching a mortgage broker for advice, you need to understand two things:
- If the broker will charge you for their service.
- If so, how the broker will charge you for their service.
A mortgage broker generally has a number of ways to make their money:
|Mortgage Broker Fee|
|Fixed Fee||A mortgage broker charges a fee at a fixed rate. This charge will apply to all their mortgage advice. E.g. £600 for their service.|
|Hourly Rate||The more advice you receive from them by the hour, the more you will be charged.|
|Percentage||Some mortgage brokers charge by accepting a percentage of the loan agreement (mortgage). E.g. A 1% fee on a mortgage worth £150,000 would be £1500 paid to the broker.|
|Combination||Some mortgage brokers use different variations of these methods of payment. E.g. They charge a set fee, but they also receive commission too.|
|Fee-Free||The broker will be paid a commission by the lender (bank). As such, you can receive mortgage advice for free.|
Benefits of Hiring a Mortgage Broker?
Mortgage Brokers do not work for a bank. They are independent and therefore must be officially licenced to offer their services. They act in your best interest – and not the banks – then they have a duty to be open with their fees and honest about their support.
However, if a mortgage broker has ties with a lender – not necessarily working for them – then there would be limited advice on offer. This kind of broker would have limited options and push instead for mortgages offered by the bank they have ties with. However, this could also mean that you are offered an exclusive mortgage, one not found by going to the lender directly.
An independent mortgage broker will know whether a particular lender is bogged down by applications, too. They can recommend you the most suited lender at the right price, ensuring that the application gets processed for you in good time.
How Much Do Mortgage Advisors Charge?
As shown in the table above, a mortgage broker’s fees can be charged a number of different ways and be determined by the size of the mortgage.
On average, however, mortgage brokers are generally paid around £500-£600 for their fixed fee, with other costs - such as a percentage of the loan - added after completion.
When Do I Pay My Mortgage Broker?
Mortgage Brokers can be paid at different times. Using your first consultation, they must thoroughly communicate with you at which point in the application process you will be expected to pay and by how much. There can be multiple points of payment so make sure you understand how much you will be charged altogether before proceeding.
How Liable are Mortgage Brokers?
If you have gone ahead and received advice from a mortgage broker, any such problems that may arise after this service can be directly linked to the broker's service. Problems are rare, but you can be confident that the liability will not lie with you. You have done everything you can to ensure that you will be able to make repayments and a professional, qualified advisor has given you the best options to take.
Ultimately, this is why it is so important to seek a mortgage broker when you are thinking of applying for a mortgage. Their advice and experience are invaluable and if by some chance there is some future trouble, then you will be suitably covered.
Where Can I Find the Best Mortgage Advisors?
Compare the best mortgage brokers online
At My Big Move, you can find the best mortgage brokers from across the country, both local to you and nationwide. We ensure that all our advisors are recommended and suitably qualified before they become a partner with us.
With our quick and easy comparison tool, you can search for the best mortgage advisor for your home loan and get your house move kickstarted!