Originally posted by TheMortgageSquad
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All brokers will receive a commission from a lender for arranging the mortgage, it is not a choice between whether they charge a fee to the client or take a commission from the lender. I think Ladymuck may be confusing the way a mortgage broker is remunerated with the way an Independent Financial Advisor is remunerated on something like a pension or investment plan, as they do either charge a fee or take a commission, not both (to my knowledge).
If a broker charges a fee, it is likely this will be on top of the commission, or procuration fee as it is known, that the lender gives to them. Whether the broker passes any or all of that procuration fee on to the client is up to the broker but to my knowledge, most do not pass it onto the client.
Some brokers charge a fee upfront (I believe this is how Cleerly may work?), others charge it upon issue of a mortgage offer and others charge it upon successful completion of the mortgage only (that's how we charge our fee for transparency).
Fees brokers charge do vary so perhaps speak to a few brokers. You may find you build a better rapport with one over another and are happy paying a slightly higher fee to go with your broker of choice or you may just wish to pay the lowest fee. There is no right or wrong.
What a broker can do for you is take away a lot of the stress and hassle. It's obviously our area of expertise so we will know all the lenders who can assist based upon your circumstances and requirements and which is the best one for you, offering the best mortgage.
The way I look at it is I could technically represent myself in court should I ever have to appear in court (hopefully I won't ever have to!) but it's not my forte so I would pay a Solicitor/Barrister to do it for me as after all, it is what they specialise in and it would very likely take them less time and be more accurate/successful than if I did it myself. That's not to say I couldn't do it myself though if I had the time and desire to do so but I'd rather put my time toward doing what I do best and leave the stress and hassle of something I have limited knowledge in, to a professional who specialises in it.
Aside from the time/hassle saving, us brokers do have access to lenders not available directly to the public and even with lenders who are available to the public we sometimes have exclusive rates we can access too which the public cannot.
Furthermore and quite possibly the most pertinent point at the moment with the way the market is right now, is that if you go direct to a lender like Halifax and submit an application on one of the rates they have available at that time, they would not normally let you know if they reduce their rates and a better rate becomes available to you. If you're looking to submit a remortgage application up to 6 months in advance of your current rate ending or going through a purchase application which is not likely to complete for a few months, that is a lot of time in the market where rates could come down. Any broker worth their salt would continue to monitor rates after the application has been submitted and notify you should something better came along. I have had a client where we managed to secure cheaper rates for them five times between submitting the initial remortgage application and when they eventually came to complete. The rate they ended up completing on was 0.86% cheaper than the original rate we submitted. The savings they made on those rate reductions over the duration of their mortgage rate, covered the broker fee we charged by a multiple of 25!
If a broker charges a fee, it is likely this will be on top of the commission, or procuration fee as it is known, that the lender gives to them. Whether the broker passes any or all of that procuration fee on to the client is up to the broker but to my knowledge, most do not pass it onto the client.
Some brokers charge a fee upfront (I believe this is how Cleerly may work?), others charge it upon issue of a mortgage offer and others charge it upon successful completion of the mortgage only (that's how we charge our fee for transparency).
Fees brokers charge do vary so perhaps speak to a few brokers. You may find you build a better rapport with one over another and are happy paying a slightly higher fee to go with your broker of choice or you may just wish to pay the lowest fee. There is no right or wrong.
What a broker can do for you is take away a lot of the stress and hassle. It's obviously our area of expertise so we will know all the lenders who can assist based upon your circumstances and requirements and which is the best one for you, offering the best mortgage.
The way I look at it is I could technically represent myself in court should I ever have to appear in court (hopefully I won't ever have to!) but it's not my forte so I would pay a Solicitor/Barrister to do it for me as after all, it is what they specialise in and it would very likely take them less time and be more accurate/successful than if I did it myself. That's not to say I couldn't do it myself though if I had the time and desire to do so but I'd rather put my time toward doing what I do best and leave the stress and hassle of something I have limited knowledge in, to a professional who specialises in it.
Aside from the time/hassle saving, us brokers do have access to lenders not available directly to the public and even with lenders who are available to the public we sometimes have exclusive rates we can access too which the public cannot.
Furthermore and quite possibly the most pertinent point at the moment with the way the market is right now, is that if you go direct to a lender like Halifax and submit an application on one of the rates they have available at that time, they would not normally let you know if they reduce their rates and a better rate becomes available to you. If you're looking to submit a remortgage application up to 6 months in advance of your current rate ending or going through a purchase application which is not likely to complete for a few months, that is a lot of time in the market where rates could come down. Any broker worth their salt would continue to monitor rates after the application has been submitted and notify you should something better came along. I have had a client where we managed to secure cheaper rates for them five times between submitting the initial remortgage application and when they eventually came to complete. The rate they ended up completing on was 0.86% cheaper than the original rate we submitted. The savings they made on those rate reductions over the duration of their mortgage rate, covered the broker fee we charged by a multiple of 25!
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