Open, honest, fee free Mortgage Broker, usually!
I’m proud to be a fee free Mortgage Broker for most cases. I don’t understand why some Mortgage Brokers are so cagey about fees and have minimal information about them on their websites. There isn’t anything I’d buy without knowing the price first.
So here are my fees, and see below for a bit of background on why I set them like this.
Employed or self-employed
Help to Buy equity loan*
Right to buy
Meets standard criteria
Bad Credit, Non Standard & Complex
Poor credit score considered
Non standard construction
I do not normally charge a fee for mortgage advice, however this will be dependent on your circumstances. When I do charge a fee it is typically £245 but could be up to £795.
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Why do I try to be a fee free Mortgage Broker?
It’s important to me that professional advice is accessible. In a world where you can bring up a list of mortgage options in a few minutes, you’d be forgiven for thinking that the one at the top of the list is the best one. It’s probably not by the way, you need to consider all this.
By being fee free, most of the time, this removes an obstacle meaning I can give professional, regulated advice to people who might have arranged the wrong mortgage had they done it themselves.
There are some cases that take so much time in research I have to charge and I usually charge if you are using a scheme like the Help to Buy Equity loan . I always let you know about any fees before they are incurred.
How does a fee free Mortgage Broker get paid?
When a Mortgage Broker arranges a mortgage, they are paid by the lender, regardless of whether you are also being charged a broker fee. This amount is usually a set percentage of the mortgage amount. It’s often 0.035% of the total mortgage amount. Sometimes more, sometimes less. Most of the time this comes to enough for me not to need to charge a fee.
As I don’t have an expensive office to run, or pay estate agents or marketing companies to buy people’s details to get clients, I can keep my expenses very low.
How much do lenders pay Mortgage Brokers?
Typically, the lender will pay commission of about £3.50 for every thousand pounds borrowed. That’s £350 for every hundred thousand pounds you borrow. You’ll see exactly what fee the lender will pay your Mortgage Broker on your mortgage illustration.
The amount the lender pays is the same regardless of whether it’s being arranged by a fee free Mortgage Broker, or if you are paying a fee.
Does paying a Mortgage Broker fee affect what mortgages are available?
Am I a fee free Mortgage Broker for every single case?
Occasionally people come to me with very complex circumstances. They may have bad credit, complex incomes, or other circumstances meaning hardly any banks will consider them for a mortgage. A lot of the time these people have already been turned down by a lender, and sometimes another Mortgage Broker too.
These cases require a lot more research into the client’s circumstances, and a lot more research into which lenders are willing to consider them. This takes a lot more time and unfortunately the lender doesn’t pay any more commission for this work.
In order to still help these people I need to charge them a fee to make it worthwhile. I could choose to send these people elsewhere and advertise myself as a Mortgage Broker who’s completely fee free, but where’s the fun in that? Instead, I just charge when I have to.
I charge for Help to Buy, shared ownership, and Right to Buy as the mortgage you need is a lot smaller than if you were not using this scheme. This means that the lender will pay me less, even though these cases are often more work.
Examples of non-free cases
I approach every case expecting it to be fee free. Whether you’re employed or self-employed, so long as you have decent credit score, and you are buying a normal house, don’t expect to pay a fee. The exceptions tend to be:
- CIS sub-contractors
- Self employed with large changes in income
- Odd homes, like flat roofs
- Buying schemes
- Right to remain issues
- CCJs, arrears, low credit scores
The size of any broker fee would be proportional to the amount of additional work involved. Usually it’ll be £245 but could be up to £795. Most are at the bottom end of that range.
How to know for sure…
Just call me or WhatsApp me. We’ll talk about your situation, and I’ll be able to tell pretty quickly if you’ll need to pay or not.
Why Jamie Thompson Mortgages