Would you be willing to pay a broker fee?

E

euromortgage

Registered User
Messages
37
With the announcement this week of banks slashing their commissions to brokers, I'd like to get peoples opinions on their willingness to pay brokers a fee to supplement their costs. Would you pay a broker fee for a standard mortgage?
 
A very good question. In case you get a resoundingly negative response, bear in mind that the folks on Askaboutmoney.com are generally more financially astute than Mr. & Mrs. Joe Public. The very fact that they're on AAM confirms this.

So while an Askaboutmoney regular might say "No - I'll do my own research and save myself the fee", there are plenty of people out there who wouldn't have the necessary knowledge to evaluate the differences between rates and rate types.
 
Thanks for the reply Liam. I agree with you that most on aam would be financially savvy but I think that they'll agree that people should be adequately paid for work that is done.
 
Yes i would pay for it, so long as i am informed upfront about it i would have no problem for paying someone for work they have done on my behalf.
 
As someone only mildly finacially savvy, but being a solicitor, recognise that people deserve to be adequately paid for work done...

If I were to consider paying for a a broker's services, I guess my big concern would be that they were 100% independent and only concerned with my needs rather than what commission they may get.

Can I presume then, that such a broker would charge a fixed fee, and any commission from a lending institution etc would be passed onto the client - or am i way off?
 
Most people are willing to pay fees, as long as they are warranted, transparent and worth it!
 
I'm sure most brokers would probably structure it differently as suits their circumstances but basically it would be that the broker would have to receive a certain percentage of the mortgage whether this is made up from commission from the banks or a form of both commission + client supplement. As always this should not effect the brokers service levels to act independent and ensure the client is getting the best advice possible .
 
In a situation where mortgage brokers start to charge the applicant for their services then my guess is that they will get some business from "difficult cases" but invariably will drive away other people who choose to save the fee by applying directly to the financial institution themselves.
I would have thought that most cash strapped FTBs will cut out costs whereever possible.
 
euromortgage said:
I'm sure most brokers would probably structure it differently as suits their circumstances but basically it would be that the broker would have to receive a certain percentage of the mortgage whether this is made up from commission from the banks or a form of both commission + client supplement. As always this should not effect the brokers service levels to act independent and ensure the client is getting the best advice possible .
Click to expand...


Why should the fee be percentage based ? That is the most ridiculous pricing structure ever invented. Why should a broker get paid more for doing a similar amount of work on a 200k mortgage as opposed to a 2 million one ?

Same goes for solicitors - basing conveyancing fees on house price is equally as ridiculous.
 
The fees to clients would probably be in around .3-.5% . I'm sure if brokers start charging fees it will put some people off but at the end of the day your paying for a service with your interest in mind i.e. whats best for you.
 
I'd be happy to pay a flat fee only. I would avoid any percentage based fee, no matter how good the service.
 
There will always be people that either can't understand what all the rates mean - or others who just can't be bothered to do the form filling and research themselves. These kind of people will probably pay whatever a broker asks for .
I think that charging commission based on the size of the mortgage is not right. There is probably the same amount of work involved for small and large mortgages - so a percentage fee is just not fair really.
When commissions from lenders vary - I would tend to be suspicious (maybe incorrectly) of a broker's recommendations. If I were to use a broker - a fixed fee and a refund to me of any commission would be my preferred option.
 
I just noticed that Ulster have announced they are pulling out of the broker market. So if the others follow suit the brokers might have to chnage the way they charge pretty soon.
 
nai said:
Why should the fee be percentage based ? That is the most ridiculous pricing structure ever invented. Why should a broker get paid more for doing a similar amount of work on a 200k mortgage as opposed to a 2 million one ?

Same goes for solicitors - basing conveyancing fees on house price is equally as ridiculous.
Click to expand...

NAI

Currently banks commission structures are percentage based. But what I should have said is the percentage structure would probably be linked to pricing bands, i.e. the percentage decreases the higher the mortgage amount but there has to be a minimum base level which covers the cost of doing business. Also your assuming there is the same amount of work involved in all mortgage cases. The more money your looking for, the more diligent the banks are (more risk to them) in their requests for information, which creates more work for the broker in getting the correct info from the client and preparing it for the bank
 
Currently banks commission structures are percentage based. But what I should have said is the percentage structure would probably be linked to pricing bands, i.e. the percentage decreases the higher the mortgage amount but there has to be a minimum base level which covers the cost of doing business. Also your assuming there is the same amount of work involved in all mortgage cases. The more money your looking for, the more diligent the banks are (more risk to them) in their requests for information, which creates more work for the broker in getting the correct info from the client and preparing it for the bank
Click to expand...

Much simpler and more transparent to just quote flat fees per pricing band surely?
 
euromortgage said:
With the announcement this week of banks slashing their commissions to brokers, I'd like to get peoples opinions on their willingness to pay brokers a fee to supplement their costs. Would you pay a broker fee for a standard mortgage?
Click to expand...

Do Authorised advisers, who offer mortgage services, charge a fee in addition to any commission they receive from the lender? I assumed that they did.
 
Yes, knowing what I know now I would pay for a broker. We got a mortgage though a broker in September and I found the service invaluable. There is not doubt in my mind that we would not be sitting in this house if it was up to me to figure it all out on my own. Unlike many users on this site, I am no financial genius and am rather unorganised financially. It was great having someone on my side when we were approaching the financial institutions.
 
As an FTB last year, I used a broker to check out mortgages for me. It was "free" and they ended up getting me a good rate (one that I could have got myself but it cut out all the individual applications to different banks to find it). I think if brokers have to charge, they should offer a flat rate charge of no more than 100euro. Well that's the max I'd pay for this service regardless of property value.
 
shanegl said:
Much simpler and more transparent to just quote flat fees per pricing band surely?
Click to expand...

Yeah your probably right, it is more transparent. I'm just putting out what if scenarios at the moment and looking at the different structures. I think in any kind of scenario similar to this there there will always be both structues, flat fees or percentage based. Take for example Estate Agents, there are some who will charge a flat fee and others a percentage. Again you could argue theres the same amount of work in selling a house worth €1m and a house worth €300k. If you look at the UK market, the brokers we deal with charge a percentage fee to clients.
 
moondance said:
As an FTB last year, I used a broker to check out mortgages for me. It was "free" and they ended up getting me a good rate (one that I could have got myself but it cut out all the individual applications to different banks to find it). I think if brokers have to charge, they should offer a flat rate charge of no more than 100euro. Well that's the max I'd pay for this service regardless of property value.
Click to expand...

Everybody is entitled to their opinion of what a service is worth. One question though, we're you aware of this rate in the market before you approached the broker? Also if you were to take the time off work to investigate the different bank rates and offers, fill in apps etc, would you have lost more than €100 in wages assuming you werent paid for holidays?
 
You must log in or register to reply here.
Back
Top