Go with mortgage broker (and pay fee) or try more banks

R

redleprechaun

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Hello,

We (I & wife) have a house but want to move. We have applied with our existing bank; but to see more options we also decided to try a broker.

The broker came back with some preliminary evaluations for a couple of banks (which look good) - and is now asking for a 300 Euro fee. The fee was not advertised on the broker's website. In fairness the broker does promise to refund it if we don't get approval for a reasonable amount. Still this is a bit unexpected.

Should we pay that fee, or should we instead try applying directly to these same banks? Or should we take a third option and try another broker, who specifically advertises "no customer fee" on the website?

EDIT: this was just me getting surprised - first time I dealt with brokers. I'll pay the fee.
 
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What options are you looking at?

The only reason you would need a broker is if you are having some difficulty getting a mortgage or if you have a Loan to Value below 60% and qualify for an Avant Mortgage, who deal only through brokers.

But you probably should have thought of that before engaging with a broker. If he has done work for you and given you advice, a fee of €300 seems reasonable.

Brendan
 
Yes you should pay the fee.
You need too ask any broker there fees befour you Start with them
So you know where you stand
 
Understood, thanks. I was not aware of how things work, got surprised, so wanted to check the proper line of action. Now I will pay the fee.
 
Nothing is ever “free” either you’re paying the broker for independent advice and expertise or the bank is paying them a commission on whatever product they sell you.
There is people out there that will charge you for advice and if you find one of the good ones they will be worth every cent you give them.

“If you’re not paying for it you are the product”
 
TheBig40 said:
Nothing is ever “free” either you’re paying the broker for independent advice and expertise or the bank is paying them a commission on whatever product they sell you.
There is people out there that will charge you for advice and if you find one of the good ones they will be worth every cent you give them.

“If you’re not paying for it you are the product”
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ALL lenders that use broker channels pay commission.
So in addition to the 1% that the broker is getting from the lender, they are also getting 300 from the borrower. I've no issue with that if there is value being added to the customer.
 
My real problem was not the fee itself but the fact that it was not advertised upfront. I was surprised, felt the need to "do due diligence" (as in, ask before blundering ahead), went to this forum. From this discussion, I get the feeling that this is common business practice and that I should have known about it.
 
Normally the fee is refundable if you drawdown, which kind of makes more sense.

I think I paid our guy €450 up front which I then got back when he got his 1% from the bank.
 
Gordon Gekko said:
Normally the fee is refundable if you drawdown, which kind of makes more sense.
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That's what I had always thought was 'normal', but I've seen a few posters now saying that it's not refunded, or only if other products are arranged through the broker (mortgage protection, etc).
 
RedOnion said:
That's what I had always thought was 'normal', but I've seen a few posters now saying that it's not refunded, or only if other products are arranged through the broker (mortgage protection, etc).
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I wouldn’t tolerate that.

I thought my arrangement was very fair.

But paying a fee and then the broker gets 1% of a big number?

No way. That’s a joke.
 
redleprechaun said:
My real problem was not the fee itself but the fact that it was not advertised upfront. I was surprised, felt the need to "do due diligence" (as in, ask before blundering ahead), went to this forum. From this discussion, I get the feeling that this is common business practice and that I should have known about it.
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I think it’s more common to not know and it’s great to ask the question. I think every time I’ve asked something on here I’ve done it to try and learn something and usually do :), that said I’d suggest it would have been up to the broker to make it clear that there was fees involved
 
This guy never mentioned a refund on drawdown. He did agree, however, to refund if I don't get a reasonable amount. I think I need to get this confirmed in email before I go and pay.
 
redleprechaun said:
This guy never mentioned a refund on drawdown. He did agree, however, to refund if I don't get a reasonable amount. I think I need to get this confirmed in email before I go and pay.
Click to expand...

To me, that seems odd. In my view, he should get paid if you don’t get approved for a reasonable amount. But I think you should absolutely be refunded the money if you successfully drawdown the mortgage and he gets paid.
 
I just don't want to be promised the moon, while I don't mind losing 300 quid for a successful application (it will be peanuts compared to the moving budget).
 
Personally I'd be concerned about the transparency around this. The broker should have absolutely notified you of fees up front. I don't think it was a poor assumption to think that their fee is covered by the 1% commission on draw down of the mortgage. Brokers have different structures and of course many will charge a fee (I've heard of 450+VAT previously) but others do not use this model and continue to be "no-fee" and obtain the fee upon drawdown.
I think it was a bit off that the broker didn't tell you of the fees upfront and I'd be bit concerned about the level of trust you could actually have with him following on from this.
 
While you say the fee isn't on the website was it in any letter/brochure you were sent? It would be very odd to expect someone to pay for a service where they were not advised of any cost beforehand, although mind you I would have asked!
 
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