mortgage broker not charging a fee - how does that work??

[bally2011]

hi there, i am new to this forum so hope i am posting this in the right place. Basically I am hoping to buy a new house with my husband before the end of the year. we are currently renting and with a baby on the way, we are dying to get our own place and hope to qualify for the tax relief before if disappears on 31/12/2011.
We were recommended a broker who doesn't charge a fee but i am cynical. how does this work?? My friend used him and was happy but is there something I should be looking out for

 

[callybags]

Mortgage brokers get paid a commission by the lending institutions.

I used one a few years ago. They are obliged to be up-front with the amount of commission they receive.

In my case as far as I recall it was 1% of the loan value.

Be sure that your broker deals with all the lenders, otherwise you are restricting your choices.

 

[NorfBank]

My friend used him and was happy but is there something I should be looking out for

Lenders/banks pay commission to the broker for introducing the business. Different banks pays different levels of commission e.g

KBC 1% of the mortgage amount
AIB 0.5% of the mortgage amount.

So the broker will get paid more for putting the business with KBC than for putting it with AIB.


Brokers, in general work in three ways:

• No fee but keep commission
• Charge a fee and keep the commission
• Charge a fee but return commission

You need to decide which of the above you prefer and seek out a broker offering that service.

 

[PaddyBloggit]

Why the need for a broker?

Can you not do your own leg work and approach the banks yourself?

They have mortgage advisors in situ who will detail requirements etc.