Would you be willing to pay a broker fee?

demoivre said:
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.
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Do you mean Authorised Advisors as defined by the Investment Intermediaries Act? If so, Authorised Advisor status doesn't cover mortgage intermediation.

If an Authorised Advisor also happens to be regulated as a Mortgage Intermediary, these are two entirely separate (although connected) businesses.
 
euromortgage said:
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?
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Ok then, if you had to charge a flat rate say on property worth between 100k-300k, what would you estimate that to be?

I would do the application filling, etc in my own time. I would check out a website such as this for the best offers with different banks which would save me time. The only reason I went with a broker was because they were recommended by a friend, there was no charge to me and they gave me a full list of offers (interest rates, repayment terms, etc) from 9 different banks where I was eligible and I was free to make a decision so I felt the advice was independent.

I don't see why the consumer should lose out just because banks don't want to pay brokers big commissions any more.
 
moondance said:
Ok then, if you had to charge a flat rate say on property worth between 100k-300k, what would you estimate that to be?

I would do the application filling, etc in my own time. I would check out a website such as this for the best offers with different banks which would save me time. The only reason I went with a broker was because they were recommended by a friend, there was no charge to me and they gave me a full list of offers (interest rates, repayment terms, etc) from 9 different banks where I was eligible and I was free to make a decision so I felt the advice was independent.

I don't see why the consumer should lose out just because banks don't want to pay brokers big commissions any more.
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I agree with you that the consumer shouldnt loose out but we can't state what our fees would be if the market goes like this until we've analyzed our operating costs. Some brokerages will have multiple offices and staff members, esb, telephone etc, to pay for, others will be small brokerages with maybe one employee. This is why I started this thread to work out whats best for the client and whats best for our company to maintain operating levels. I will say €100 would be in my opinion too little.
 
Is this all a bit academic? The customer ultimately pays the fee whatever way it is levied.
 
DerKaiser said:
Is this all a bit academic? The customer ultimately pays the fee whatever way it is levied.
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But - the lowest rates for under 80% LTV (excluding short term discounts) are currently offered by NIB .
NIB don't go through brokers - so that probably allows them a bit more scope for giving lower rates because they don't pay brokers 1% of every mortgage.
Maybe there are other reasons they have lower rates - but not using brokers must be a factor. So - cutting out the middlemen might result in savings for the customer?
 
Don't forget about Piba's announcement of own branded mortgages yesterday. Not finalised yet but could prove interesting for the markets
 
I'm surprised that no-one has yet mentioned that REA Mortgage Choice has been charging fees and refunding all lender commission for over 10 years. And has been voted mortgage broker of the year for the last three years.......

Sarah W

(formerly of REA Mortgage Choice)
 
Euromortgages,

Looking at the UK market, brokers charge a fee & only receive a small .3% commission. I would think this is where the market is going. With the current cost of funds running at 4.75% its hard to see how any of the Irish banks can afford to pay an additional 1% for the business.

If a broker is cross selling other products with the mortgage i.e. Life / Buildings / Pension. Is there a need to charge the customer?? Surely the margin on cross sales would be sufficient to maintain a profitable business?? Maybe this could be used as an incentive for the customer to purchase additional financial products??

Recent reports would suggest that brokers will shift business to lenders paying higher commission? If brokers do not change their business model, i would imagine their is a high risk of business been given to the bank paying the best commission, regardless of rate & the customers interests.
 
Euromortgages,

Looking at the UK market, brokers charge a fee & only receive a small .3% commission. I would think this is where the market is going. With the current cost of funds running at 4.75% its hard to see how any of the Irish banks can afford to pay an additional 1% for the business.

If a broker is cross selling other products with the mortgage i.e. Life / Buildings / Pension. Is there a need to charge the customer?? Surely the margin on cross sales would be sufficient to maintain a profitable business?? Maybe this could be used as an incentive for the customer to purchase additional financial products??

Recent reports would suggest that brokers will shift business to lenders paying higher commission? If brokers do not change their business model, i would imagine their is a high risk of business been given to the bank paying the best commission, regardless of rate & the customers interests.
 
As the Brokers earn a large fee when mortgages are arranged, did anyone ever hear of a Broker sending around a thank you fee for the business. No. It is their business.

I don't begrudge people making money but at the same time i know of many more needy and deserving charities.
 
I did not go through a Mortgage Broker last time I moved as I got my mortgage through NIB Loan to Value and they did not deal with brokers. However I was in the lucky position that I would have been given a mortgage by any of the lenders.

However, the first mortgage I went for was about seven years ago, when I went with a broker who fixed me up through EBS. My circumstances were totally different, I was struggling to obtain the amount needed for the loan and I have no doubt that I got that mortgage because of the good work the broker did for me at the time. He did not charge a Fee, but got the commission and I have no problem with that. If it were the case that I would have had to pay a fee of say, IR£200 going back seven years ago, I feel the work would have warranted that.

So overall, I think it depends on a. how financially astute you are
b. if you are bothered to research the market yourself and c. if you are cutting it fine to get a large mortgage, then I feel a broker well deserves his fee. If you need the service for any of the above reasons, I think its only fair to pay the fee.

I can well appreciate that brokers come up with the likes of people time wasting, see how much they can borrow, etc and by charging a fee will eliminate some of that messing.

However, because certain Banks do not pay the commission, I wonder will that mean that brokers do not recommend their products and the consumer misses out on a better rate?
 
I am just wondering if a climate has built up whereby many people feel it is necessary to go the broker route for a mortgage. The Banks who do not deal with Brokers have dedicated staff to help applicants and the various rate are published in the newspapers weekly. I think all this hype about trackers etc made people feel inadequate.
 
Banks are raising their interest rates and increasing the size of the deposit required. This is going to put a squeeze on borrowers as things stand.

On top of this, brokers may have to consider charging these same borrowers for their services ?
A typical mortgage of 270K might mean around a €1000 broker fee do you think?

Are solicitors next in line to raise their fees ? Something has to give eventually..

reg
 
My two cents.... If there was a small flat fee then possibly but by and large I would rather do the work myself.
 
magoko101 said:
My two cents.... If there was a small flat fee then possibly but by and large I would rather do the work myself.
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Totally agree,personally I would have no problem running through rates the different lenders were offering,approaching cheapest directly and getting appropriate P/w together,I do this anyway with brokers,it would just be removing the middleman,who up to now cost me nowt,
paying a percenatage to a broker?you have got to be kidding ,well not this poster anyway.
 
Sarah W said:
I'm surprised that no-one has yet mentioned that REA Mortgage Choice has been charging fees and refunding all lender commission for over 10 years. And has been voted mortgage broker of the year for the last three years.......

Sarah W

(formerly of REA Mortgage Choice)
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Welcome back Sarah, good to know you are keeping a watching brief :)

Perhaps the fact that your ever-helpful presence, advice and good humour is missing from this board would explain why fings ain't wot they used to be on AAM. :p

Surely Rea will be adversely affected also in that there will be less to refund to customers, therefore the cost of using them will be a lot higher for clients.

The Rea model is/was good, in that it was/is always transparent, and you got a full refund of any commission paid by providers to off-set the fee to Rea.
 
For a fee based brokerage I would look for the folliowing:

More value. I havne't used a broker, ever, because I find there is loads of free information out there and a half a dozen phone calls can get you access to what you want.

A complete overhaul of the fee structure. Brokers, in my mind, are too conflicted working on commissions. If I was to use a fee based broker, I would expect them to rebate to me any commission. I know that probably isn't feasable under current commission terms, mainly due to claw back provisions, but that is what I would want to see.
 
Being old (decrepit?) enough to have lived and worked in the mortgage business through the boom and bust of the housing market in the UK in the early 90's I think the broker market is going to suffer a similar blood-letting to the estate agency business. And it's not a bad thing.

The people with no talent, no acumen, no value to add to the house-buying process other than to jump on the bandwagon will disappear and will not be missed. The sound businesses that are trusted, ethical and with a loyal client base will adjust to the market conditions and survive but there's no doubt it will be tough.

(Anecdotally I recall being told in early 1991 - by a well known UK firm - that our wage cheques may or may not be honoured for the next couple of months but no-one thought to leave because they believed in the management to see it through. And they did.)

Back to the present - with lenders dithering about what they can and can't lend and at what rate from day to day - a good broker should be able to cut through the front desk bullsh*t that borrowers will be faced with and get the applicant a realistic offer an for that they should be paid an agreed professional fee.

Sarah W
 
I have experience of two mortgage brokers from the same company in the last 4 years. Both of them told me on different occasions that :

a) my best and only option was to go with AIB Financing. When I enquired about other lenders the second broker admitted that he had only sent my application to AIF "because they are the best". <I could have easily done that myself>
b) Both brokers pushed me to go with the max mortgage possible even though I had savings. <hmmm commission based>

So Im not too impressed with this company and if I was to buy another house today I would definitely not pay a mortgage broker for their service. I would struggle through the research and form filing myself to be happy that the banks with the best interest rates and most suited to my purchase at least receives my application.
Unfortunately where I see 'independent advice' I read 'brokers best interest'...
 
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