Whether you are a first-time buyer, moving home, or remortgaging you will most likely need to arrange a mortgage. You could spend numerous hours visiting many banks and building societies or alternatively you could get a mortgage broker to do the hard work for you. Interestingly some mortgage brokers choose to provide fee free mortgage advice to their customers.
Did you know that The biggest 10 UK mortgage brokers do not charge a broker fee. All mortgage brokers are paid a commission by the lender this is also known as a procuration fee and is typically 0.35 percent of the full loan size. Any additional fees charged by a mortgage broker are their choice to do so.
What are the advantages of using a mortgage broker?
So you are about to buy your first home or perhaps it’s time to remortgage. You may be asking yourself “How do I find the best mortgage rates?” or even “How do I compare which mortgage lenders will charge a fee?” The answers to these questions are simple. First of all, talk to a mortgage broker!
Getting the best mortgage deal
The way to ensure you get the best mortgage deal is to use a whole of market mortgage broker with amazing reviews. We say whole of market as many banks and other brokers have limited access to different mortgage lenders meaning you are very unlikely to have access to the best mortgage deals.
Comparing the whole mortgage market
A whole of market mortgage broker will compare the whole market to find out who is offering you the best rates and deals. With there being over 14,000 different mortgages available across all the different banks, building societies, and mortgage lenders it makes sense to use a mortgage broker.
Saving money with the best deal
You are likely to save a considerable amount of money each month on your mortgage by getting your best mortgage rate and mortgage deal. Saving money is a no-brainer so it makes sense and is highly worth getting a Mortgage advisor to shop around for you.
Mortgage broker fees
All brokers get paid by mortgage lenders for arranging a mortgage. Although this varies slightly from lender to lender the average paid is 0.35% of the mortgage loan. A mortgage broker will only get paid on completion of the mortgage.
What fees do mortgage brokers charge?
Some mortgage brokers charge their clients an additional fee called mortgage broker fees and this is often a flat fee ranging from £500- £1,000. Mortgage broker fees can also be charged as a percentage ranging from 0.5% to 1% of the mortgage loan.
In 2021 the average size UK mortgage was £193,000. Taking mortgage broker fees of 0.5% the average mortgage broker fee will be £965.
structured Costs of a mortgage broker
Mortgage Brokers that do charge a fee usually charge in one of the following ways.
- Hourly rate
Does it make sense to pay mortgage broker fees?
This is a great question that we will try and help you with. The reason you chose a mortgage broker in the first place is first to give you sound mortgage advice and second to find the best mortgage rate available to you based on the advice.
Many brokers charge a broker fee for their services. At YesCanDo Money, we strive to be a fee free broker. That is why we do NOT charge a fee on 9 out of 10 cases. We compare mortgages from the whole market to find you the best available rate and deal.
Are you likely to get better mortgage advice and better interest rates by using a mortgage broker that charges you a fee? The straightforward answer is no, however, in some more complex cases, brokers need to spend more time than average on a mortgage and therefor need to charge so they don’t make a loss. With the 10 largest UK mortgage brokers all being fee-free it hints that mortgage advisors do not need to charge you for their services when it makes sense not to.
How do I find a mortgage broker that does not charge a fee?
Like most things in life, often the best way is to get a recommendation. This could be as simple as asking your family, or friends or perhaps asking your friends on Facebook. Another great option is as simple as typing into Google “no fee mortgage brokers near me”. It is definitely worth spending time to get a no-fee mortgage broker as over the term of the mortgage it will save you thousands of pounds of unnecessary mortgage broker fees. We highly recommend looking at all mortgage broker’s reviews to see what others have experienced when using their services.
What are the other advantages of using a Mortgage broker?
Not only will a broker search the market to get you the best deal, but they will also do a lot more for you. They will carry out all the paperwork on your behalf and submit the mortgage application for you. Once the mortgage application has been submitted they will see it through to completion whilst updating and supporting you along the way. This will save you a lot of time and hassle giving you peace of mind.
If you are moving home the mortgage advisor will liaise with your solicitor, estate agent, and mortgage lender. A broker will take a lot of the stress out of moving home and look after every aspect of the mortgage application process.
Can I expect to pay other fees when getting a mortgage?
So we have established that not all charge Mortgage Brokers fees. The next question you may ask is ”what other mortgage costs and fees can I expect to pay?”. There are three main costs you may have to pay either on a property purchase mortgage or a remortgage. These include a valuation fee, solicitors fee, and a lender arrangement fee.
The valuation fee is paid directly to the mortgage lender. The lender will get an independent surveyor to carry out a valuation survey on the property you are buying or remortgaging. This is to make sure you are not paying too much money for the property and also that it is a property the lender is happy to provide a mortgage on. Lenders are very keen to lend money at the moment and therefore the no-fee independent mortgage broker you choose should be able to source a mortgage that is offering a free valuation as an incentive.
The next fee is applicable to remortgages only. This will be for solicitors also known as conveyancers to carry out the remortgage conveyancing when moving from one lender to another. The solicitor will find out (to the penny!), how much is outstanding with your existing lender and will correspond with your broker.
On receipt of a mortgage offer, your solicitor will be able to raise the new mortgage and arrange to pay off your old lender in full. If you are just finishing a fixed mortgage rate, then your solicitor will make sure that they ‘complete’ after the date the fixed rate finishes. It is important this is done correctly to avoid paying any early redemption fees. Make sure your mortgage advisors double-check this for you. Once again you will find that a lot of lenders will offer remortgage conveyancing free of charge as an incentive to get you as a new customer of theirs.
Mortgage Lender Arrangement Fee
The last fee that you may need to pay is a mortgage arrangement fee. The mortgage arrangement fee is paid to the lender and this usually gets you a better rate with the lender. A trustworthy mortgage broker will easily be able to advise you if it is beneficial to pay an arrangement fee to the lender in order to obtain a lower rate. Most lenders will give you the option to add this fee to your mortgage; this would mean that you will not have to find or pay this fee upfront. It is important that you understand that although this will help you with cash flow on obtaining the mortgage; adding an arrangement fee to the term of the mortgage could be very costly.
A mortgage adviser will be able to advise you if this is beneficial to you. The mortgage broker will also be able to get you comparative quotes from different lenders; some with lower rate arrangement fees and others with a higher interest rate with no arrangement fees.
Mortgage Advisor Fees
In some respects, a mortgage adviser and a mortgage broker can be the same thing and do the same job role. More than often, a mortgage advisor is an individual who is employed and works for a mortgage brokerage. People often ask how much does a mortgage advisor cost? alongside what are mortgage advisor fees. The bottom line is a mortgage advisor fee and mortgage broker fees are both the same things.
As has been well covered in this guide that there is absolutely no need or reason to pay either. The cost of a mortgage broker and the cost of a mortgage advisor are two of the most googled terms. The answer is you have absolutely no need to pay a fee for either!
Mortgage Broker Costs Summary
The initial question we asked was “Do mortgage brokers charge fees?” You now know that the answer is some do, but no all. We also covered a host of other fees that you could be charged that you need to be aware of.
The above points are all great reasons why you should use a local independent no-fee mortgage broker.
So our advice at YesCanDo is either give one of our experienced mortgage advisers a call as we are an independent NO FEE mortgage broker covering the whole UK.
YesCanDo is independent mortgage brokers that offer some our its services fee-free. Being fee-free mortgage brokers they will be able to guide you through your different possible options and support you through the whole mortgage process giving you sound financial advice. Alternatively, shop around for the most highly-rated mortgage broker near you.
For more information and local free mortgage advice please contact YesCanDo Money today at 033 0088 4407 or fill in our online form for a no-obligation callback.