Brit home buyers wasting £370m a year on unnecessary mortgage broker ‘advice fees’

Brit home buyers wasting £370m a year on unnecessary mortgage broker ‘advice fees’

BRITS WASTING £370 MILLION A YEAR ON

UNNECESSARY MORTGAGE ADVICE FEES

 

  • Mortgage brokers are ‘double dipping’ on mortgage customers to the tune of a third of a BILLION pounds a year
  • Many consumers don’t realise that mortgage broker ‘advice fees’ are not inevitable and they could save an average of £400 each by shopping around
  • Brokers are paid a commission fee by lenders but most are slapping an extra charge on over 900,000 buyers a year – often the less experienced buyers who can least afford it

London, 18 September 2017 – UK home buyers are wasting £370 million a year on unnecessary ‘advice fees’ charged by the majority of mortgage brokers, independent broker One 77 Mortgages revealed today.

All brokers receive a ‘procuration fee’ from lenders for their work in arranging mortgages, satisfying FCA and money laundering rules as well as getting the business across the line.

But One 77’s experts hit out today at the “double dipping” rife in the mortgage industry that means an extra charge for ‘advice’ is levied on customers in approximately 75% of purchases.

That means an additional fee, averaging £400, was slapped on 926,220 of the 1,234,960 residential property transactions completed last year1, setting consumers back a total of £370,488,000.

Consumers – who can be charged as much as 1% of the loan balance for advice by brokers – don’t realise these charges are not essential and that in many cases a broker will negotiate these or back down on charging them altogether.

In many cases, brokers will not even raise them with their savvier or older clients, who are more likely to know that these fees are not set in stone. Instead some brokers will levy them on less experienced or younger first time buyers who know no different.

A minority of UK broker firms, including One 77 Mortgages, only take the procuration fee paid by the lender.

Alastair McKee, Managing Director, One 77 Mortgages, commented:

“It’s truly shocking that brokers are double dipping on fees in this way and stinging the consumer in the process. This is a colossal sum of money that’s being thrown away unnecessarily, in many cases by the people who can least afford it.

“As ever, it’s a case of buyer beware but, understandably, many less experienced buyers believe this is the norm across the board and that they have no choice but to pay. Many clients find it hard to believe that some brokers don’t charge broker fees.

“This is a costly misconception as that’s certainly not the case any more. If you shop around, there are a range of firms out there who don’t charge fees above and beyond what they receive from the lender and that’s exactly the way it should be.

“Being paid twice for doing the same work is simply unjustifiable.”

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