96% of People Want Transparent Mortgage Broker Fees and Commissions Disclosure

Research by Boon Brokers of over 1,000 mortgage borrowers in England has found that:

• 96% of mortgage borrowers want clearer disclosure of mortgage broker fees and commissions paid by lenders to brokers called ‘procuration’ fees.
• 85% of mortgage borrowers do not believe a mortgage broker should charge both a mortgage broker fee and then also be paid a procuration/commission fee too.

Comment

This is a tough one.  There will be mortgage brokers that indirectly get paid too much if they charge a mortgage broker fee and then get paid a % of loan procuration/commission of say 1%.  This means that a mortgage broker could be charging say £1,000 to £1,500 as a broker fee and then get paid an addition £2,000 on a £200,000 loan or even £5,000 on a £500,000 loan.

This is disproportionate to the work involved but there are also the hidden costs that many consumers may not even realise:

Many borrowers are not that ‘clean’ about financial disclosure e.g., we have had clients who tell us they have a clear credit history only for when we complete a credit history search, we have found CCJs and arrears.

Many borrowers overstate their income or understate their debts and expenses.

These issues along with ‘undervalued’ properties can result in doubling up or trebling up of the works involved to secure a mortgage.

That said, many brokers will not use or consider lenders that deal directly with consumers and do not pay procuration fees.  We do not do this, but we are mindful of being overpaid or indeed underpaid if there is more work involved.  We charge two stage fees when arranging a mortgage

• Part 1 : Search (Upfront) from £726.00
• Part 2 : Application (Upfront) from £726.00
• This means we are not worried about whether lenders pay a procuration fee or not but if they do, we rebate 50% of this back to you to offset against any fees you have paid us or are due to pay us, so that you may get a refund on fees paid to us if we are paid a procuration fee.

See our Mortgage Fees:  Mortgage