leonkings07
Registered User
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- 15
This always has to be borne in mind when using a mortgage broker. The money the bank pays the broker in commission doesnt materialise out of nowhere - the cost is passed onto someone and I bet it isnt the bank.
Use a high profile broker - they will get you the best deal and save you a huge amount of meney.
The cost of taking out any loan is always going to be paid by the person getting the loan. May be dressed up or hidden in various ways, but in the end of the day its paid by the customer.
This always has to be borne in mind when using a mortgage broker. The money the bank pays the broker in commission doesnt materialise out of nowhere - the cost is passed onto someone and I bet it isnt the bank.
But the important thing is that if you don't go through a broker and deal with the lender directly, they simply keep that commission for themselves.
(I am a broker.)
Of course the customer ultimately pays for the commission that a lender pays the broker. It's factored into the interest rate that the lender charges. But the important thing is that if you don't go through a broker and deal with the lender directly, they simply keep that commission for themselves.
As has been said earlier - some brokers do get paid the same rate of commission regardless of which lender they place your business with. Others get paid different amounts by different lenders. One of the most useful questions to ask any mortgage broker is how the recommended product compares with the competition for your particular need.
(I am a broker.)
What difference does that make to the person taking out the mortgage?
The role of a broker (and you should really know this yourself if you are a broker) is to absorb the front end costs - marketing, interviewing the client, collecting the paperwork, packaging the application and presenting it to the underwriter.
Thanks for taking the time to contribute Sarah-I was dubious of some of what was claimed in this thread.
Can you clarify one thing for me (you have pretty much said it above)-unlike, say, insurance, there is no hard financial incentive (i.e. to get better rates) for a customer to use a broker as opposed to going to a lender directly?
Of course the customer ultimately pays for the commission that a lender pays the broker. It's factored into the interest rate that the lender charges. But the important thing is that if you don't go through a broker and deal with the lender directly, they simply keep that commission for themselves.
Whats to stop someone using a broker to get the best deal and then approaching that particular bank directly?
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