'Nil commission' mortgages

Are there any brokers in Ireland who will do a 'nil commission' mortgage for a fixed fee? The idea here is that instead of the broker getting the usual 1% of the mortgage, they do it for a fixed fee (presumably lower than the 1%!!) and either give you the 1% or the bank gives you equivalent value for the 1% in the interest rate they charge you.

It seems crazy to me that for a run-of-the-mill mortgage for say €500k, a mortgage broker will pocket €5k. And probably only a few hours work I'm guessing. For a €1m mortgage, they're getting €10k. I've no problem remunerating people fairly if the mortgage was awkward or they managed to negotiate a deal I otherwise couldn't have done directly, but if I'm looking for a standard mortgage then it seems barmy to me that I might have to fork out €5k to a broker for nothing. Going straight to a bank doesn't seem to improve the deal, so there must be some leeway to negotiate a split of the 1% between the broker and the buyer (i.e. me) !!

Ideas anyone?

Why not just shop around directly for the best deal and avoid the broker altogther? If you do insist on going the broker route then I believe that REA refund their commission. There are probably others too. If you do choose a broker then make sure that they deal with most if not all lenders otherwise you might not get the best deal.

AFAIK we are the only brokers to refund the commission on every mortgage we arrange (or use it to offset the legal fees). However do be aware, Rockahoola, that it is the lender paying the broker for avoiding the front end costs rather than NOT paying it to you.

Sarah

www.rea.ie

Rockahoola,

Who did you fork out 5k to?
I think that was a bit of a mistake. Could you try and get some of it back?

I've never had to fork out anything to a broker to arrange my mortgage.

Sarah W said:

AFAIK we are the only brokers to refund the commission on every mortgage we arrange www.rea.ie

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As far as I am aware, and as stated previously on AAM, I'm not sure that this is correct - a number of accounancy firms whom I am aware of, refund mortgage commission and charge arrangement fees to their clients instead.

Maybe somebody could name some of these firms that offer this sort of service?

I got my mortgage through Cork Mortgage Centre and I was never told of any fees I hope I wouldn't be getting a bill of €3k!!! Oh the stress!

deanwood said:

I got my mortgage through Cork Mortgage Centre and I was never told of any fees I hope I wouldn't be getting a bill of €3k!!! Oh the stress!

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Rockahoola was referring to the commission paid to the broker by the lender, not by the borrower.

Sarah

www.rea.ie

phew!!!
just had a mini heart attack!

Hi Sarah, that sounds exactly like what I need! What sort of fixed fee is typically involved (presumably less than the 1%!!).

Thanks.

To clarify confusion - when I said 'fork out €5k', I don't mean I paid anyone €5k. I mean that because the bank is willing to pay a middleman (broker) €5k for arranging business I'm effectively bringing to the bank, then there's €5k to play with there and I don't think I should get none of that (as I'm the one who is paying all the mortgage for the next 30 years!!). A much more rational and sensible deal is that I get the €5k from the bank (through the broker), and then agree with the broker what a fair deal is for the time and expertise the broker has brought to the deal. If I think the broker's time was worth €5k, then fair enough. But, in reality for a standard mortgage with no problems that's unlikely to be the case. So if I don't get any of the €5k, then I feel I am worse off by that amount as the person who actually is paying the broker the €5k at the end of the day is not the bank...it's me ...through the interest rates I'm paying on my mortgage to the bank.

Did you read REA's website about charges and home buying packages?

I did, but it's not clear. One example (a €170k mortgage) mentions a €1995 fee, which includes solicitors costs. But I'm not sure if that is a 'fixed' fee, or just relevant to that example.

Banks pay brokers commission (typically 1% of the loan amount) to cover the upfront costs of sourcing and administering the loan application to the underwriting/offer stage - this can be a very quick and simple process in some cases but in others can incur a lot of time in presenting an application to a number of lenders and negotiating conditions with the chosen lender. Some brokers will split commission on an ad hoc basis which (I think) is unfair to the clients not savvy enough to ask.

The REA package is very transparent and simple -

For mortgages below €250,000 we work on a fee basis with a full commission refund; for mortgages up to €200,000 the fee is €1995 + VAT, for mortgages between €200,001 and €250,000 the fee is €2495 + VAT. This includes the solicitors professional fee for the legal conveyancing of the property but does not include legal outlays or mortgage valuation.

For mortgages in excess of 250,001 there is a flat fee of €499 + VAT for the conveyancing irrespective of the loan amount although, if clients prefer, we can work on a fee and full commission refund.

Sarah

www.rea.ie

Thanks Sarah. If I get the conveyancing done separately, what would the fixed fee be on a mortgage of €900k?

I trust these answers are of interest to others, so mods I hope it's ok to keep this one going.