Before you appoint a mortgage broker to help you, check how much, if anything, you’ll have to pay them for their advice.
Almost all mortgage brokers get paid a commission from the lender they recommend to you, the details of which have to be clearly detailed to you with any recommendation they provide as part of a Key Facts Document. Perhaps counter-intuitively, these charges do not usually increase the ‘cost’ of the mortgage deal you are offered.
Some brokers charge an additional fee for their advice and this can be charged in one of several different ways. For example, they may charge you a fixed fee of £495, or they might charge you by the hour. Alternatively, they might charge you a percentage of the amount you are borrowing. For example, if they charge 1% of your mortgage amount, and you want to borrow £150,000, you would have to pay them £1,500.
An increasing number of mortgage brokers offer a fee-free service however, which means you don’t have to pay them a penny for their advice. Instead, they rely purely on the commission they receive from the lender whose mortgage they’ve recommended to you. It’s important to stress that almost all mortgage brokers receive these commissions – some just choose to charge a fee on top.