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Mortgage Advisor Fees

Mortgage Advisor Fees

With buying a house being such an expensive commitment, and biggest project most people do seek advice.
To seek advice can seem like a very intimidating process, but with the improvements the mortgage market has undergone; it has created many benefits for the borrower. From 2005 onwards the way financial advice is given has changed, to make it more transparent for borrowers.
With different type of advisors come different fees. An advisor who works at a bank is a tied advisor, as it can only sell the products which are available by the financial company it is working for. In the independent mortgage advisors there are two types. One who is IMA – Independent Mortgage Advisor, which is able to offer all mortgage products on the market, but can only offer mortgage product and nothing else. The other is known as IFA – Independent Financial Advisor, and can offer whole of market advice, which would include anything related to buying property.
Mortgage advisor fees depend on the above type of advisors and on two different ways to pay. The first is paying by fee, which is a fee which charged for the advice depending on hourly rate. The fee is charged regardless of closing the deal or not. The second is by paying by commission and this is when and indirect payment is made indirectly, through the provider of the product. This will only be paid on completion of a sold product. Also some advisors merge both with paying a fee and also receiving commission.
Other fees associated with a mortgage:

  • Stamp Duty – This is a tax paid on any property above the price of £125,000. The rates are as followed: £125,000 – 250,000 is 1%; £250,000 - £500,000 is 3%, £500,001 and above is %4, £100,000 + is 5%. With the exception of a First Time Buyer of no stamp duty is the property is under £250,000.
  • Arrangement Fees – Is a one of fees paid to the lender. At times to hedge against the low interest rate the arrangement fee is higher, which can be an advantage if the mortgage value is large.
  • Survey Fees – This is a fee so the lender knows the exact value of the property it’s giving a loan against. It can cost from £100 - £200, and at times is paid for by the lender.
  • Exit Fees – This used to be a fee, but has now been removed by the FSA

Mortgage advisors can charge a fee which generally from 2% - 1% and this is then the only fee it will charge. This is because the property loan industry has started to become very competitive and this fee show transparency and also to be worked out before onto what would be charged. With the market being so competitive some charge 0% fees to the borrower, and instead make their incentive from the lender.
Our mortgage advisors are completely transparent with the whole mortgage process and this defiantly includes all fees, so please go ahead and fill in the form below and an advisor will be in contact shortly.