The Importance Of Understanding How Mortgage Brokers Get Paid
10 Dec 2016 in General
You might wonder how mortgage brokers get paid. Some of them collect upfront fees if you seek their services while others don’t. Most of the time, they won’t ask anything from you. This makes you wonder how they are being paid and if their pay is commensurate to the type of service they have rendered. The truth is that there are different types of brokers. There are those who are not connected to certain companies. They are independent brokers. It means that they don’t recommend with bias. They will always look for what is best for you.
They are the ones who usually get an upfront fee from you. The amount is not that high, but it is not for free. If they are able to close the deal, they also get a percentage from the value of the property that was sold. If you can afford to pay for the fee and you want a more independent opinion, then it is best if you go for these brokers.
On the other hand, there are tied brokers who don’t collect upfront fees. Since they are tied to a certain company, they will do their best to convince you to partner with their company. This usually results in a less independent opinion, but you have nothing to pay in the first place. They will also receive a higher commission if they are able to lock the deal down. It could go as high as 2% of the property’s value. You might say it is pretty low. However, you have to understand that properties are valued in hundreds of thousands of pounds. Therefore, even just a single deal closed could lead to really high commission fees.
Brokers usually earn 60,000-80,000 pounds per year depending on the deals they have sealed. It could go a lot higher or they could also take nothing home.
The reason why you need to understand this is that you must realise that brokers really earn a lot in the end. You need to choose someone who is not driven by money, but by looking after your best interest. You did not get a broker because you want him to get rich. You have hired someone because you want to buy the best property out there.
Take time to search for the best brokers and once you have found the perfect partner, you can close the deal. If you are in search of a mortgage broker Colchester offers, you are in luck. There are a lot of them in the area and most of them have years of experiences in the bag. They are also well-connected. Partnering with them will be very easy for you.