The findings conducted by Mortgage Solutions, come after Mortgage Advice Bureau national sales director Gareth Herbert, said that many consumers were frustrated that brokers were failing to disclose a set fee for all clients.
A further 19% of intermediaries polled online said they did not charge a flat fee to customers, with many brokerages refraining from asking clients to pay for advice.
David Sharples, principal and owner of Search Mortgage Solutions, explained that his firm does not charge a fee from an ethical point of view as it receives payment from the lender or provider involved in the transaction.
“To me it’s black and white, you either charge a fee or you don’t. There’s a whole range of brokers who charge a whole range of fees, anything from £100 to £1,000 and we can do exactly the same job,” he said.
“We work on volume but this can bring its challenges. At the end of the day if the case falls through due to either the applicant backing out or because of a problem with the property, we won’t get paid for that despite having put the hours in.”
John Charcol’s product technical manager Simon Collins does not believe charging a flat fee to customers would be realistic.
“If we get someone with a nice simple case and we would be charging our minimum fee of £495. On the other hand if you get a customer that wants 85% loan-to-value up to five times income and has had some credit issues in the past, it’s not going to be an easy case. I want to charge a fee that is reflective of the level of the work that I’m going to have to do,” he said.
Collins explained that clients liked to know up front what they would be required to pay so they could budget for the borrowing process, and it was up to brokers to honour what they decide in the first instance.
“You can’t turn round to someone and say, ‘well it was a bit more of a nightmare than I envisaged so I want another £500’. You’ve got to play fair and it’s whatever you agree up front. By doing the enquiry and fact find, you’ll have got enough information that there shouldn’t be too many cases where you get surprised.”
