I’d like to start by saying how much I enjoy reading Mortgage Strategy, particularly the letters pages. I’ve often thought about making a comment on something but unfortunately, as with most readers, the moment passes. But the time has come to speak my mind. I’ll try to keep my comments brief but I’m afraid I’m in rant mode – in fact, my normally coiffured hair is standing on end.
Your cover story on arrangement fees in the June 11 issue included numerous quotes from some top lenders including one that said “higher arrangement fees bear no relation to proc fees because the return on a deal is fairly comparable whether the broker sells a high, low or no fee product”.
I then turned to page 64 to see an article by Paul Lewis who, in his penultimate paragraph, makes an unbelievably sweeping statement.
“In many cases, the commission that providers pay to brokers is taken from customers directly as part of arrangement fees,” he states. “So mortgage broking has become an additional cost when buying homes.”
Does Lewis think that when a consumer goes to a high street lender and speaks to its adviser there is no cost involved? Of course there is, but it’s hidden. The interest rate offered reflects the costs the lender has to bear in staff and utilities.
The rate and arrangement fee is no different whether advised by a broker or a lender’s staff. Indeed, the cost to lenders is lower for introduced applications – that’s why we’re so popular with lenders.
Did you note I said the cost is lower? The difference is that I guide my clients through the house buying process. My partner and I pride ourselves that our clients only need to make one phone call. We talk to estate agents, lenders and solicitors on their behalf and believe it or not, this is the case with the majority of professional mortgage advisers. We’re not brokers – we offer advice.
At every stage in the process, we are there. We even check completion statements from solicitors prior to completion. It sounds silly I know, but even solicitors can get figures wrong. We want to keep our clients. We encourage them to contact us with any queries, be they problems with payments or raising extra capital, and we don’t ask for payment for this advice – it’s how we choose to run our business. Initially, we might only receive a small proc fee but this bears no relation to the service we offer. Everyone receives the same level of service.
Because of this we get referrals, although I know this must sound strange to Lewis. The buying process can be daunting for some people who may never have spoken to a solicitor or estate agent before, and we like to think we make the process easier.
Perhaps Lewis could write for a tabloid instead of getting extensive coverage in our trade press, then he could tar all brokers with the same brush – as commission-grabbing salesmen.
Professional mortgage adviser
Bridgemarsh Home Finance