Mortgage brokers act as the junction between those who want a mortgage and those who supply them. Traditionally, banks and other financial institutions have sold their own financial products.
However, as the marketplace for mortgages has become more competitive, the role of brokers has become more popular and they are now the first port of call for many would-be borrowers. Their job is to source the right mortgage policy for their clients, after taking into account factors such as their financial stability and their credit history.
Independent brokers have found the most favour with consumers as they are not loyal to any particular lender, and their industry knowledge can help them source mortgages that would otherwise be unavailable to the public.
Because of the competition in this field, consumers are now in a position to shop around and find the brokers with the lowest fees. There are brokers who charge a fee, whether they secure a mortgage or not and there are those who only charge if they manage to find their clients a suitable deal. The fees involved vary from broker to broker. However, there are also brokers who do not charge their clients at all.
Instead, they arrange a fee with the lender who offers the deal most agreeable to the clients. In this way, brokers can benefit from not charging prospective borrowers any fees for their services. While this system can ally some brokers to certain lenders, independent brokers can still use their impartiality to find their clients the best deal and get paid in the process, without charging their clients at all. So the simple answer is no, you don’t have to pay a broker’s fee, but shop around before making the final decision as to which broker to choose.