Whether you need to apply for a mortgage, get a secured loan, or finance your new business; there is no getting away from the fact that you may end up paying at least some fees to brokers. In the hope of shedding some light on the situation and setting the record straight, there is a wealth of information in this post that should let readers know about the ins and outs of the process. We’ll discuss brokers and what they do before letting you know the finer details about their broker fees, so you know what to expect.
Why do you pay fees to brokers?
Brokers are professionals who help clients to understand the mortgage, loan, or finance process and assist them in getting the best possible deal. Brokers help to remove the hard work from the task, and they take the stress off the shoulders of the individual or business by calculating when finance you need and the costs involved. Professionals working in that role can often help people and companies to save thousands, even after they pay the fees. That is because brokers will sort the wheat from the chaff and provide information about providers with the lowest interest rates and the best terms. Without a broker, it is almost guaranteed you will not find the best available arrangement out there.
Mortgage broker fees
One of the most common reasons people employ brokers relates to finding the best mortgage deal. On average, most potential homeowners end up paying around £500 to their broker. Some firms charge their clients broker fees in different ways including:
- Fixed fees
- Hourly rates
- Percentage of the total
- A combination
Secured loan broker fees
The second most common reason people employ brokers relates to obtaining secured loans that use their home as collateral. Different companies will charge varying fees. However, people in that position usually end up handing over between £1500 and £3000 depending on the size of the loan and other details. Secured Loan Brokers charge those fees are around 10% of the loan amount and this is typical across most brokers in this market place.
Business finance broker fees
When it comes to obtaining startup capital or funding a new business project off the ground, many entrepreneurs have to apply for finance. Again, brokers will scour the market to ensure their clients get the best deals with the lowest possible interest rates. The professionals tend to charge fixed fees, percentages, or commission. While business owners do not have to use brokers for that process, they will help to save a lot of time and money.