Is There A Living To Be Made Arranging Mortgages, Remortgages And Secured Loans?
The majority of people are keen to know the earnings of other people, and this can be stated as virtually a fact of life.
The same is true when it comes to mortgage and remortgage and secured loan brokers. Some people looking for alternative employment consider if there is an adequate living to be made by being such a broker.
In the past it was possible for these brokers to make a good living, as they were paid good commission for introducing secured loans to the secured loan lenders.
There were a number of secured loan lenders who offered numerous secured loan plans for all people and all circumstances. These secured loan lenders were in stiff competition with each other and as such they relied heavily on brokers to introduce as much secured loan business to them as possible.
It was a case of mutual inter dependence between the lender and the broker.
Many of these secured loan lenders are no longer in business, and frequently this is due to their inability to obtain funds.
Future Mortgages was one of the first to shut its doors mainly due to the fact that it was part of an American group who suffered dramatic losses in America through its involvement in the sub prime mortgage market.
After Future met its demise many went to the wall as well including the Cardiff based First Plus who were the originators of the 125% equity plan.
The secured loan industry at the end of 2009 is a very different industry than it was pre credit crunch, underwriting has been tightened and so has the commission paid by the secured loan lenders to the secured loan brokers.
Commission which used to afford a decent standard of living has been cut to on average 1% of the value of the loan, meaning that the commission for a secured loan of 5000 would be the lordly sum of 50, and even for a secured loan of 30,000, the secured loan broker would receive 300.
Every time a secured loan broker arranges a secured loan he has stiff processing costs to pay. These costs are for such things valuations., Land Registry searches etc. This costs a minimum of 400 per secured loan, and more if the valuation is on an expensive property.
Therefore in order to make a living and not act like a non profit making charity the secured loan broker is now 100% forced to charge his clients fees.
Mortgage lenders pay the same now as before the recession to mortgage brokers who introduce business to them, and in general this is about a third of one percent of the remortgage or mortgage value. If it is a small mortgage or remortgage this again is not sufficient to make a living and normally the mortgage broker will obtain a small fee from the client. This fee is worth paying for his knowledge of the mortgage industry.
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