ej_topmost
Property Hawk
How much does a BTL mortgage broker charge?

How much does a mortgage broker cost?
One of the major downsides of using a buy-to-let mortgage broker is that invariably their services are not free.  Most mortgage brokers charge a fee.  This is to cover the time taken for advising you the landlord as their client and also the costs of administering the buy-to-let mortgage application.  This fee will vary from  mortgage broker to mortgage broker and also depends on whether a landlord is taking out more than one buy-to-let mortgage and the size of that mortgage.  Typically a fee would be anything from £150 to £500. 

BTL mortgage brokers can afford to be flexible with their fees because they often receive what is called a procuration fee from buy-to-let mortgage lenders.  This is effectively commission from the mortgage lender for selling one of their BTL mortgage products.  It is well within a landlord’s rights to find out how much this procuration fee is, because a buy-to-let mortgage broker will normally receive a procuration fee, it means that they can often be flexible about how much brokerage fee they charge a landlord. 

This is something that it is useful for landlords to be aware of, especially if a landlord may be buying or remortgaging several residential investment properties at one time.  In this case a landlord should look to negotiate with a buy-to-let mortgage broker to pay a reduced fee or in the case of a portfolio of buy-to-let properties for them to waive their fees altogether.

Is it possible to find a FREE mortgage broker?

It is possible for landlords to find mortgage brokers that provide a fee free buy-to-let mortgage broking service.

Some mortgage brokers will not only NOT charge a mortgage brokers fee, but they also share some of the commission or procuration fee as it is called in the industry for selling a buy-to-let mortgage product with a landlord. This means that a landlord will actually get some cash back from buying a buy-to-let mortgage. For example {{ LINK MortgageEnquiry.aspx MoneyBack mortgages. }}

One thing to be aware of when using mortgage brokers that don’t charge a brokers fee is that they have to earn their money somehow.  This means that these buy-to-let mortgage brokers are more likely to recommend a mortgage product to a landlord that pays a larger procuration fee.  This might not always be the best BTL mortgage product for a landlord.

Landlords no longer in the ‘driving seat’

The other downside of using a buy-to-let mortgage broker is that a landlord is taken out of the ‘driving seat’ in respect of pushing their BTL mortgage application forward. 

{{ LINK MortgageAdvice.aspx?Id=162 A good BTL mortgage broker }} will do all the chasing for a landlord, ensuring that the lender processes the mortgage application quickly and efficiently.  A bad one won’t and a landlord can find that the BTL mortgage broker becomes the ‘piggy in the middle’.  The landlord not being unable to speak directly to the mortgage lender whilst the mortgage broker appears incapable of stirring the BTL mortgage lender into action.

Do you want to {{ LINK MortgageSearch.aspx search independently}} or go direct to a  {{ LINK MortgageProviders.aspx buy-to-let mortgage provider}} instead.


Financial Services Authority (FSA)

What is perhaps most shocking to landlords is that most Buy-to-Let mortgages are not regulated by the Financial Services Authority (FSA). Most of us have heard of the Financial Services Authority (FSA).  It was established by the Government to protect the interests of consumers and it now regulates a whole host of financial products from pensions to residential mortgages. 

However, at the present time, buy-to-let mortgages are not regulated by the Financial Services Authority (FSA).  This is because they are classed as a commercial product.  The assumption is that people operating in this sector are ‘commercially aware’ and do not need the same level of protection.  This means that someone without qualifications or experience could set themselves up as an adviser and if they do not give you the landlord correct advice you will have no comeback with the Financial Ombudsmen Compensation Scheme

Many brokers are registered with the FSA because they sell other products that require registration.  Therefore, Property Hawk would always advise landlords to check with a mortgage broker first that they are regulated.  Whilst this in it self will not protect a landlord when buying buy-to-let mortgages it does indicate that the broking company is probably not a ‘bunch of cowboys’ & that they are likely to be a responsible organisation.

There is a trade body called the National Association of Commercial Finance Brokers NACFB which some mortgage brokers belong to.  Membership is voluntary and it sets out guidelines for its members to operate within.  However, they have no direct powers to act in the consumer’s interest against anybody that breaks this code.

Comments (0)

Name
E-mail (Will not appear online)
Subject
Comment
To prevent automated Bots form spamming, please enter the text you see in the image below in the appropriate input box. Your comment will only be submitted if the strings match. Please ensure that your browser supports and accepts cookies, or your comment cannot be verified correctly.
»
This comment form is powered by GentleSource Comment Script. It can be included in PHP or HTML files and allows visitors to leave comments on the website.
Most popular landlord information and FAQs

 

What rental yield should a landlord try to achieve?
Accelerated possession - Section 21 Notice
Non payment of rent
The Tenancy Deposit Scheme (TDS)
How to prepare a property inventory
Grounds for possession of a rental property
Fair wear and tear on a rental property?
Filling out a N5B form for possession
Landlord insurance advice
Letting to students
How do I choose the best tenant?
Should I use a letting agent?
Commercial Mortgages

Whole market search.
Instant personalised quote.
Rates updated in real time.

Find the most suitable mortgage for your individual requirements using our advanced buy-to-let mortgage finder.

Search

FORMS FOR LETTING PROPERTY

FREE TENANCY AGREEMENT (AST)
FREE SECTION 213 NOTICE
FREE PROPERTY INVENTORY
FREE SECTION 21 NOTICE
FREE SECTION 8 NOTICE
FREE TENANCY GUARANTOR FORMS
SERVING NOTICE

FINANCE AND TAX ON RENTAL PROPERTY

INCOME TAX
CAPITAL GAINS TAX
LANDLORD INSURANCE
PROPERTY INVESTMENTS
OTHER BTL FINANCE
BTL FINANCE - THINGS TO KNOW
BUY TO LET MORTGAGES
BTL MORTGAGE BROKERS
SELLING A BTL PROPERTY

RENTAL PROPERTY REGULATIONS

GENERAL SAFETY
GAS SAFETY
ELECTRICAL SAFETY
FURNITURE AND FURNISHINGS
FIRE SAFETY
TV LICENCES
HMO (HOUSE IN MULTIPLE OCCUPATION)
TENANCY DEPOSIT SCHEME (TDS)
ENERGY PERFORMANCE CERTIFICATES
COMMUNAL HEATING REGULATIONS

INVESTING IN BTL PROPERTY

A GUIDE FOR NEW LANDLORDS
WHICH PERIOD OF PROPERTY
CALCULATING RETURNS
RENTAL YIELDS
FINDING PROPERTY
SELECTION STRATEGY
INVESTMENT CHECKLIST
PROPERTY AUCTIONS
BMV PROPERTY
BUYING OFF PLAN
BUYING APARTMENTS
BUYING HOUSES
BUYING HMO'S
ALTERNATIVE INVESTMENT
KNOWING THE RISKS
PROPERTY INVESTMENT CLUBS
RENTAL TYPES

MANAGING RENTAL PROPERTY

GIVING NOTICE TO LEAVE
NON - PAYMENT OF RENT
TENANT ABANDONMENT
GETTING YOUR MONEY BACK
THE TENANT WONT MOVE OUT
THE TENANT DOES A BUNK
SQUATTERS
RAISING THE RENT
REDUCING THE RENT
REPAYING THE TENANCY DEPOSIT
FAIR WEAR AND TEAR
MOULD AND CONDENSATION
MAINTENANCE OF A RENTAL PROPERTY
APPLIANCES
LANDLORD ASSOCIATIONS

 

LETTING RENTAL PROPERTY

TEN STEPS TO LETTING
PROPERTY MARKETING
WRITING A LETTING ADVERT
FURNISHING A PROPERTY
LETTING AGENT OR DIY
SELECTING A LETTING AGENT
VETTING TENANTS
TENANTS ON BENEFITS
LETTING TO STUDENTS
PREPARING AN INVENTORY
PROPERTY HANDOVER
RENTAL DEPOSIT
TERMS OF A TENANCY
LENGTH OF A TENANCY
RESPONSIBILITY FOR REPAIR AND MAINTENANCE
TENANCIES IN SCOTLAND
ALTERNATIVE TENANCIES
LETTING TO TENANTS WITH PETS

 

LEGISLATION OF LETTING PROPERTY

INTRODUCTION
TENANCY DEPOSIT DISPUTES
ARBITRATION
ALTERNATIVE DISPUTE RESOLUTION
TRIBUNALS
HOUSING ACT APPEAL DISPUTES
THE LANDS TRIBUNAL
RIGHTS OF LIGHT APPLICATION
APPEALS FROM LEASEHOLD VALUATION TRIBUNALS (LVT's)
POSSESSION PROCEEDINGS
POSSESSION - SECTION 8 NOTICE
POSSESSION - SECTION 21 NOTICE
SECTION 21 TIMETABLE AND PROCESS
N5B POSSESSION
POSSESSION ORDERS
GROUNDS FOR POSSESSION
PREPARING FOR A POSSESSION HEARING
LEASEHOLD DISPUTES
HARASSMENT BY LANDLORDS
RENT DISPUTES BETWEEN LANDLORD & TENANT
FAIR RENT (RAC)
MARKET RENT UNDER AST
LEASEHOLD VALUATION TRIBUNALS
MODIFICATION OF RESTRICTIVE COVENANTS