Can You Make A Living When You Arrange Mortgages, Remortgages And Secured Loans?

Posted April 13, 2011 – 7:51 pm in: Mortgages
     

It is only natural for people to be very interested in other people’s wages.

When we are talking about mortgage and secured loan brokers we still wonder how much they earn. Individuals always wonder if there is any money to be gained by arranging a mortgage, remortgage and also homeowner loans.

In days gone by it was possible for finance brokers to earn fairly well, as they were paid good commission for introducing secured loans to their providers..

The secured loan sector was then very different from it is at present.. Then there were umpteen secured loan deals on offer from a number of secured loan lenders such as FNB, GE, Future Mortgages, EPF, PARAGON, etc. etc., and they all gave commission to secured loan brokers for giving them secured loan business .

The secured loan lenders and secured loan brokers had a mutual need of each other.

However since 2007 the number of secured loan lenders has gone down yo a handful with many of them going out of business..

One of the first of the secured loan lenders to withdraw was Future Mortgages part of a large American group who found it no longer feasible to continue to trade in the UK market due to heavy losses in the USA.

Others swiftly followed including First Plus who were virtually a household name and conducted a very high profile advertising campaigns in the press and television.

When we look at the secured loan industry at the end of 2009 we are looking at a product that is a very pale cousin of the secured loan industry of three years ago, and the earnings of the secured loan broker is similarly pale.

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.

The commission he receives does not even cover the costs of arranging the secured loan, and therefore the only way that a secured loan broker can make a living at present is by charging 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.

Want to find out more about remortgages then visit Champion Finance’s site and find the best remortgage for you.

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