I'm looking at buying my first house and was wondering how much is a reasonable/fair arrangement fee to pay a mortgage broker?
Do they all charge the same?
Mortgage brokers generate income in two ways.
(1) Commission - mortgage lenders pay brokers a fee ranging from 0.25% to 1% as a procuration fee. So for a typical mortgage of £200,000, brokers can earn £500 to £2,000 for helping someone secure a mortgage
(2) Arrangement fees - brokers may also charge you a fee directly. Based on my experience, you should pay no more than 1%. If they try to charge more, I would encourage you to get a second opinion. Also, I would make sure they don't charge you a fee until the mortgage is completed.
There are several guides on the site that you should read. Checkout www.simplyfinance.co.uk/mortgage/first-time-buyer.html | 11.04.10 @ 16:15