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.
Prior to the credit crunch the profit to be made by being a secured loans broker was more than fair as the commission paid by loan providers to the broker for introducing business was perfectly reasonable..
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 .
It was a case of the lender and the broke depending on each other.
Many of these secured loan lenders are no longer in business, and frequently this is due to their inability to obtain funds.
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.
The underwriting of some of the secured loan lenders was so lax, and it was these practices in the banking industry in general that contributed to the credit crunch.
The secured loan industry was thriving until the start of the credit crunch has now become a shadow of its formal self, and the commission paid by the secured loan lenders to their intermediaries is also a shadow of its former sense.
Nowadays the commission paid to the brokers is only 1% of the total loan value meaning that for a 10,000 loan the secured loan broker would receive 100, which is not adequate to maintain an office, staff or anything else for that matter.
There are a number of processing costs to pay such as to pay the mortgage lender for answering a questionnaire regarding the conduct of the prospective secured loan borrowers mortgage account. A surveyor also has to be paid for carrying out a valuation on the property being offered as security,
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.
The incomes of mortgage brokers is now pretty much at the level that it always was with the mortgage broker receiving fees from the building society of about 0.030 of the value of the mortgage or remortgage.
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