November 27th, 2009 
Loretta Swing 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.
The secured loan industry before the recession was very different from now. There used to be hundreds of different secured loan plans on offer from a number of prosperous secured loan lenders such as FNB, GE, Future Mortgages, EPF, PARAGON, etc. etc., and they all gave commission to secured loan brokers for placing their secured loan business with them.
It was a case of mutual inter dependence between the lender and the broker.
Now many of these secured loan lenders have ceased to be as they could not find funding
Future Mortgages ceased trading as did FNB, EPF, and many others . Hundreds of secured loan brokers have also met with an untimely demise.
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 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.
The commission has been reduced to such an extent that it is difficult to make a decent enough living. A secured loan broker in general now only receives commission of 1% of the secured loan value which goes no where towards covering costs let alone leaving a profit.
Processing costs for valuations, Land Registry searches have to be paid by the secured loan broker, and after all these are paid, and not even including other costs there is no profit left.
As the commission does not even pay for the costs of processing the secured loan application, the only way that a secured loan broker can produce a profit now is by charging the customer a fee for arranging the secured loan.
Now as before the sum that a mortgage lender pays a broker for introducing remortgage and mortgage business to them is approximately a third of one percent which again is not much, and therefore a remortgage broker has often to charge the mortgage or remortgage borrower a small fee for arranging the remortgage or mortgage. The small fee is certainly worth paying as normally the mortgage broker will call in person to see the customer and can arrange everything in the comfort of the clients home.
Learn more about remortgages Stop by Champion Finance’s site where you can find all the information you need about remortgages for your needs.
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