Is It Worth A Broker Arranging Mortgages, Remortgages And Secured Loans?

It is a natural instinct of mankind to wonder how much his fellow human being earns.

The same is the case when talking about remortgage, mortgage and secured loan brokers. It appears to some as a pleasant occupation, but some wonder if it financially worth pursuing.

Pre 2007, a secured loan, remortgage and mortgage broker had a decent standard of living, generally speaking, as the commission paid to them by the lenders was fairly good.

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.

Many of these secured loan lenders are no longer in business, and frequently this is due to their inability to obtain funds.

Future Mortgages ceased trading as did FNB, EPF, and many others . Hundreds of secured loan brokers have also met with an untimely demise.

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.

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.

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,

Therefore in order to make a living and not act like a non profit making charity the secured loan broker is now 100% forced to charge his clients 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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