Can A bBroker/b Make Money By Arranging Mortgages, Remortgages And b.../b
Most people are anxious to find out what other people earn and this fact is common to most..
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..
There were over twenty secured loan lenders granting numerous secured loan plans for almost every homeowner and for almost any circumstance. These lenders were in stiff competition with each other and as such they relied heavily on brokers to provide them with as many secured loans as they could.
The secured loan lenders and secured loan brokers had a mutual need of each other.
Many of these secured loan lenders are no longer in business, and frequently this is due to their inability to obtain funds.
Future Mortgages was one of the first to shut its doors mainly due to the fact that it was part of an American group who suffered dramatic losses in America through its involvement in the sub prime mortgage market.
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.
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.
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