Brunel Mortgages & Loans has announced a new fee structure in response to the Mortgage Credit Directive (MCD).
The packager launched its new fee scale on 1 February after research in to what brokers want from a packager when they have customers who require a second charge or a specialist first charge mortgage.
Rob Derry, Brunel’s managing director, said: “Ever since MCD was first mentioned, we decided our business model would be to remain as a pure packager after conversations with brokers and lender partners. We have always been convinced that this is the best route for mortgage advisers to access second charge and specialist first charge mortgages under the new rules.
“The advice remains with the broker, who knows the client, and our experienced and knowledgeable staff give them all of the options for them to advise their client accordingly. We will then fully package the application to the relevant lender for a speedy completion.”
Brunel will charge a single ‘packaging fee’ on production of the binding offer from the lender for both first and second charge mortgages. The fees are based on the loan size.
Brunel will allow the customer to add the fees to the loan, if they positively elect to do so, for them to be paid on completion.
Derry said: “We’ve been authorised and regulated by the FCA (FSA) since M-day back in October 2004 and we know that they want to see a system of fair and transparent fees. We have decided to change our fee structure to reflect this and we believe that it fits in much better with the existing fee arrangements that brokers have for advising on first charges.
“Our single packaging fee means that the advisor knows exactly what a mortgage is going to cost when we package it for them and it dovetails in perfectly with the way the vast majority of advisers now charge for first mortgages. They will still be able to charge their own advice fee, as they currently do on first charge mortgages.
“It’s a win-win really. The broker has a consistent fee across all mortgages and the switch from a first to a second charge doesn’t result in a different charging mechanism for the client which is what could happen if the application is handed off to a second charge adviser.”