95% deals disappearing

minimike2

ROFL.

So very true.

andrewmp

minimike2 wrote: »

ROFL at the broker bashing. Get sick and tired of this sometimes.

There ARE bad brokers out there (although most "bad eggs" will not survive these turbulant times) - but most of us are up-front, honest and genuine.

I'm not saying you, or any broker for that matter isn't genuine. I'm just saying that they don't always get your the best deal. There isn't a single broker out there with access to the whole of the market is there? Makes the name "whole of marke broker" a bit silly.

If I had listened to my broker (who is honest enough) I'd be a lot worse off.

minimike2

Thats not correct - its just that its not viable.

Let me explain.

Broker A. Charges a £500 fee for service. Looks at EVERY mortgage provider, weather the deal is available to apply via the broker or not. Makes recommendation. IF the deal is available to the broker to apply for, they do. Any commission is offset against the fee with excess commission rebated to the client. If not, client pays the fee, broker helps them to make the application themselves.

Broker B. "Whole of Market". Searches broker deals. Doesnt charge a fee and gets paid in commission.


The problem is client perception. People dont want to pay £500 up front. 90% of the time they would probably get a better deal and may even make money from the commission rebate, but the problem is people dont see it like that, so they like the idea of commission only sales.

Its a sad fact, but thats the way it is. 99% of brokers would prefer to be Broker A, inclusing myself, but until such a time that the general public realise this is in thier best interests it will continue to be the exception rather than the norm.


Finding the right mortgage for someone isnt just abot going onto moneysupermarket and filling in a few boxes, as they would have you believe. People buy unsuitable mortgages in this manner every single day. The service of a broker can be invaluable. Its not just about what you pay each month. It goes MUCH deeper than that.

happymoneysaver79

Hello there!
Slightly off topic but wondered if someone could tell me how long before your current mortgage deal ends can you secure another? Just a bit worried about where we stand when our deal finishes.
Any advice would be greatly appreciated.

Many thanks

xx

andrewmp

minimike2 wrote: »

Finding the right mortgage for someone isnt just abot going onto moneysupermarket and filling in a few boxes, as they would have you believe. People buy unsuitable mortgages in this manner every single day. The service of a broker can be invaluable. Its not just about what you pay each month. It goes MUCH deeper than that.

I realise that but they'll give you a list of the different interest rates each company offers on each product along with details of the fees. It's then up to the person applying to check it is suitable.

It was up to me to work out if I wanted a long term fix etc but surely that would be the same with the broker. Surely the important thing is the total amount payable over the term including any fees whether added to the mortgage or not?

koexelek

andrewmp wrote: »

Surely the important thing is the total amount payable over the term including any fees whether added to the mortgage or not?

It sure is.

Lenders often design products where the monthly payment looks good, but the overall costs are high.
These are the sort of products the uninitiated will end up choosing.
As most lenders no longer give advice, it is the clients's own fault if they choose the wrong one.

andrewmp

koexelek wrote: »

It sure is.

Lenders often design products where the monthly payment looks good, but the overall costs are high.
These are the sort of products the uninitiated will end up choosing.
As most lenders no longer give advice, it is the clients's own fault if they choose the wrong one.

Yeah, I noticed that, short term low rate fixes with fees which, as if by magic, made the actual interest rate over the fix about the same as their fee free product.

Mine had a £1000 arrangement fee which is a bit steep but it's fixed for 25 years so in theory they'll get no more from me in arrangement fees.

minimike2

andrewmp wrote: »

I realise that but they'll give you a list of the different interest rates each company offers on each product along with details of the fees. It's then up to the person applying to check it is suitable.

It was up to me to work out if I wanted a long term fix etc but surely that would be the same with the broker. Surely the important thing is the total amount payable over the term including any fees whether added to the mortgage or not?

Thing is you would be suprised how many people I see who say something like "we want another 2 year fixed deal" / similar "we want" statement, then when you do a fact find you work out that what they think they want is actually totally unsuitable. I have just sorted a client with a 15 year fixed deal that is spot on for them - at the first meeting they told me they wanted a two year fixed, but realised once I had made my recommendations that actually that wasnt what was best for them.

I have had clients that wanted to arrange thier own mortgage get me out to see them, (another who wanted a two year fix), take my advice to do a 10 year fix, then cut me out and go direct to get a 10 year as they agreed with my advice. This is quite frankly, rude and underhand......they STILL lost out because I could have got them a cheaper ten year fix than what they went for. I made a point of telling them this - It gets my back up people that "use" brokers for advice then dont deal through them - we have to make a living too, we dont do it for fun! On this occasion they still lost out even after they thought they had been clever.

This happens day in day out.

Im not saying that EVERYONE should use a broker. It would be nieave of me to think that everyone would benefit - but what annoys me is the comments people make about brokers being useless / a waste of time / non-value adding, as its just not true. 80% of mortgage business is arranged through intermediaries. If it was the case that we are a waste of time then that figure would not be anywhere near that. Just because something isnt right for one person, doesnt make it so for another.

andrewmp

I see what you are saying. Brokers are beneficial to people who don't really know what they want and need advice. As you point out this is a lot, if not most people. People can never be bothered to do the leg work themselves, at least it keeps you in a job!

mrstinchcombe

minimike2 wrote: »

Thats not correct - its just that its not viable.

Let me explain.

Broker A. Charges a £500 fee for service. Looks at EVERY mortgage provider, weather the deal is available to apply via the broker or not. Makes recommendation. IF the deal is available to the broker to apply for, they do. Any commission is offset against the fee with excess commission rebated to the client. If not, client pays the fee, broker helps them to make the application themselves.

Broker B. "Whole of Market". Searches broker deals. Doesnt charge a fee and gets paid in commission.


The problem is client perception. People dont want to pay £500 up front. 90% of the time they would probably get a better deal and may even make money from the commission rebate, but the problem is people dont see it like that, so they like the idea of commission only sales.

Its a sad fact, but thats the way it is. 99% of brokers would prefer to be Broker A, inclusing myself, but until such a time that the general public realise this is in thier best interests it will continue to be the exception rather than the norm.

Im sorry but I don't see how paying £500 for something you can get for free or even do yourself in this internet age) is good for the customer.