Why do people use mortgage brokers?

Ian_Griffiths_Halifax

macaque wrote: »

Human nature being what it is means that mortgage brokers are least likely to tell you about the best deals.

You insulted me first with this statement!

As for the Times, well, there is so much more to arranging a mortgage than the interest rate and it's fees.

I had a client come to me after going to an extate agents adviser and he was happy to pay me to arrange a deal with the same lender they advised and this was despite the interst rate being higher! Why's that?

Well the mortgage he was being recommended was a short term tracker with overhanging penalties and the one I recommended was a 5 year Fixed rate.

If you go around thinking that everybody in a given profession is a conman and a thief, you'll be a very busy man doing everything your self.

Ian_Griffiths_Halifax

Ahhh, it all makes sense now. macaque specialises in winding people up to provoke a reaction.

Here's one of his examples

http://forums.moneysavingexpert.com/showthread.html?p=18904111#post18904111

And another

http://forums.moneysavingexpert.com/showthread.html?p=18853645#post18853645

And another

http://forums.moneysavingexpert.com/showthread.html?p=18852999#post18852999

I don't think I'll waste my time on him any more. It's not good for the blood pressure.

abaxas

To get back on topic. The reason that people use mortgage brokers is because lots of mortgage companies wanted their !!!!! covered for free. Hence pushed the idea.

A financial product sold directly to a consumer requires working within the law, a product sold via an 'intermediary' shifts this responsibility onto the broker. Sold the wrong product? Sorry but that's the responsibility of your financial adviser etc etc.

Also, lots of brokers were semi employed by companies to push their products. GE money (subprime) were heavy into this. You could never tell if your broken was independent (ie working for his max profit for himself) or a stooge.

lostinrates

I'd use a mortgage broker. Although the properties we have so far (unsuccessfully) offered on would be covered adaquately by fairly standard mortgage other types of property we'd consider wouldn't be and the options are, I admit, confusing at times.

I'd LIKE the reassurance of a mortgage broker to whom our application is maybe an interesting one, but one of many, as he/she would be less likely to flap over each point of confusion/delay etc.

Some brokers who post here do sound as if they have genuine interest in doing their job well. My problem is more basic: how to find a broker I trust!

Lifeisbutadream

macaque wrote: »

I don't want to be critical but I do think you are being far too trusting.

Possibly, but I am happy with what I have (for now) so thats all that matters really isnt it?

stevetodd

macaque wrote: »

And you know that because he told you so?

How much trouble would it be for him to confirm that he has given you the best value product?

There have been countless examples of miss-selling in recent years and the regulatory bodies seem to fail us every time. These problem won't go away until people take matters into their own hands. A good starting point is to get written confirmation that the advice given represents best value. If the adviser has served you well, everything will be fine and he/she will be happy to sign the paper. If not, you have to ask yourself why.

I don't want to be critical but I do think you are being far too trusting.

I agree, but there's nothing wrong in using a broker if he comes up with a better deal than you could find yourself (and obviously the difference is sufficient to justify his fee)

bo_drinker

If you want to bend the High St rules, self cert, lie to buy etc etc then that is why many use brokers, or it was. There was a good ad a while back in Exchange and Mart, David Shaw I think his name is. He would take anything into consideration as earnings, dole incapacity etc etc also 6+ X salary more if you like. Turn the page and you could get those wage slips reprinted you "lost". More likely for them to turn a blind eye to such capers.

mrstinchcombe

Why hire a mortgage broker?

Because some people are lazy and like wasting money on things they can easily do themselves. Afterall why do some people have cleaners to clean their homes?

stevetodd

mrstinchcombe wrote: »

Why hire a mortgage broker?

Because some people are lazy and like wasting money on things they can easily do themselves. Afterall why do some people have cleaners to clean their homes?

Its only common sense to hire a cleaner if you earn much more than you would pay her. There are only so many hours in the day and you only have one life, I would much rather be walking my dog in the woods while my cleaner is cleaning my bathroom than doing it myself.

ps my dog said he agrees, he would much rather be in the woods than sitting outside the bathroom watching me clean it.

HelpWhereIcan

baby_boomer wrote: »

There used to be zillions of mortgages - some of which were reserved exclusively for mortgage brokers as the banks sought ways to offload even more mortgages.

And it was probably worth going back to a mortgage broker every two years to get (yet) another deal that meant you were paying less on your mortgage than you got on your savings accounts.

With fewer mortgages available and fewer mortgage sold, the market is a simpler place for the consumer.

This post actually cuts to most of the truth of the current situation. The fact that there are instances where deals available direct have lower rates/fees is actually pretty much a function of the credit crunch.

The situation up until about March last year was that there were very few deals that a broker could not access and 95% of the time they were not as competitive as those that a broker could access.

Since the credit crunch really took hold there are certain lenders in certain markets that offer deals that are more attractive at first sight - and in quite a few cases they are better by most measures (cost over term, cost over term of deal, early repayment charges etc).

The situation is likely to be temporary (1-2 years) as return to demand for volume means that lenders will reverse the situation - afterall, most lenders relied on brokers for up to 70% - 80% of all their mortgage business. Once they no longer have the need to keep their own staff busy and productive they are likely to start wooing the (by then) smaller broker market again... and they will probably have to pay more to get business from fewer brokers; which will attract people to the job again; which will lead to volumes etc etc - and so the cycle repeats.

However, those same lenders are cherry picking the markets and customers they want to deal with. So much so that there is a significant number of people that do not qualify for the deal they applied for who (in the best case scenario) opt for the next best deal offered by that lender or have to spend time doing their research again to find another lender who will lend to them. In my experience this can lead to people taking mortgages that do not suit their needs because they think it is all they can get or, worse still damaging their chances of being accepted elsewhere by making multiple applications in an attempt to get something.

Not everyone needs or wants to use a broker - that's fine by me. I have seen enough people make very good jobs of getting their own mortgages to know that they did not need me; but at the same time I have also had to pick up the pieces of DIY mortgage arranging - especially recently when people's circumstances have changed.

The industry's detractors can say what they like I know what quality my work is and I have my own 'professions that are a waste of time and/or a rip off list' - including at the moment many solicitors, all web designers and most IT retards who do a correspondance course and call themselves a consultant - so I do not expect special treatment. I just know my customers are glad for the work I have done for them and appreciate me.

mewbie wrote: »

If it was a flat rate fee, say fifty quid an hour, then that might be different. But sales commision for choosing particular mortgages. No thanks.

I think you would find that 99% of brokers would be more than happy to act for you on that basis. It is actually better for us as we get paid for the time we spend working for someone rather than depending on them taking out a mortgage before we get paid.

Would have earned me a lot of money for all the people who I ended up telling to stay with their current lender on SVR while we monitor the market for a suitable deal to come along.