Why pay a broker to arrange a mortgage?

AntiLochus

Hi,

My wife spoke to a mortgage broker today to talk about a new fixed rate deal. Basically our current deal ends in June (5.14% BOS) and the best the broker came up with was a 3-year fixed at 3.99% - arrangment fee £995 (our LTV is less than 60%)

Fair enough - then he says his fees are £300

Now, being savvy, I looked around and can get the same deal on Mortgage Genie - instead of paying the broker a fee of £300, we can get £264 cashback as a rebate. I have used Mortgage Genie in the past and receive the rebate with no problem.

So, why would we pay a broker £300 to arrange the same product without receiving a rebate?

Also, I would prefer to fix for 5+ years but haven't seen any deals less than 4% yet - anyone else seen anything out there?

Thanks for reading

koexelek

AntiLochus wrote: »

Now, being savvy, I looked around and can get the same deal on Mortgage Genie - instead of paying the broker a fee of £300, we can get £264 cashback as a rebate. I have used Mortgage Genie in the past and receive the rebate with no problem.

So, why would we pay a broker £300 to arrange the same product without receiving a rebate?

Also, I would prefer to fix for 5+ years but haven't seen any deals less than 4% yet - anyone else seen anything out there?

Thanks for reading

I've never heard of Mortgage Genie, but if they are going to give you comission back, where as the broker is going to charge you an extra £300,and you end up with the same product at the end of the day, it seems like a no brainer which way to go to me

I have not seen any sub 4% long term fixes, by the way

payless

the adviser is adding value.. wether you feel the "added value" is worth £564.. thats the question....

A better situation would be getting the "added value" without being out of pocket. You may find a true independnt mortgage adviser will offer you a service at a flat fee ( fee likely depends on how complex the case is- you may also be able to get him to look at deals that don't pay brokers ) ... the fee may be charged upfront or on completion , and then your get all the commisison back - or just offset the 2 , so you get the difference back.

herbiesjp

payless wrote: »

the adviser is adding value.. wether you feel the added value is worth £564.. thats the question....

A better situation would be getting the added value without being out of pocket

Exactly

Go via a broker that does not charge the fee, but get the benefits (indemnified advice) of having gone via the broker

Robert_Sterling_3

koexelek wrote: »

I've never heard of Mortgage Genie

Nor had I but I have now.
They offer up to 50% of their commission as a rebate.
I will not provide a link but Google them up if you care to do so.
Perhaps MSE would allow a link to Mortgage Genie and perhaps not.

In the end you might "payless"

AntiLochus

Check out Martin's article on Mortgages for info on Mortgage Genie:

http://www.moneysavingexpert.com/mortgages/best-mortgages-cashback#cashback

I am in no way affiliated with them - just used them in the past

payless

Yeah but also check out my comments ( post no2 ) on http://forums.moneysavingexpert.com/showthread.html?p=19160255 about people jumping at that .. and potentially losing out more than the cashback

payless

Robert_Sterling wrote: »

Perhaps MSE would allow a link to Mortgage Genie and perhaps not.

In the end you might "payless"

Oh he does indeed together with that little *

* = LINKS THAT HELP THIS SITE

---

ramtec

I used moneybackmortgages for one of mine and got a friend to do the same on the other I needed, 50% back on both. Tony at moneybackmorgages.com was excellent cashback was very prompt

GGGG

AntiLochus
You're right- in a simple, straightforward case like this appears to be, it's easy to sort it yourself.
However, I would point out that every case is not the same; peoples' level of understanding varies,as do their circumstances. To make a sweeping generalisation based on one particular instance is a little unfair! I always try to treat my clients the way I would expect to be treated, & am honest about how much work is likely to be involved. Most folk go to work to earn a living, & Mortgage Brokers are no different. I would agree that some bad apples exist, but I suspect the majority are decent, hard-working people who want to help others achieve their goals.
Would other forum users agree that they expect to be paid for the job they do, whether they work as rocket scientists or roadsweepers? Plenty of qualified, experienced advisers freely give their assistance on these forums with no financial gain; I suspect their motives are like my own, to help others in need & show that we are not all shysters & charlatans!

Robert_Sterling_3

GGGG wrote: »

Plenty of qualified, experienced advisers freely give their assistance on these forums with no financial gain; I suspect their motives are like my own, to help others in need & show that we are not all shysters & charlatans!

Does this refer to those who give the advice without "letting on" that they are Mortgage Advisers rather than those who advertise the fact in the signature area of their post?