Martins View On Using Mortgage Brokers...

beeb_boy

Hi all

I am in the process of sorting out a mortgage for a shared ownership flat. My mortgage broker is charging me £599 upon completion of the sale. Would this be a normal amount to pay? The company is chesterton Grant. Has anyone had dealings with them. The advisor is coming to sign the papers on friday so any advice would be good before then if it's bad news I don't want to sign into more debt.....

My credit in the past has been bad and I currently have 2 defaults (which I am in the process of paying off). I need to get on the property ladder and the shared ownership scheme is my only way. I thought all brokers got a commission from the lender and the buyer didn't have to pay fees but I see from the many posts in this thread that thats not the case...should I change brokers now to a non fee broker now that I know what mortgage to go after? The additional charge of the broker puts a dent in my budget especially as I have solicitor to pay! I have to pay an upfront payment to the mortgage lender this friday of £400. This is for the valuation fee. Is this normal as well??

So much money!

thanks in advance...

The_Loan_Voice

Hello beeb_boy,
It seems to me that you have a number of choices to make here:-
firstly, weather or not to use a mortgage broker atall
secondly, to pay or not to pay
third, if the fees are realistic for the work.
and lastly how the fees affect your budget and overall cost.

I can't offer opinion on your choice of broker as I have no knowledge of them, nor would I as its professionaly inappropriate to comment on a fellow broker. However, I would advocate the use of a broker given the two key features of your situation, namely the staircase arrangement(shared equity) and secondly your defaults, both of these merit the attention of a skilled broker if you are to get the bet product and not just any old mortgage.
The fee your broker is proposing of £599 is not offensive given the work envolved- there are national companies out there that would charge you £1500+ for a simple remortgage, never mind a job like yours, you could switch to a fee free broker at the last moment but thats not really cricket and if it goes pair shaped part way through you could come unstuck. Yes, the vast majority, but buy no means all, of lenders pay a commission to the broker for the work done, this varies from about 0.3% of the loan to 1.5%+ so you need to ask yourself were the brokers loyalty lies, is it to you as the paying customer or to himself for financial gain? All brokers can be asked by the regulator to justify a product selection, picking one because you you earn the most from it wont go down well!
Valuation fees are completly normal and as a rule of thumb, reasonable,, lender's product fee vary wildly and can hide all sorts of nasties.
Most importantly though- if you can afford to pay any fees, broker, lender or valuation from your own cash then do! Never Ever Ever add fees to the mortgage loan- you will pay interest it for 25 years and end up costing you a fourtune
Best of Luck
:beer:

The Loan Voice

FirstTimer4Me

Hi

No offence, but I’m finding this whole thread confusing.

I have no idea when it comes to financial matters.

2003, I took out a 100% joint mortgage with a well-known High St bank, back then we had a 2 year fixed deal, then 2005, we again renewed another 2 year fixed deal with the same lender.

When our deal was up for renewal back in 2005, another High St bank, offered a lower rate fixed for 2 years, but our original lender wanted over £600:00 for the deeds, (I think that is what the fee was for) which made the offer of a lower fixed rate, not that good, hence, why we stayed with our original lender.

Next month our fixed deal is up for renewal, not sure how to go about trying to get the best deal.

I trust the above is self explanatory

dunstonh

I have no idea when it comes to financial matters.

....

not sure how to go about trying to get the best deal.

seems like you need a whole of market mortgage adviser.

drummer_boy_2

Hi First Timer
I have had a look through this thread and I am not surprised you are confused, I have been an adviser for best part 20 years of which 7 have been independent including broking whole of market mortgages, I am aware of some advisers charging fees where I would not consider they are justified but equally I would say as a business owner it for me comes down to pounds, shillings and pence, we have set a minimum renumeration for mortgage advice at £500 which includes receiving a fee from the lender, ie if the lender pays us £400 then we would charge the client a fee of £100 to make up the shortfall, this decision was made purely from a business point of view. If we place a relatively small mortgage for a client and what we receive from the lender is insufficient to cover our time and costs we agree a fee to make up the shortfall, I do not know of anybody who runs a business buying in work, least not one who is still trading! although conversely I am aware of some brokers charging a flat fee of 1% on top of what they receive from the lender and I am more than happy to agree that this is not justified.

FirstTimer4Me

dunstonh wrote: »

....

seems like you need a whole of market mortgage adviser.

At least that's a start

The_Loan_Voice

FirstTimer4Me,
The one thing you don't make clear in your post is wether or not you used a mortgage broker for your original deal or just walked into a random high street bank. I suspect, from your current confussion you took the latter option, had you employed a good mortgage broker then he/she would have developed a longer term plan with you., i.e. stage 1: get you onto the property ladder as cheaply as possible, stage two: maximise your security against out side events (lossing job, rate rises etc.) stage three: minimise the overall cost of buying your home (reduce the interest you pay over time). Obviously I have simplified matters greatly here but, the point is clear- a good mortgage broker should become a trusted adviser and assist you with your long term financial plans and have a much interest in your financial wellbeing as you do.
:beer:

The Loan Voice

FirstTimer4Me

The_Loan_Voice wrote: »

FirstTimer4Me,
The one thing you don't make clear in your post is wether or not you used a mortgage broker for your original deal or just walked into a random high street bank.

The_Loan_Voice wrote: »

I suspect, from your current confussion you took the latter option.

Hi

This is how events developed.

I visited an estate agents looking for a property, whilst in there, I was advised to speak to their mortgage advisor.

As it was a joint mortgage, he took details of our finances, and informed us who was willing to lend on a 100% mortgage.

We found a property, and went back to the financial advisor at the estate agents; he sorted out the mortgage, with a 2year fixed deal.

When that deal was about to expire, I went back to him with the new details from my current mortgage lender, to be honest the mortgage advisor was not really interested, he never looked at any rates on his laptop, just glanced at my paperwork, and said I should stick with my current lender, although I should phone my current lender first, and ask what’s the best offer as they always have “Under the counter offers”

The mortgage advisor had my contact details, and said he would call me the following day a) to see how I got on, and b) he will check the latest rates as they are always changing.

The mortgage advisor never called me back, so I just renewed with my current lender.

My current deal is up for renewal next month.

The_Loan_Voice

:beer: Like I said, had you employed a good mortgage broker...................

If I can offer you one pearl of wisdom at this point, it's this: Take you time.

Dont rush into a new deal just because your current one is about to expire, invest some time and energy and find a really good local broker or IFA, one that will service your needs over the long term, talk to friends, colleges and family to see if anybody has a recomendation, if they do, great your half way there, you know you should be able to trust the guy, but you still need to do your homework and ask the key questions. Is he whole of market?- can he choose from any product in the UK market place or just a few, Is he fees free or will he want you to pay him for his time and rebate any commission to you, thus able to call himself indepentant or will he charge you a fee AND keep the commission. Has he had any complaints made against him in recent years, how long has he been practicing- in short, dont just walk into some guys office and thrust your mortgage at him- he could be a 24ct plonker and you've done that already.

Happy Hunting

FirstTimer4Me

[QUOTE=The_Loan_Voice;dont_just_walk_into_some_guys_office_and_thrust_your_mortgage_at_him-_he_could_be_a_24ct_plonker_and_you've_done_that_already.Happy_Hunting[/QUOTE]
Yeh I have, and I'm learning from that experience, which is why I'm here doing some research.

Cheers for the help.