Martins View On Using Mortgage Brokers...

GMS

pukkamum wrote: »

My dh and i want to buy our council house, we have a good credit score and very little debt, a £1000 loan which ends next month and £600 on credit cards between us (on 2 cards).
I have two questions
1/ would we need a deposit even though with our discount we would only need a 75% mortgage.
2/ should we go through a broker or try and arrange a mortgage ourselves, i have been tempted by the brokers which cover solicitors fees etc to be added to the mortgage but worry about fees etc.

1/ No
2/ Up to you if you use a broker or not. Do you know how mortgages work? If you do then you could do it yourself, if not use a broker. A Right to Buy application is easy enough if you know what you are doing but can be confusing of not.
Brokers will not cover fees. Lenders may do this but it is usuallybalanced by the rates. Agree any broker fees with the broker up front. A broker should assess your needs and preferences so if lender and valuation fees are a concern this would be adressed.

pukkamum

GMS wrote: »

1/ No
2/ Up to you if you use a broker or not. Do you know how mortgages work? If you do then you could do it yourself, if not use a broker. A Right to Buy application is easy enough if you know what you are doing but can be confusing of not.
Brokers will not cover fees. Lenders may do this but it is usuallybalanced by the rates. Agree any broker fees with the broker up front. A broker should assess your needs and preferences so if lender and valuation fees are a concern this would be adressed.

Thank you can i also ask am i right in thinking that not many high street banks offer right to buy mortgages?
If so will this mean paying a much higher interest rate?

GMS

Many do. Rates would depend on your circumstances.

Income, credit history, dependants etc.

Impossible to say without knowing your circumstances

Nara

A few questions to ask, hope someone can help me!

We are currently living in the first house we have ever bought, we want to move and have had our house valued. I am also going to look at a house this weekend.

The only problem is we have not spoken to anyone yet about a mortgage! I know I'm getting ahead of myself but houses that i think (hope) fall into our price range don't come up often in our village so we are going to have a look!

My question is, I have been looking at mortgages on the internet and would like to go for a fixed rate, but until you sell your house and know how much you are going to get and how much you are spending to buy, how is it possible to work out how much you will need to borrow? Its making it confusing knowing how much i should be typing into these sites to find out the best rates etc.

We will have 60k equity but only if we get x amount for our house and spend x amount on this possible house, im taking away 10k of that for fees etc leaving us with 50k equity, so should i just hope we get x amount and apply for a mortgage on that grounds? I find the whole system so confusing that a broker seems the best way forward, but then that doesn't seem to come without its draw backs and are they really finding you the best deal?!!?!

Do they work out how much you can borrow based on wages alone? or how much you can afford a month? We also have debts affecting things, would it be best to spend another 10k of the equity to pay these off and have a higher mortgage, or keep the debts put more down on the new house and have a lower mortgage but then possiblily wont be able to borrow as much lol! Our credit history is good and we have never missed any payments. Gawd knows the best thing to do, and i would find it hard to trust anyone is helping us with advice without also helping themselves!

Me and my silly idea to move house

GMS

You seem very confused with it all. A broker would definitely help you.

10 k for fees is probably excessive but better to over estimate than under.

As for taking advice and worrying the broker is helping themselves. A broker will not work for free, as with any other profession. Nobody would expect to call a plumber round, have their leak fixed and expect to pay no fee.

A broker recommends the most suitable product for a clients circumstances. This is fully documented and comes with the protection of recourse in the event of any mis selling.

Agree fees up front and let the broker do their job. Also check your own bank, and lenders who do not deal with brokers for a comparison.

tedderr

My question is quite simple.

What qulaifications does this Martin Lewis have to give financial advice or even opinion anyway?

On his site he promotes bonds and savings without any respect for the law.

Bet you wont answer that one Mr Lewis.

tedderr

dunstonh

On his site he promotes bonds and savings without any respect for the law.

They are not regulated financial products so he can say what he likes about them.

What qulaifications does this Martin Lewis have to give financial advice or even opinion anyway?

You generally find that most articles Martin does have no financial advice and accusations of such turn out to be wrong. For example, the recent pension drawdown error made the headlines and I thought it was wrong based on the media coverage until I actually saw the clip in question and realised it was no big deal.

I do think that sometimes the programmes that he is asked to appear on can give the impression which leads to consumers thinking that he is an adviser. I also think individuals can read too much in to the articles. For example, the pension article on this site is woefully out of date and includes a product that was withdrawn over 3 years ago and replaced with a higher cost product. Yet based on forum posts, its clear people are buying the product from that provider thinking a) its the best option and b) its the same one as the article.

trulysaintly

Mr_David_Jones wrote: »

'Whole of Market' Mortgage Advice, 'Independent' Mortgage Advice, 'Direct Mortgage Deals'.... on and ariston....

I have found easily the best fees from a mortgage broker;

One set fee of say £275, this represents a good and honest wage for any days work! This is charged upfront for independent advice, or taken from the lenders fee to the adviser on completion.

This means that with most lenders and for most mortgage values, the broker will be paying the client money, for their mortgage advice - has to be the best way.

Example;

Whole of Market - If an adviser earns £500 from a mortgage lender, they then return the difference of £225 (£500 - £275 = £225) to the client.

Independent - The same fee of £275 is charged upfront, then the whole £500 is returned to the client. If there is no fee payable from the lender for a direct product, well rest assured that the best mortgage deal was achieved.

This seems easily the fairest way mortgage brokers should charge any fees

Sorry but if you think that you're only paying for one days' work, then you're wrong.

Do you appreciate how long we as brokers work on your applications?

Initial meeting - 1hr
Research - 5-6 hours
Packaging application for submission - 2 hours
Submitting application to lender - 1hr
Liasing with Solicitors, Estate Agents, Accountants until completion - at least 5-6 hours.

How much would 14 hours of your solicitors or accountants time cost?

Substantially more than the £275 you mention.

handytips

As a 'Whole of Market' Mortgage broker, I always charge a brokerage fee, i visit people in their homes, and i walk them throught the whole process, if they want help filling in solicitor questionaires, then i do this, if they want someone to witness the deed and get it back to the solictior, then i do this. As i see it, if you give a good service why shouldnt a broker charge a fee, Yes we get paid a commission by the lender and in most cases the commission is paltry. I charge a lifetime fee, then all further mortgage business in the future is done free of a broker fee. As for refunding commission then i would never do this. It is all about getting the right products for the client. I will quite often see people who have arranged their own mortgage and insurances in the past and to put it bluntly have paid way over the odds for the products, from the mortgage to life insurance and home insurance. The comparison sites are a dangerous playground and people should be very wary of them imo.
A good trusted Morgage Broker will always have your best interests in mind. For example how many high street lenders will advise shorenening the mortgage term instead of a reduced monthly payment when re-mortgaging, i would suggest a very small number, as it is in the banks interest to keep you with them as long as possible, therefore if i were to shave 2 years off your mortgage and you are still paying the same monthly amount and your payment stays the same (i will let you do the maths) a broker has more than earned his fee, its what you get from your broker over a period of time is the important factor, you will imo get value for your money over the years, also by charging a fee a broker should also offer products where a commission from the lender isnt paid. Good advice costs, and remember we pay fees for everything, a newspaper doesnt cost the newsagent 50p but it does cost you 50p and does he refund you his profit. No
There are many good value Mortgage Brokers out there and they are now easier to find as i would suggest that the ones that have survived the recent financial meltdown, must be doing something right for their clients. However Good Luck whichever way you choose.

Flower3200

A mortgage adviser can decide how they are remunerated for the work they do and can decide if they receive remuneration by

1. charging an adviser fee
2. receiving commission only from the lender or product provider
3. a combination of adviser fee and commission
4. charging an adviser fee and then reimbursing this from lenders commission
this list is not exhaustive.

the important thing is that the mortgage adviser provides a document called a "Key Facts document" at the onset of their dealings with you as a prospective client.

You can then use this document to compare the level of service offered by the Mortgage Adviser and their company costs. This document will also advise if the Mortgage Adviser is an Independent whole of market adviser, tied to a limited number of lenders or if they will use a single company.

An Independent Whole of Market adviser is the option most likely to secure you a competitive mortgage solution.

A this point it's worth mentioning that there are some lenders who will not offer/distribute their mortgage products via a mortgage introducer (HSBC for example) and will only sell their products to customers contacting them directly i.e walking into their branch or phoning/online application etc.

Then there are other lenders who will have a dual product range i.e they will make some produts available through mortgage Advisers and some directly to the public.


On this back of this there is are two new types of Independent whole of market Mortgage Advisers.

The first who will only search the market for products/lenders who will allow them to arrange the mortgage and the lender will in turn pay the Mortgage Adviser a commission payment at completion for their work. The Mortgage Adviser is paid a commission and in turn earns an income from this option (they can of course still charge a further mortgage advice fee if they wish.)

The second type of Independent Whole of Market Mortgage Adviser will actually search the whole of the market and include a search of all lenders and their mortgage products to then truly be able to recommend the most competitive mortgage solution from the whole of the market. Now if that recommendation, is from a lender who will not deal with a mortgage adviser there will be no commission payment made to the Mortgage Adviser - so this begs the question how does the mortgage adviser receive an income payment for the work they have undertaken? This type of mortgage adviser is going to charge an adviser fee....

I have to say this last example then puts a question mark over Martin Lewis's advice - if the broker charges a mortgage adviser fee - go elsewhere........ if you did this you would be likely to have just dismissed the Independent WOM mortgage adviser who would have completed the most comprehensive search of the mortgage market i.e a true independent whole of market search and recommendation.

I am a mortgage adviser and this is the level of service I provide i.e the true independent whole of market level. I am a professional and I charge an adviser fee and take commission from the lender. I am not touting for business as I like to deal FACE to FACE with my clients and therefore, do not handle out of area business.

None of this information is provided with the intention of giving any specific mortgage advice
I do hope this helps if not The Money Advice service provides useful information as well if you google you will find it. :rotfl: