Paying for Broker advice

ultramagnetic_commuter

Usually one to find deals online for myself but as we're looking to buy new house I thought I should speak to someone who might have some deals I wouldn't see.

Quick question - I thought about just seeing the mortgage broker from our selling agent (Haart). I assume they get their fee from the lender and that, to me the service is free?

Thanks

waynehayes

We have never paid for mortgage advice. We recently went to an advisor we hadn't used before. At the end of our second visit she informed us of her £500 fee. We thanked her for her time and left. In the end we went through Countrywide, who got us a much better fixed rate as well as saved us £1000 in arrangement fees. Plus their advice is free too.

Mrs_Bumble

Currently the FSA's RDR document is looking at whether commission/procuration fees are the most ethical way for an adviser to get paid as they believe it creates bias, this taken with the fact that lenders have dramatically reduced the level of procuration fee they pay. with the fact that getting a mortgage application approved takes more effort in the majority of cases.

So if you live in an area where the typical mortgage is probably between £50,000 - £100,00 and you receive 0.30 ish in procuration fee it can mean that the amount received now doesn't cover the work undertaken, I myself visit clients in their home as I believe it is more convenient for them but this has to be taken into consideration as well. Therefore many advisers are now having to look at different payment methods I myself opt for a fee that is offset by any commission received. This way the fee charged to the client can be kept to a minimum and the work I carry out is all covered by what I earn, I believe that is fair.

I believe it is all about getting good honest advice and value for money and people are generally happy if they believe they have received that.

If the FSA push ahead with their hope of making everyone fee based then there will be no commission or procuration fee and so anyone who wants to work in this business will have to charge a fee to stay afloat. I don't think this is right but the FSA are the governing body.

I think in the current market I think it pays to get advice, the initial consultation is always free.

koexelek

Although consoltations will be free, I believe Haart charge a percentage of the mortgage as an arrangement fee, as well as the commission they get from the lender

benjo

Im not a mortgage advisor so any info here is just from personal experience and learning.

Some mortgage lenders will not deal via brokers, some lenders will only deal via brokers - taking either route exclusively means you cannot access 100% or lenders.

Some brokers/advisors require a fixed fee, some a % of the borrowing, some work purely on commission from the lender.

Some 'advisors' are tied to certain products, like those who work inside your local bank - they can only sell products provided by their own company and are not 'whole of market', their job title might be advisor but it could be argued that 'salesman of own company products' might be more accurate since they will not advise you of any option that includes products outside of their range.

I have read here that if your circumstances are very straightforward, needs uncomplicated and you have the time and inclination to research the products and enable yourself to make a fully informed decision then why not go it alone....

During my recent experience of buying I took time to research what products/lenders I could, that gave me a clear indication of the product that suited my needs (5 year fix), I knew what the very lowest rate was at the time (3.99%) and I also knew that my circumstances where a little complex (so 3.99% was never going to be available to me) and I knew that 5.5-6.0% was probably a reality for me.

I asked for and received some great tips from brokers who give their time here and ultimately, after personal recommendation opted to use a fee free, whole of market broker local to me. From start to finish I was really impressed by the level of communication and the service he provided and got a 4.49% 5 year fix, £595 product fee from a lender who only takes new business via an intermediary - I really hope he earned every penny I feel he deserved. It saved me time and money on telephone calls, leg work and making multiple applications to companies who (unknowingly to me) probably wouldnt have considered my applications, thus saving unecessary credit searches.

Ultimately...whatever floats yer boat - goodluck.

dunstonh

Quick question - I thought about just seeing the mortgage broker from our selling agent (Haart). I assume they get their fee from the lender and that, to me the service is free?

Paying a fee for an independent mortgage adviser sourcing FULL whole of market can end up cheaper than not paying a whole of market mortgage adviser only considering commission deals.

The FSA definition of whole of market is confusing as it doesnt mean whole of market. If you are paying a fee you should make sure the mortgage adviser includes all deals. That means non commission payers and direct mortgages.

ultramagnetic_commuter

benjo wrote: »

I have read here that if your circumstances are very straightforward, needs uncomplicated and you have the time and inclination to research the products and enable yourself to make a fully informed decision then why not go it alone....

Thanks for the all the advice. On the point above, I would be keen to go alone but am led to believe that brokers often get deals not available to the general public. If the can't offer me anything better than my existing research then I don't see much point using them.

Mrs_Bumble

In the current market the lenders are constantly changing criteria and moving the goal post, the broker knows the lenders and what they will and won't accept and how flexible they are also which lenders are a problem to deal with etc.