mortgage - bank or broker?

MortgageMamma

Andy

Whilst I predominantly agree with your comments on the level of experience, I do feel that fee charging brokers are able to give their clients a better overall standard of service, and dedicate more time to the client, as they don't have to take on as many clients or as much work, making them more "available" to the client. For example, if you took on 5 cases a week, and each case took 20 hours, over the estimated completion time period, i.e. six weeks this would be 30 cases at 20 hours = 600 hours divided by six makes a 100 hour working week. Not humanly possible for a one man band without administration support.

If you took just 3 clients a week and charged a fee as well as commission, then your working week would be 60 hours a week, which is a bit more normal and doable.

The clients then will obviously get a better standard of service, as their broker is not burnt out and can give them undivided attention when they need it.

Fee's free may be the way to go for some brokers, and ML may well endorse it, but unless you got a lot of HNW cases, with an avergae proc fee of just 0.35% you would either have a meagre income for the huge efforts, or have to write a hell of a lot of business to make a decent living!

AndrewSmith

As I said,

Each to their own but I have never had service standard issues, make a decent living and do not charge fees.

As fee charging brokers you and Stanmoresaver will obviously suggest that will be the better route for clients to go. As a non fee charging broker I am bound to suggest that non fee chargin is the best way.

I think it is down to individual choice at the end of the day however I was making the point in reply to TerryB's post where he states that in his opinion fee charging brokers have better knowledge and experience.

Would you agree with that point?

Andy

herbiesjp

And I think that I have to agree with Andy at this point

MortgageMamma

No I dont agree with the fact that fee charging brokers have more experience. Anyone could set up charging fee's from day one as you say. Your business model works enormously well for you but I think I would struggle with writing so many cases each week.

Just for clarification though, I dont charge all my client's fee's, if for example its a simple remortgage and done over the phone/or is local to me I wouldnt bother. Its just the lower end of the scale, mortgage under say £100,000 where the work outweighs the proc fee. The area where I live and work a £150k mortgage is considered big. suppose its what comes of liveing in the middle of nowhere. I'd really like to be able to go back to being fee's free again but all you do is open yourself up to timewasters who want free advice.

nmiah786

Wow. I thought Andy was a fee charging broker and MortgageMamma was a fee free broker!!!!

AndrewSmith

As I said earlier,

The different business models suit the individual brokers.

The point I am making is that it is wrong to assume that just because the broker charges a fee they will offer better service or a better quality of advice.

Where do you draw the line at this statement? What about adverse brokers who charge fees? Is that a better quality of advice? I think not.

Whichever method works for the individual broker firm is a choice made by the firm themselves, but does not reflect in the experience or quality of advice given.

Andy

MortgageMamma

I used to be a fee broker, now it depends on the individual case and its complexity!

I do agree somewhat with the point you are making Andy, but in turn, I still stand by my original statement that SOME fee's free brokers can get overloaded with work (often timewasters), have reduced conversion rates because of this, and give less than brilliant service. I am not directing this at you personally as I know you give good advice.

Another method I have used lately is to take an upfront deposit from a client for work and rebate it on completion. I do this to protect my own interests, and in my opinion, if a client is prepared to do this it means they are committed to doing business with you and you won't get someone who takes up five hours of your time then decides not to buy the house, leaving you with no remuneration.

AndrewSmith

nmiah786 wrote:

Wow. I thought Andy was a fee charging broker and MortgageMamma was a fee free broker!!!!

Haha :rotfl:

Whatever gave you that idea ?

TangentMan

I would just like to add my usual comment. Don't assume that any single person is giving you the complete picture of all the deals available. A bank certainly will only offer its own products (some banks have referrals system to in house brokers for people whose needs are not met by the high street range - they can then offer from the market as any other broker might).

Independant brokers will offer you more products than a bank sales person, but again not those to which they have no access (i.e. if they are in anyway tied and thus limited or for example the products for a mortgage club to which they do not belong).

Also remember that certain areas of the market thrive on churn (i.e. short term remortgaging).

My personal view is that the term "whole of market" is misleading.

nmiah786

AndrewSmith wrote:

Haha :rotfl:

Whatever gave you that idea ?

Don't know how I got that wrong!!!

To be honest thats what stopped me approaching you for services previously.

Now, I know better.



p.s. Why does the Smilies not work for me!!!!!!!