Greater mortgage sum from IFA's??

damo101

Hi,
speaking to a friend recently who bought a house in Ireland and he told me that IFA's are the way to go for mortgages. After getting nowhere near enough to buy a house from the bank he went to an IFA and was offered approx 100k more than the bank offered. Obviously the IFA is on commission (1% i think he said) so they will go all out to arrange a mortgage for as high an amount as possible.

My question is, are UK IFA's the same or are FSA regulations pretty tight in the UK for mortgage amounts, regardless of if it's an IFA or bank/building society?

TIA

Damo

herbiesjp

The trick is knowing which lenders will best suit a clients needs.

As long as FSA regulations are adhered to there should be no problems - you should in my opinion talk to a whole of market mortgage adviser (as long as they do not work off a panel) and they will always be in a better position to offer you a mortgage than going to a tied adviser such as those in banks and building societies

HTH

dunstonh

For clarification, the IFA designation does not mean they can do mortgages. Indeed, most the IFAs I know do not transact mortgages. Mortgage advice has it's own FSA designation and whilst IFAs can hold this in addition to being an IFA, it is more commonly held by indepedent/whole of market mortgage advisers.

An adviser is only facilitating the transaction and providing you advice. They are not lending you the money. They will search the market to find you the most appropriate deal and they will also have deals available which you cannot get through the branch network of that lender.

Whilst commission is paid to the adviser, this is really no different to walking into a bank and getting the mortgage there as they get to keep the money (to pay their staff). Some advisers will charge fees in place of commission and some busy advisers will charge fees as well as keep commission.

Experienced mortgage advisers could not only get you a better deal but could get you better lending multiples than doing it yourself. Plus they do the paperwork and chasing on your behalf.

damo101

cool, thanks for that guys, that's what I was thinking.

D.

TangentMan

Brokers don't necessarily offer you more money than a bank. At the end of the day it is a bank (or similar) lending the money, not the broker - theya re just brokering the deal.

You didn't post any of the details of your friend, but being lent an extra 100k seems like quite a lot to me (if we assume an average loan about is sub 200k), even if you halve it for Euros.

Your friend's broker my have found a self cert lender, etc. That's great if it matches his circumstance but remember you have to pay the loan back, regardless of what people will lend you.

dunstonh

Brokers don't necessarily offer you more money than a bank.

That's not what we are saying. However, if you go to a bank, you will be offered certain terms that may or may not be enough for you. If you go to a whole of market mortgage adviser the terms available through them for that same lender may be better or another lender may be more appropriate.

I mentioned this once before recently but a certain high street bank that sells one brand of mortgage through three different retail outlets had different lending criteria and discretions across each of the retail outlets. Different branches of the same bank also had different limits as well.

TangentMan

I see your point. I wasn't particularly blowing the trumpet of banks or brokers, i was more nervous about the idea of simply going where you can get more money. As opposed to get what is right for your circumstances which are not the same thing.

I was trying to illustrate that by going to an IFA the poster's friend may have arrived at a more "off piste" lender who will lend more money and probably charge a higher rate so the approach of "brokers give you more money" is something to be a little wary of.