First time buyer, no clue what I'm doing. Mortgage broker or not?

blizeH

Hi guys,

This afternoon I had a meeting with the estate agent's mortgage broker - he seemed very friendly and helpful (although I guess that's his job, right?) and explained the deals available.

I asked what his fees were; free for the mortgage, but I'd be expected to take out some insurance policies, which life insurance aside (probably cheaper elsewhere), I'm not sure I even want any of them.

Is this common practice? No charges for the mortgage, but you have to take out additional policies, with some lasting the entire length of the mortgage. If I can save £20 or so a month by not taking out these kind of policies I'd like to avoid them really.

Would I be crazy to just cancel this meeting, bypass the guy and sort my own mortgage? I'd probably give him £50 or something as a gesture of good will and to say thanks, but just get on and do my own thing after that?

Many thanks

CloudCuckooLand

Save your £50. He's not done anything for you as a favour, its a sales technique based on the connection with the EA/house sale.

Go to an independant broker and research the deals only available directly with banks.

Don't buy any policies you don't want.

I'd bet there would be some commission paid to him, if he did arrange a mortgage. Just not an up-front fee.

Fire_Fox

Do not use the estate agents mortgage broker and do not use the estate agents solicitor. They are unlikely to be completely impartial, and you should always keep your cards close to you chest when driving a hard bargain on a property. Why on earth would you give this guy £50? He was trying to sell you insurance that you don't want or need!!!!

uk_property_expert

Go and see an independent broker. You do not have to take out anything with this broker. He will get paid by the mortgage company so dont feel obliged.

blizeH

Many thanks guys. Might swerve this one then! Is it worth me saying I'd like to go with him, but don't want to take out any insurance policies and see what he says? Unless he could offer me life insurance for maybe £10p/m or so, that's about the only policy I'd be interested in.

Finding it all a bit overwhelming already unfortunately, but will take a look for local brokers tomorrow if I don't use this one.

Any reason you wouldn't use the estate agents solicitors by the way? I think the lady said it's already in motion, and will cost around £495 which seems about right for solicitors fees.

Thanks again

Running_Horse

Don't even bother with the independent broker. We have banked with the Nationwide for years, and arranged a really good deal directly. Not a deal that will have to be redone a few year from now with an arrangement fee, but something that will last for the whole term of the mortgage.

A few years back Northern Rock were the fashionable destination for commission based brokers. A lot of Northern Rock customers now find themselves unable to negotiate any kind of deal with any other lender once the special rate runs out.

As for EA solicitors, we used them and it was OK, but there are plenty of horror stories on here where it went wrong.

Fire_Fox

blizeH wrote: »

Many thanks guys. Might swerve this one then! Is it worth me saying I'd like to go with him, but don't want to take out any insurance policies and see what he says? Unless he could offer me life insurance for maybe £10p/m or so, that's about the only policy I'd be interested in.

Any reason you wouldn't use the estate agents solicitors by the way? I think the lady said it's already in motion, and will cost around £495 which seems about right for solicitors fees.

Conflict of interests.

Anyone getting regular business from the estate agent has loyalty to them and, remember, the estate agent works for the vendor. You want a solicitor that will advise you to pull out or hold off if there is something wrong with the deeds. The estate agent have no right to [STRIKE]bully you into[/STRIKE] instruct a particular solicitor.

Anyone getting regular business from the estate agent has loyalty to them and, remember, the estate agent works for the vendor. You want a mortgage broker who will NOT be tempted to 'accidentally let slip' what your maximum borrowing capacity is, you may need to renegotiate down after the survey!

blizeH

Many thanks guys - I'm going to send the estate agent an e-mail later saying that I'd definitely prefer not to use the mortgage broker, but the solicitor I'm still a bit unsure of - I appreciate your concerns, like you said if you get someone impartial I'm sure there will be a lot of benefits, but in the same respect I also think maybe there will be slightly less hassle involved if they're directly in contact with the estate agent?

I really have no idea how these things work, the price is £450 for the solicitor fees which apparently are quite reasonable? Plus points and negatives for each though. Definitely decided to get rid of the mortgage broker though, I'm the sort of person who will quite happily spend a lot of time researching savings accouns etc to get the most interest - seems like a lot of the same rules will apply, although it's obviously a much more involved process!

Kyrae

We organised our own mortgage and found it to be pretty easy. Talked to quite a few banks to find out their rates and how much we could borrow (making sure they didn't credit check us so it wouldnt effect our credit report) to give us a good idea of what was a good rate and a bad rate. Then applied directly through the bank, and it was very speedy and a good experience. They offered us their own life insurance etc but it was very expensive compared to quotes we'd recieved online so we declined. If you do want life insurance I can recommend a company called Life Search, just finished arranging life insurance with them and it was lovely and simple and got a good deal. Makes a nice change when the company phones you regularly with updates instead of having to chase them up all the time

laughingcow81

We found our own mortgage, looked up on the internet the kind of FTB deals you can get and ended up going with HSBC. I would strongly advise you to do as much research as possible going into this, especially with regard to mortgages, insurance and solicitors. If only so you know what you're doing, and you feel comfortable with the whole thing.

Our solicitor was recommended by family, who had used her to put through several sales of property, so we were confident she would do the job. I would never use the EA's solicitor, because of the conflict of interests and because I would prefer to make my own choice in who to use.

For life insurance, a quick search on price comparison sites (and on this site too) will bring up what you need to know and can save you a lot of money.

blizeH

Thanks again, really appreciate all of your advice.

With regards to the solicitor, I'm a bit worried if I cancel both the broker and the solicitor that I may annoy the estate agents? I know they get their fee regardless, but I just want things to go as smoothly as possible. So if £450 for a solicitor isn't that bad, would I still be crazy to go with the EA's solicitor? I don't mind arranging something else if it's not an issue and I won't annoy the EA!

With regards to the insurance etc - is that compulsory? Do I really need that kind of thing? My hope and intention is to overpay on the mortgage as much as possible, so every little helps...

Thanks