Do i have to use their broker/solicitor?

dellwear

We've found a new build that we really love. It's on the HomeBuy direct shared equity scheme and due to this is affordable for us. :j

We've been and negotiated with them on throwing in carpets and things and have paid them £100 this weekend to take the property of the market and start the ball rolling.

During our conversation with the guy at the sales office he put us on the phone to their mortgage brokers.

She took some details to work out if the price (£118,000 on the scheme, full price £169,950) was affordable to us. We knew it was because we'd checked this out before going.

Once she took the details of our deposit (£6k) and out credit commitments (£109 a month on the car) I asked her the question "are you whole of market" "can you search all lenders or are you looking at only a panel of lenders". She said they were whole of market, but only 3 lenders were able to offer mortgages on the scheme. She said Nationwide, RBS and another I can't remember.

Now I've looked online again at the Home Buy scheme and the literature on the net says that most high street lenders will offer you a mortgage - are they pulling a fast one?

The guy at the builders was really pushing their brokers (for obvious reasons I guess) and solicitor but I have a bad feeling about them. He kept on saying that they know the scheme best and will guide us through better than any others but I don't want to be paying through the nose for his kick back. :mad:

I've phone London and County for a quote but am I right in thinking I can use any broker if I want? Is there really a good reason to go with their broker?

Being our first house I really don't want to get screwed over!

Any thought from the professionals or more experienced of you?

Muhasib

Things may have changed very recently but at the end of 2009 it was only RBS, HBOS and Nationwide that offered mortgages on Homebuy Direct so they are not 'pulling a fast one' there with you. As a result there may not be that large a range of mortgages offered to you and all the providers were asking for at least 5% deposit at the time also.

dunstonh

General rule of thumb is to never use estate agent brokers and builders brokers. They have a really poor reputation.

MortgageMamma

Unless you were a good estate agent broker like I was lol. Best of luck with your purchase, I'd suggest you agree to see the suggested broker and also see someone else of your own choice then make your own mind up who you want to do the business with,.

MM

Senior_Paper_Monitor

Here's what we tell clients about estate agents .....

We regularly have clients advise us that the estate agents for the property are ‘pressurising’ that “unless you use their broker you may not be able to get the property”- we have no problem with you seeing anyone you wish, BUT it is not legal to ‘make you do so’, nor to indicate that it will ‘impact on your ability to buy the property ifyou do not’.

Additionally, extra ‘credit checks’ / ‘Decisions in Principal’ may adversely affect your credit rating:

You may find the following extract useful:

Extract from The Property Ombudsman Code of Practice for Residential Sales (as of 22.02.10)

· as recognized by the National Association of Estate Agents (NAEA)

· as approved by the Office of Fair Trading under its Consumer Codes and Approval Scheme


6. Submission of Offers

6a By law, you must tell sellers as soon as it is reasonablypossible about all offers that you receive at any time until contracts have been exchanged (in Scotland, missives have been concluded) unless the offer is an amount or type which the seller has specifically instructed you, in writing, not to pass on. You must confirm each offer in writing to the seller, and to the buyer who made it, within two working days.

6b You must keep written or computerised record of all offers your receive – including the date and time of such offers – and the seller’s response. Such records should be made promptly.

Discrimination

6c By law you must not discriminate, or threaten to discriminate, against a prospective buyer of the seller’s property because that person declines to accept that you will (directly or indirectly) provide services to them. Discrimination includes – but is not limited to – the following:

· Failing to tell the seller of an offer to buy the property.

· Telling the seller of an offer less quickly than other offers you have received.

· Misrepresenting the nature of the offer or that of rival offers.

· Giving details of properties for sale first to those who have indicated they are prepared to let you provide services to them.

· Making it a condition that the person wanting to buy the property must use any other service provided byyou or anyone else.

...... the rules for builder/developer/vendors are somewaht different (I'm currently checking into this)

Dan_1976

You can use who you like. I know that most shared ownership and homebuy schemes use a broker to check affordability which is fine to check your elegible. But they also get money etc if you use them.

Make your own mind up, but as said above you have limited choices anyhow.

Kyrae

From experience I wouldn't recommend using the builder's broker. We did this, the company was called New Home mortgages. They entered incorrect information on our insurance application, over the phone said we had plenty of options and quoted some good rates then when we met their advisor in person it turns out they hadn't put the right information in and those rates weren't available to us, then after agreeing to a meeting with an advisor in our home, he turned up with a key facts document that said we had to pay a £99 fee if we wanted him to make a mortgage application on our behalf, plus a £250 fee when the mortgage is approved unless we got life insurance through them. None of which was told to us over the phone. We ended up paying the £99 fee, had our mortgage application refused without explanation, then politely told them we no longer required their help.... applied for a mortgage direct with a different bank and were approved with no problems

That said... other mortgage brokers recommended by builders might be better, and no harm in meeting with them and listening to their advice as long as they don't charge a fee

herbiesjp

Simple answer has been stated by Dan - they have to check your affordability, but then after that you can use whoever you want.

Again, mortgage choice is limited with these schemes, so make sure you get the best of the bunch.