Using multiple brokers to obtain the best mortgage

kenshaz

MortgageMamma wrote:

But you had taken this from ML's moneydiet, which says to instruct a number of fee's free brokers, then take the advice and complete the L & C, so how can you justify the fact you would only complete through L & C because they are fee's free, when in fact you know that ALL the brokers you would instruct using this tactic are fee's free?


Originally Posted by tomstickland
How about using schizophrenic brokers? One broker with multiple mortgage personalities? Much more efficient.





and whats this supposed to mean? who are you attacking now with that statement? It adds no value to the thread and simply lowers the tone to mud slinging.

tomstickland made the above quote ,I cannot speak on his behalf,perhaps he might assist you with an explanation as to it's value and tone to this thread.

In respect to your other comments regarding fees ,please read through thread and the answer will be clear.

AndrewSmith

payless wrote:

I think James does raise a point
---

Personally I like to look at each case on an individual basis , and consider the level of work , how complex, time spent & costs ( such as travelling) for each case. Any rebate is based accordingly. I think that this is effectively moving close to a fee based ( with full comm refund) model ( and not a silly fee based on % rather a flat rate basis) , without actually having to charge ( and then be classed as a fee based broker- as articles such as Martin's don't really make it clear that fee based can actually be a good thing for a client !)

I do this as we all know that on average its not 3 times as hard to process a £300K case as a £100 case, so why should I be paid 3x as much.

I nearly all cases my business is processed on a full advice basis - some do not warrant a rebate , some perhaps I ought to charge a topup fee ( or although I don't- especially as its usually returning clients with smaller mortgages ), others might get a rebate ... and in some cases this can be a lot more than certian other routes that don't give advice.

This model is used across my client base , although if a new enquiry starts with - how much would you rebate , then feel that the client is using me on a "price point" rather than for my services , and that's not really how I like to do business. If my overheads were to rise any more, I would expect to raise the level, whereby less rebates were offered and more cases actually needed a topup fee.

What I tend to do is simply apply the same principle across the board to all cases I deal with.

My average mortgage size is approx £135-160,000, mainly full status prime deals thus affording an average proc fee per case of approx £400-500 per case. Because of the market I work within I very rarely see a mortgage above £200,000 so model my business plan and profit/loss forcasting on the average proc fee of £400-£500.

As we all know with ever increasing regulatory costs, licensing, advertising, PII, insurances, utilities, software, phone bill (which is HUGE), postage etc etc the profit margins in this business are not much different to any other service industry in fact.

For my business to remain in it's viable state I simply could not afford, given my average mortgage amount, to rebate commissions on anything but the very exceptional large cases.

That said, I will still take on a mortgage of, say, £45,000 without charging a top up fee.

I find it all evens out in the long run.

At the end of the day it is of no dis-advantage to the client to not refund part of the procuration fee, as it is a fee paid to the broker by the lender. As such it is money the client would not have received anyway, merely payment for the business introduced.

Each broker will have their own business model depending on business volume, case size, company structure, profit margin expectations etc.

I find the 'keep it simple' approach of no fees and taking the commission works for me.

As with many things in this industry though, there is no right or wrong answer.

AndrewSmith

kenshaz wrote:

Some people in society are vulnerable,they need to be made aware ,your comments about the TV ads proves that ,a high percentage must get sucked in,I trust no -one ,solicitors ,estate agents ,until I have in writing their contract and fees

Which is exactly why a broker has to issue an Initial Disclosure Document clearly stating their remuneration structure, market access and level of advice offered, at the first contact.

Yes I agree that some members of the public are too trusting. Trust is not a god given right and, in my mind, has to be earned and then respected once earned.

Many of these larger 'daytime TV' firms would do well to take that on board.

payless

Each broker will have their own business model depending on business volume, case size, company structure, profit margin expectations etc.

totally agree , and within the parameters that we are discussing , I can't see anything wrong, although of course can't say I agree with firm's model ( thinking of those that advertise of afternoon TV)

payless

That said my average mortgage size is bigger than yours ( although that also includes a few no fee small cases) and also whilst they are also prime cases , my % gross commission is higher.. although partly thats a result of my methods as there are somtimes mortgage products , that whilst attractive with good features - but on straight comparison are not the best, however as they pay higher % broker fee, I use this extra commisison to fund some of my increased rebate to make the deal market beating for the client. ( as I said closer to a true fee based service).. looking outside the box??

kenshaz

MM

kenshaz wrote:

If the small broker charged no fee ,then I would complete via him/her every-time,in preference to L&C,so I take your point

I have no preference for L&C,the statement in Martin's book is guidance ,if other brokers offer the same service and perform the same role ,I am all for a free market.
I just quoted from his book ,it was you and Homer-j who decided to react,

payless

As we all know with ever increasing regulatory costs, licensing, advertising, PII, insurances, utilities, software, phone bill (which is HUGE), postage etc etc the profit margins in this business are not much different to any other service industry in fact.

we also do have different cost bases -
I have no great advertising costs nor introducers to pay , but as an DA I have various other costs ( ARs still pay them, but in a different way)

Whilst I still like to see clients , much can be processed long arm to avoid excssive travel

I have stopped taking indemnity commission on life business... the APR is about 12%

My phone bill is the lowest its been - and that includes providing an 0800 number, - as my outgoing calls are either re-routed or from inclusive minutes on a very cost effective tariff ( cashbacks .... all part of the money saving concept, albeit used long before I came here!) I use o2 contract for all those 0870 numbers to providers

cost savings can then be passed on.

MortgageMamma

kenshaz wrote:

tomstickland made the above quote ,I cannot speak on his behalf,perhaps he might assist you with an explanation as to it's value and tone to this thread.

In respect to your other comments regarding fees ,please read through thread and the answer will be clear.

I know tomstickland well enough to interpret his remark correctly as off the wall alcohol fuelled sarcasm:rolleyes: - what I'm interested in, is YOUR interpretation of that remark and how you felt it was relevant to the topic we are discussing when you posted it? you see to me, and I apologise in advance if I have misinterpreted your intentions, but it seems like an attack on brokers, perhaps AndrewSmith in particular who it now seems is in the line of fire for your hostilities?

kenshaz

I have listened to Andrew's debate and we have capitulated,the whole purpose of debate.I never hold grudges,and what has gone is forgotten ,move on ,I thought you had,just remind Homer -j,he likes to run with the herd and consolidate an observation by other's.

payless

How about using schizophrenic brokers? One broker with multiple mortgage personalities? Much more efficient.

I don't think it exists ..... great idea though !