L&C Brokers - Mortgage Dilemma

Golactico

Here is my dilemma!
I have just submitted a Mortgage application through the Money Saving Expert site's recommended broker, London & Country. It's a Nat West 5 year fixed rate at 4.05%. I have not yet committed to this, so it would cost me nothing to pull out.
Today, out of idle curiosity, I checked the Nat West website and found that basically the same product is available, but if I apply directly to Nat West, the fixed rate will be 3.95%. This would save me about £5 a month or £300 over the 5 year fixed rate period.
I have spoken to London & Country, who took the line that I was better off going through them as I would have to start from scratch going through Nat West directly and that £5 a month 'isn't much for the service I will get from London & Country'.
Is this the no brainer it appears to be? i.e. Cancel L&C application, apply to Nat West direct and save myself £300 over the next 5yrs for the sake of another 1 hour phone call?
Any thoughts appreciated.

TrickyDicky101

I would say it probably depends on

1) being able to halt the current application thru L&C before any underwriting decision is made (ie fees due, credit record affected)

2) whether there is anything about you that makes it likely a good broker will repay your time/money (eg if self-employed, potentially credit problems etc)

If (1) doesn't apply and (2) is not a problem then I would say apply directly. 5 years ago it was a different mortgage market but I got limited benefit from using the broker and I wouldn't bother again unless my circumstances change.

charles_b_2

Have you checked the Maximum LTV (Loan to Value) that the mortgages have. Could be that the Natwest offer is a lower LTV than L&C's.

TMSL

I would be very careful with Natwest as if you cancel the 5 year fixed rate deal with them and it comes with an arrangement fee, you will be liable to pay this, if the deal has no arrangement fee then you should be ok. Natwest are one of the few lenders who charge you the arrangement fee if you pull out of a deal.

dunstonh

Oh my eyes have gone funny. Can you change that font please as its horrible to read. It may also prevent people from responding as they wont bother reading it.

Golactico

All – extremely grateful for your input.

My application is a very straightforward remortgage – both my wife & I are employed & no credit issues. The LTV (about 45%) is not a problem either.
The blurb from L&C explicitly states that the arrangement fee is only chargable and non-refundable after an offer has been made (it hasn’t, the application was only submitted yesterday).

It’s becoming apparent that the only thing at stake is upsetting the nice chap at L&C who I’ve been dealing with. I went with L&C on the basis that they charge no fee, but it seems that if I stick with them, I will effectively be paying them their commission via the extra .01% that I will pay to Nat West. Lesson learned - there really is no such thing as a free lunch.

Burridge60

Has the service provided to you by London and Country been worth paying £5 a month for?

Golactico

Burridge60 wrote: »

Has the service provided to you by London and Country been worth paying £5 a month for?

Although I can't really fault L&C's service, If I'm really honest, the answer to the question would have to be 'No'. I have arrange 3 mortgages in my life without using a broker. The crucial factor is that I contacted L&C as they offer a no-fee service, so I felt that I had nothing to lose by seeing what they could find for me. It turns out that in this particular instance, I do have something to lose - £300 over the life of the fixed term. I really don't like messing people around, but I'd imagine most people in my position would opt to save themselves the £300.

GMS

L&C have not charged you anything. The lender chooses to load the rate for broker introduced business. How would you expect L&C or any other broker to male a living without being paid commission.

It is a simple choice. Walk away from the broker and deal with the application yourself, which may or may not be straightforward, or allow the application to proceed with L&C for the £5 a month difference.

Some people would say £5 mth is cheap for somebody to deal with the whole process for you, some would say save the money and do it yourself.

If a solicitor dealt with a transaction for you there would be no qualms about paying them for the service.

Before you do anything speak to Natwest and see what effect, if any withdrawing and re applying would have. Also consider if Natwest is the best deal for you anyway. Have you researched all direct lenders because L&C would not have done.