Friend+Gf applying for m.gage- what %?

bob_dob

Thank you for that.
Some more questions if that's ok:

1, if a couple have put the same amount in for a deposit, say 50/50, does it matter whether it's tennants in common or joint tennants?
2, If a broker gives them free advice on who offers the best perdentage rate, say 4.5%, but then says the couple can pay him a fee when they sort the mortgage out OR he can get paid on the commission, then how does he make his money without the percentage rising? Ie- how can he offer them the specific rate and then say they can choose to pay a fee of 0.5% of the mortgage (£500) or let him get paid commission but the percentage of, say 4.5%, stay the same?

bob_dob

Hello, anyone?

bob_dob

Can anyone answer this please?

betmunch

Hi Bob Dob.
1. In my mind it only matters when/if they split up or one of them dies. But this is more on the legal side of house buying so I would check with a solicitor.
2.I'm not sure I understand the question. The broker can be paid by the client or by the lender. An independent Broker will give the client the choice. The Broker will also say when he needs paying. Some will say on application, some will say on completion. I have even heard of Brokers making several smaller charges along the course of the process to cover their expenses for visits, time, advice, etc. As I understand it the Broker can pretty much charge what they want when they want (after the IDD has been given) but the must explain the charges to the client and the client can then say they accept. (or not accept if the charges are too high). I believe its best to keep this bit simple.

Also, no broker will give advice, THEN tell the client what they are going to pay!

bob_dob

Thank you that excellent post.

Regarding my second question, apologies for not making sense.
What im trying to ask is that IF the client chose the obvious choice of choosing for the IFA to be paid by the lender, surely the client must be losing out in some way as opposed to paying the fee?
Otherwise 100% of the clients would always choose for the lender to pay the IFA?
Why on earth would any client choose to pay the fee? (incidentally, it is 0.5% of the total loan amount, in this case)

Also, do all lenders pay the IFAs? And if not, by choosing to pay the fee yourself, are you 'opening up' the market?

Conrad

bob_dob wrote: »

Thank you.
Yes i totally agree. Although i believe they are going to see an IFA and not specifically a mortgage broker. Can an IFA do both?

Regarding the interest rate, that's what i was trying to get a rough guide at using the criteria i mentioned you see.

WARNING - MAKE SURE THEY CHECK OUT DIRECT DEALS WHICH BROKERS CANNOT ACCESS. Some of the lenders that do not accept broker introductions are;

Co - OP
Direct Line
First Direct
HSBC

And others.

betmunch

Nope, not all Mortgage Lenders pay the Broker, Conrad mentions a few above. For a Mortgage Broker to recommend a product from one of these lenders they will need to be paid by someone else, so the client will have to pay.

being independent means that the client has the option to pay the fee, if they choose to pay the fee then all lenders should be considered. If they choose to have the lender pay the fee then the broker is likely (but not definately) to only consider the lenders that do pay commission. Once again it should all be explained at the beginning of the first meeting. If you are not happy with the terms you go elsewhere.

bob_dob

Wow!!
Thank you so much you two. THAT is the sort of advice that could save couples thousands!!

As it happens, my good friend and his lovely girlfriend's IFA quoted them a mortgage of £105,000 over 30 years at 4.2% from Northern Rock and, i think, Natwest or Nationwide. They have a deposit of £15,000.

I hope they do try those others you suggested. And more. I will pass it on.

Thank you so much once again.

betmunch

Hmmmmm, thats interesting.

If your figures are correct, none of those lenders have a product around 4.2%

bob_dob

Hmmmmm......you mean they offer lower? Or higher?