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

betmunch

No worries

bob_dob

Hi,
Well Nationwide turned down my friend and his gf because of her one year contract with her employers.
Probably why HSBC did too? Speculation, i suppose.

They are now going to go back to the original IFA who they dealt with (who upped his fee from the advertised 0.5% to 1% without explaining why).

The huge issue between my friend and his gf is she wants to pay commission and he wants to pay a fee for the advice/search given by any IFA/Broker.

Is it really the case that paying a fee is better long-term than commission?
And am i incorrect in thinking that IFAs will be banned from being paid the commission route from end of 2012?

betmunch

I would be inclined to find a different Broker to be honest, one who specialises in Mortgages due to the numerous issues they are experiencing. Also, one that doesnt change the goalposts half way through.

Paying a fee eliminates commission bias and allows an advisor to consider non-commission paying deals. Whether its better or not long term depends on who has the market leading products in future, currently there are a lot of very good direct only deals so paying a fee is better. pre 2007 I believe the best deals were almost only through brokers and not direct. I dont think its possible to say conclusively, especially without knowledge of what the fee would be and what the commission paying lenders offer.

There are changes coming, I dont believe the commission route will be closed, but anything is possible I spose. I just wait for my network to say something is changing and then change it. Since the credit crunch the changes are coming all to regularly be it lenders, FSA, networks, etc