why would you use an IFA to get a mortgage?

deprivedofsleep

oh boy, my partner and I are on a different planet.

he wants to go through an IFA to get a mortgage and I want us to source one ourselves. he is absolutely adamant that we go through his way and I don't understand why?

can someone shed light? what is so fantastical about a frikkin IFA?!

dunstonh

what is so fantastical about a frikkin IFA?!

Dont know. Most IFAs dont do mortgages and I wouldnt use one and I'm an IFA. Most IFAs now employ or use dedicated mortgage advisers instead. Some still do mortgages but the jack of all trades, master of none approach is largely on its way out.

he wants to go through an IFA to get a mortgage and I want us to source one ourselves. he is absolutely adamant that we go through his way and I don't understand why?

Ask him why. He knows better than us.

Perhaps he prefers having someone do the paperwork. Perhaps he doesnt want to do the research. Perhaps he thinks you are tight on criteria and need the undewriting knowledge a mortgage adviser should have. If he wants an IFA (or IMA) rather than a whole of market adviser then perhaps it is because he wants best value (larger mortgages with big commissions can result in a commission rebate that is larger than the fee).

If its straight forward and a small mortgage and you know what you are doing then maybe you dont need one.

kingstreet

Does he have a specific broker in mind he's used before?

ACG

Why wouldnt you want to use one?

Im a Mortgage Advisor so my view is probably biased (although saying that, if i didnt see a need in my services i wouldnt be doing it).

We have access to the vast majority of deals available - lenders who you will never have heard of, lenders who only deal through advisors as well as the local high street banks/building societies.
Occasionally there are deals which you can only get by going direct to the lender rather than through a broker but the same can be said the other way round too.
That aside, we also do the leg work for you...if your in work can you take calls from the lender, solicitor, estate agents etc?
If things arnt going quickly enough, we can be on the phone nagging them all day and all night to get it moving.

We have account managers at the lenders, we have connections with solicitors, if any hiccups arise (expected or not) we are best placed to get them resolved...and things do go wrong that you were not expecting in a million years.

So based on the fact we can find you a good deal, we will do the leg work for you, take away all of the stresses and keep you updated outside normal working hours, why wouldnt you want to use an advisor?

Dave_Ham

Potentially you could do both and loser can do the dishes for a month!

Seriously, you are likely to receive a load of responses from brokers but we are all pretty honest.

If you are PAYE, decent deposit and credit rating and purchasing small (relative to means) then you can possibly source a good deal.

Whether you can source the best deal to your circumstances is open for debate and depends at what rate you value your own time..

It may be hard to put an example together with impact, but say someone owes you money or has put something libelous on the internet. Why would you employ a solicitor to progress this; the answer is likely to be the same as a mortgage broker - you feel you are likely to get a better outcome as a Solicitor is qualified, insured and knows the marketplace better..!

betmunch

Assuming he means a Mortgage Broker rather than an IFA. Some people need them some people dont.

I think the need to have a good bit of industry knowledge behind you is particularly important on purchases as they are time sensitive.

Currently there is a lot of upheaval in MortgageWorld, lenders are actively trying not to lend, or be top of the comparison tables. A good Mortgage Broker will be able to tell you who is likely to accept your business or not.

Having said that, if you have no existing credit, no kids, no BTL's, are only asking for 2 times your income, and have a decent deposit, then you might be better off going direct.

Personally I would get an Independent Mortgage Advisor who doesnt charge for a fact find to look at your case for you before you make any applications, then you can decide if its worth employing him or not.

Why is it you are so keen not to get professional help?

deprivedofsleep

he can't give me an acceptable answer. he says for example that many lenders will not lend to us as we have no rent history with our current flat which we are going to rent out, but we will divulge the same information to the potential lenders as we would the financial advisor. he also keeps telling me that this advisor will have to report to the FSA, but my understanding is that any lending bank will ask us the same questions and will have the same criteria that we will have to meet as borrowers as set out by the FSA.

as for doing the leg work, well we have to get all the information and documents to the advisor in the first place, so that I don't get. As for being able to nag solicitors and estate agents I think I can do a good job of that!

Plus the advisor has only managed to come back with one quote and only for a certain fixed rate pd. I don't think that's acceptable after holding detailed discussions with them about what we are looking for. Am I wrong in thinking this?

deprivedofsleep

betmunch wrote: »

Assuming he means a Mortgage Broker rather than an IFA

sorry, yes I guess this is what i mean he just refers to them as an IFA, but they deal with mortgages.

Dave_Ham

So maybe the issue is with your current "mortgage broker" rather than the industry as a whole.

You have already stated one thing that potentially could lead you to require some more qualified intervention/support.

Does the flat have a mortgage on it? (the one you want to rent out)

betmunch

deprivedofsleep wrote: »

he can't give me an acceptable answer. he says for example that many lenders will not lend to us as we have no rent history with our current flat which we are going to rent out, but we will divulge the same information to the potential lenders as we would the financial advisor. he also keeps telling me that this advisor will have to report to the FSA, but my understanding is that any lending bank will ask us the same questions and will have the same criteria that we will have to meet as borrowers as set out by the FSA.

as for doing the leg work, well we have to get all the information and documents to the advisor in the first place, so that I don't get. As for being able to nag solicitors and estate agents I think I can do a good job of that!

Plus the advisor has only managed to come back with one quote and only for a certain fixed rate pd. I don't think that's acceptable after holding detailed discussions with them about what we are looking for. Am I wrong in thinking this?

Hes right, many lenders will not accept the let to buy scenario, however, where problems arise will be where they DO accept it, but will reduce the loan available to you, you wont find this out until you have actually applied, so will waste time and money before the lender comes back with "your accepted but at a lower figure" which may not be enough.

I understand you can do they leg work, you actually seem quite keen on doing it to be fair.

I cant comment one what the advisor has come back to you with. In general when I am with my clients I open up the laptop and talk through the deals available and explain why we can/cant use lender xyz. Maybe this advisor works differently to me.

Ultimately only one of you will be happy with what you decide, the most important thing is getting the house surely?

kingstreet

Keeping a property in the background to let and purchasing a new one to live in is less clear than simply looking on moneysupermarket and picking the best rate.

Without knowing more, it's difficult to know what the adviser might have come up with or why.