Broker fee - what for?

Zoetoes

Hi

I got in touch with a broker as I was expecting some difficulty in being accepted for a mortgage and thought it best for a broker to find the best lender to fit as my credit file isn't tip top. Although I am borrowing only half the value of the house.

He tried a lender that he said accepts defaults or ccj's for up to £500, but I was declined.

He then tried Halifax (who I already had an appointment with on Monday) and they have agreed in principle, is it often that they agree in principle and then decline at full application?

Also, has the broker found me something that I could not have got myself in the branch? Would he have access to deals I would not? I need to justify paying him a fee.

If he hasn't done anything I couldn't do myself, can I turn him down and still go to Halifax myself or will it come up that there is already an application in and he will be payable as he 'found' me the deal?

Also, are their website mortgages just a guide and they individualise the rate and fee depending on circumstances?

Sorry for waffling! Any advice would be appreciated.

ACG

Brokers may have different rates to the high street (but i think in general they are typically the same).

Halifax do not price to risk, they have rates available and you either hit the criteria or you dont.

With regards to the broker fee, it doesnt just cover him finding you a deal. It covers them doing the leg work for you... if you dont need/want that then fine probably would be cheaper to go direct.

Zoetoes

ACG wrote: »

Brokers may have different rates to the high street (but i think in general they are typically the same).

Halifax do not price to risk, they have rates available and you either hit the criteria or you dont.

With regards to the broker fee, it doesnt just cover him finding you a deal. It covers them doing the leg work for you... if you dont need/want that then fine probably would be cheaper to go direct.

Thanks.

The deal is 2.79% and a £315 fee to Halifax, the website has got better deals as far as I can see unless I'm missing something (I'm not clued up on mortgages!).

Broker fee is £399 which I'm happy to pay if he is making a difference for me but not if I can just walk in Halifax and do the same thing.

Is it too late for me to go to Halifax direct now he has done the agreement in principle?

The most important thing is that I get a mortgage, if Halifax decline at full application I suppose the broker can look elsewhere for me as the fee is only payable on mortgage acceptance.

Zoetoes

You managed 3

ACG

A DIP is just in principle, you can go to halifax again and do your own if you like.

He may have taken away certain deals for one reason or another - fees, LTV, criteria etc etc.

As i say, the fee doesnt just cover the deal. If something does go wrong or you have a complicated situation that £400 is a bargain as the "advisors" in branch are not the best. There is a post on here where a broker had a deal accepted with halifax but their in branch staff couldnt get it agreed... Take from that what you will.

besti

Have you signed a fee agreement with him? If you have. at what stage is the fee payable.

Zoetoes

ACG wrote: »

A DIP is just in principle, you can go to halifax again and do your own if you like.

He may have taken away certain deals for one reason or another - fees, LTV, criteria etc etc.

As i say, the fee doesnt just cover the deal. If something does go wrong or you have a complicated situation that £400 is a bargain as the "advisors" in branch are not the best. There is a post on here where a broker had a deal accepted with halifax but their in branch staff couldnt get it agreed... Take from that what you will.

Thanks.

I just wanted to get advice in case the fee was OTT, this would be my first mortgage so not sure what the going rate is. I'll get him to go ahead and see if it is accepted fully.

Zoetoes

besti wrote: »

Have you signed a fee agreement with him? If you have. at what stage is the fee payable.

No, it was literally a phone call last night then he sent me an email with the illustration. The fee is payable once the mortgage is all gone through.

ACG

Without knowing the full details i couldnt say whether it is fair but it certainly doesnt sound like hes ripping you off... those guys would have an extra 0 on the end of the £400.

You may not need it, im not trying to convince you that you do. Im just saying a good broker comes into their own if/when the wheels fall off.