FTB meeting mortgage broker later today - what should I ask?

Eponym

Hi all,

I'm a FTB and have a meeting booked with a mortgage broker at 5pm today. The brokers are independent, whole of market and fee-free (they're paid by commission).

I know a few things we need to discuss:

My salary, affordability and job security
My deposit amount and expected purchase amount
Repayment or interest only
Variable rate or fixed rate
Mortgage term

I know roughly what I want (repayment, fixed rate for at least 3 years, probably a 30 year term). Is there anything else I should talk to them amount?

Thanks in advance!:beer:

Mallotum_X

If they are paid by commission they are not necessarily independent.

Check they truly are whole or market - ask if they exclude any providers.

Also ask them to provide commission estimates on the products they recommend.

Generally you will get better advice by paying for it, and ensuring any commission is deducted from what you pay for the advice.

If you know what you want, why not do the searches online yourself and see what products are available.

kingstreet

You have two options with broker advice;-

"whole market for commission-paying products", where the broker will consider lenders and products which pay a commission. You may be required to pay a fee on top of any commission

or

"independent mortgage advice" where you pay a fee, the broker considers all lenders/products, including those only available by going direct. If you take a commission paying product, the broker rebates the commission to subsidise the fee you've agreed.

The typical commission rate is 0.3% to 0.35%, so in the south east, brokers may have more scope to offer a "fee-free" whole of market service, as the commission levels will be higher due to larger mortgages.

Here in the Midlands, especially in affordable housing, such as shared ownership, the lower mortgage amounts could mean a fee to pay on top of commission. For example, I look after a housing association where the mortgage values are around £70,000. We charge a £249 fee to supplement the commission which is around £210.

If choosing a whole market broker, remember to research direct products/lenders yourself.

Eponym

Mallotum_X wrote: »

If they are paid by commission they are not necessarily independent.

Check they truly are whole or market - ask if they exclude any providers.

Also ask them to provide commission estimates on the products they recommend.

Generally you will get better advice by paying for it, and ensuring any commission is deducted from what you pay for the advice.

If you know what you want, why not do the searches online yourself and see what products are available.

Thanks for your thoughts.

I will definitely be checking their recommendations online myself to make sure it truly is the best option, but one of the advantages of using them is that they will do all the form-filling and so on without charging me for it.

Their website claims they are whole of market but I'll check at the meeting.

Eponym

kingstreet wrote: »

You have two options with broker advice;-

"whole market for commission-paying products", where the broker will consider lenders and products which pay a commission. You may be required to pay a fee on top of any commission

or

"independent mortgage advice" where you pay a fee, the broker considers all lenders/products, including those only available by going direct. If you take a commission paying product, the broker rebates the commission to subsidise the fee you've agreed.

The typical commission rate is 0.3% to 0.35%, so in the south east, brokers may have more scope to offer a "fee-free" whole of market service, as the commission levels will be higher due to larger mortgages.

Here in the Midlands, especially in affordable housing, such as shared ownership, the lower mortgage amounts could mean a fee to pay on top of commission. For example, I look after a housing association where the mortgage values are around £70,000. We charge a £249 fee to supplement the commission which is around £210.

If choosing a whole market broker, remember to research direct products/lenders yourself.

Thanks Kingstreet. I'm looking for a 25% deposit on a property value £120,000-£125,000, so the mortgage will only be about £90,000. I am in the West Midlands so your comment about there possibly being an extra fee is interesting. We do have a family friend who is a mortgage broker. Apparently he would charge around £400 so a free option was attractive - I will need all the money I have for furnishings and so on!

Here's some of the blurb from their website showing what they say about being whole of market, fee free etc:

Why choose us

We’re on your side

We don’t have a vested interest in any lender or any mortgage option. The only thing we care about is helping you find and arrange the right deal.
Our advice isn’t restricted

Unlike others, we give full and “whole-of-market” advice. We’re directly authorised by the FSA, which means we’re responsible for the advice we give.
We don’t charge a fee

We operate on commission, so there’s no fee.

eddddy

Perhaps I'm a bit of a pessimist, but a good additional question to ask is "How much of the mortgage product fees do I lose if I apply for a mortgage and then the purchase falls through?".

It's a long time since I applied for a mortgage, but I believe that rules on refunding or transferring fees vary by lender/broker.

From your comments, it sounds like you have a tight budget, so it may be good to know your exposure if things don't go right first time. (And ask your solicitor the same question.)

kingstreet

Eponym wrote: »

Why choose us

We’re on your side

We don’t have a vested interest in any lender or any mortgage option. The only thing we care about is helping you find and arrange the right deal.
Our advice isn’t restricted

Unlike others, we give full and “whole-of-market” advice. We’re directly authorised by the FSA, which means we’re responsible for the advice we give.
We don’t charge a fee

We operate on commission, so there’s no fee.

This is one of the laughs around the definition of "whole market."

If you ask them if they can advise and recommend on Yorkshire BS, HSBC, Post Office etc, they will say no, such lenders don't accept business from brokers and they don't pay commission.

So I'd argue that the definition should be "whole market for commission paying products" as they plainly won't recommend one that doesn't!

Make sure you are given the firms "Initial Disclosure Document" at the outset. It has the "key facts" logo and in sections 2 and 4 it will show their "whole market" and "fee-free" status, subject to what I said about only recommending commission paying products, of course.

Eponym

eddddy wrote: »

Perhaps I'm a bit of a pessimist, but a good additional question to ask is "How much of the mortgage product fees do I lose if I apply for a mortgage and then the purchase falls through?".

It's a long time since I applied for a mortgage, but I believe that rules on refunding or transferring fees vary by lender/broker.

From your comments, it sounds like you have a tight budget, so it may be good to know your exposure if things don't go right first time. (And ask your solicitor the same question.)

Thanks. I have budgeted £6000 to cover all fees so should have enough if the first house falls through. Any left over will be used for furnishings and decorating.

I'll ask that, it's a good point.


I've now had the meeting - I feel it went well and clarified some things for me. Thanks all for your help!