Choosing a mortgage broker

krishna

We are trying to arrange a let to buy mortgage. We have spoken with the broker in one of the Estate Agencies (supposedly whole of the market) and to London & Country as well as another independent broker recommended by someone we know who runs an estate agency.

The EA broker came up with deals that were lowish interest rates but enormous fees (around 2k). They also normally charge a fee to arrange the mortgage though when we got up to walk out at that point, they indicated that they would not want to LOOSE the business for the sake of the fee.

London & Country said it wasn't worth doing anything until we had found the place we want to buy. They didn't seem very keen to do any work at this stage, but came up with deals that were lower fees, but higher interest rates.

The broker recommended to us seemed to be the most helpful and talked the most sense. He came up with a range of deals that overall worked out better (lowish interest rates and lower fees, between 500 and 1k). He had indicated that he charged a fee and I had indicated that we didn't feel ready to pay such a fee. I understood from how the discussion went that we would not have to pay the fee in the end, though perhaps he was suggesting that the fee might be negotiable. Anyway in his final email with some suggested deals he indicated that he would want a fee of £250 to broker the mortgage for us.

I know there is a lot on this site about not paying a broker any fees. What do we do? It's difficult to compare the deals offered properly because they independent's quotes were about three weeks after the first lot, at a time
when some of the low fixed rates have been disappearing.

Anyone got any suggestions? We are looking to raise about 100k (possibly 150k) from our existing house (worth around 330k) to put towards purchase of another property and will be letting our existing house. We are in North London.

dunstonh

Think of it as a service from any profession. The cheapest quote is not necessarily the best. In this case you tried 3 places and the cheapest here was L&C and they gave you the worst service.

The first one, it reads, as having the highest fees. The last one you seemd to get on with the most and give you what you wanted. Is that worth £250 to you?

I know there is a lot on this site about not paying a broker any fees. What do we do? It's difficult to compare the deals offered properly because they independent's quotes were about three weeks after the first lot, at a time
when some of the low fixed rates have been disappearing.

I get my milk delivered by a milkman. I know I could get it cheaper but I like the service. The window cleaner does my windows. Doing it myself is cheaper but I like the convenience. The car dealer services my car. I could get that cheaper but I want it done to a standard. We eat Marks and Spencer food. We could get cheaper at Asda but we prefer the quality.

So, there are plenty of things you do in life that could be cheaper. However, is that what you really want. Yes, you could get another broker to do the same deal without that charge. However, is the service important to you and worth the money spent? Only you can decide.

HelpWhereIcan

Just to back up what dunstonh says, while I support the premise that people should obtain fee free advice where possible, you have to be happy with the advice you are getting and the person you are dealing with.

£250 is not a huge fee and it may well be that the broker concerned has found a deal that would save more than £250 compared to the others.

Having said that, there is nothing to say that L&C would not have come up with the same deal (had they been bothered to do the work and/or you had already found a property).

When kenshaz comes along, he will point you to Martin's 'get advice for free article' and advise you to get the advice from the fee free broker and then go to L&C or one of the other fee free nationals to arrange it.

You make your own decision, but I would have to argue that you may end up costing yourself a lot more than £250 if you end up going with someone who does not offer the same service, skills or quality of advice as this guy.

Sometimes you choose on service as well as price.

krishna

Thanks dunstonh and HelpWhereIcan. That's kind of what I was beginning to feel, but thought I'd check what others thought.