why brokers?

myright

Why do people use brokers? Is it better to go straight to the bank to avoid broker fees?

I'm not knocking any brokers. Just wanted to know advantages and disadvantages?

Browntoa

if you have non standard earnings or adverse credit etc


not everyone can fit the off the peg applications


they may be tied to one companies products though

GoldenShadow

I went via a broker because whilst we both work full time, I'm on a grad scheme so have been in the job less than a year and it's a fixed term (2.5 year) contract. Far easier for someone to figure out what our best options were on my behalf.

My broker is getting paid directly by our lender, we don't give him anything. Some lenders don't pay brokers like that but our best fit turned out to.

He also gives advice/quotes re life insurance, critical illness cover and the like.

We went with Natwest, they count my uni degree as relevant experience so are happy I had been in post less than one year. We are borrowing 90% LTV and on a 3.73% five year fix. Natwest aren't the most competitive but we are very happy with what we've got. Broker also advised that of our other options Natwest's SVR tends to be lower than that of the others. And as I said, cost to us was nil.

myright

Thanks so much. That sounds good^

My next question is once your five years of fixed rate is over. What's next? If you want to change lenders does it cost to do so from Nat weather? Also for the fixed term did you pay an arrangement fee?

ACG

There are a few reasons why you would use a broker, thats not to say you have to use a broker in those circumstances.

- Not quite "vanilla" - ie you have adverse credit, your income is not just a basic, you have a large amount of credit commitments, affordbility is tight.
- You want your hand holding. What will happen and when.
-You want someone to do the work for you, trying to do it between 9-5 when your in work or having to call a call centre after 8 hours in work is not ideal.

After your deal is up you have 3 options:
- Go to the lenders Standard rate and do nothing,
- Ask your current lender what options they have available to you,
- Find a new lender to remortgage to. This can either be through a broker or you can do it yourself.

Arrangement fees vary, if the mortgage is below a certain amount its usually better to pay a higher rate and no fee. Its up to you to do the sums though or your broker.

dunstonh

Brokers are better at hand holding through the process.
Brokers are typically whole of market (not single tied) for mortgages (unlike the bank).
Brokers do have access to deals that your bank will (although some banks do have own in-house deals too).

So, its much like any job where you decide to either DIY or use someone. If you DIY well, then all it costs you is extra time. If you DIY badly, then it can cost you more in money.

benjus

Even if you have no difficult aspects to your case, using a broker is definitely convenient. There can be a long wait to see a mortgage adviser in a bank (and you could then find out the product you wanted to apply for is not suitable because of something you hadn't spotted, and you may actually be better off with a different bank), and you will need to make time for it during working hours. Brokers, on the other hand, will often be able to visit you at home in the evenings or at the weekend.

myright

Yes all the points above make great sense and I can see why a broker has advantages in terms of helping u through the process.

So my next question is. When a broker finds you a deal are the deals the same as what are available to the public? Does the broker charge a higher interest rate?

Also let's say affordability was an issue or adverse credit file therefore lenders don't lend directly. How do brokers overcome this? Especially if the broker is going through the same lender?

Finally when your deal is over for example 5years fixed. To move to a new lender , does the former lender charge exit fees?

libf

myright wrote: »

Yes all the points above make great sense and I can see why a broker has advantages in terms of helping u through the process.

So my next question is. When a broker finds you a deal are the deals the same as what are available to the public? Does the broker charge a higher interest rate?

Some deals are broker only, some deals are direct only, most are available either direst or through a broker. The broker gets payment either from you directly as a lump sum, or from the lender as a referral fee, or both.

Also let's say affordability was an issue or adverse credit file therefore lenders don't lend directly. How do brokers overcome this? Especially if the broker is going through the same lender?

Different lenders have different affordability criteria, will accept different credit issues and have different policies on employment. The broker knows this and so can direct the application to the lender which is most likely to accept under the circumstances of the client.

Finally when your deal is over for example 5years fixed. To move to a new lender , does the former lender charge exit fees?

Depends on the lender and whether or not you're within a few years of your mortgage ending.

See above answers.

*Kat*

We only used a broker because it was a new build house, next time we wont though.

Liverlad67

I used a broker because of adverse credit including a satisfied ccj. Thought would have problems. But my broker found a brilliant deal with high street rates even with ccj. Small price to pay for their services. Takes away the will they won't they lend me worry. Plus they hold your hand through the process and are obtainable more easily if you have questions