Can I trust my IFA?

TANZA_2

As some of you might have read, we have had an offer accepted on a house and are now in the process of getting a mortgage. We have been told by an IFA that the best 5 year deal fixed is with either Britannia or Nationwide, both at 6.14%. however, we've found out that Britannia also do a 5 year fix at 5.84%. There's about £200 difference in fees but about £1600 difference in interest paid over 5 years. Also, as my BH is in the police, he is entitled to £150 cashback with Britannia which evens out the difference in fees just about. I can't get in touch with the IFA today but don't know whether to just go through the Britannia direct?
Why didn't he give us the lower interest deal? We've also heard that IFAs don't get commission from Britannia so maybe he doesn't want to push that.
What do you think?

utterbar

If you're sure that the Britannia deal is the best one for you I'd go for it.

dunstonh

Why didn't he give us the lower interest deal?

We havent been present in your discussions so cant answer. You should ask him.

Has he issued the formal documentation yet, such as the KFI and done his research or is it still at the quick and dirty stage where full research hasnt been done yet?

We've also heard that IFAs don't get commission from Britannia so maybe he doesn't want to push that.

So, why has he recommended Britannia at 5.84%?

As an IFA, I dont do mortgages (IFAs are investment advisers although some also act as mortgage advisers as well). However, I often see mailshots and emails and other stuff from mortgage firms which I forward to my mortgage adviser. Britannia do deal with mortgage advisers and have dedicated staff to deal with them.

I would doubt there is any difference in the remuneration in 5.84 or 6.14 as they are just two of their current deals. The same sort of deals with the same lender do not normally alter the commission.

TANZA_2

Thank you for that. I totally got things wrong as I meant mortgage advisor not financial advisor. I was glad to read that mortgage advisors do get commission from Britannia as my BHs mother said she knew for a fact that they don't get commission and that was why our MA didn't push for Britannia. I read that you have to pay valuation with the 5.8% option so maybe that's why. Anyway, I'll ask him tonight. I like him so hope he does get commission. Just to verify, mortgage advisors get commission from Britannia? Would he still get commission if my BH gets the cashback being in the police?

dunstonh

Just to verify, mortgage advisors get commission from Britannia?

I dont know and my mortgage adviser is out. I am just working on the assumption that if they have broker departments (you can see the broker telephone number of their website) and the advertise to brokers then there is probably some remuneration in there. That said, remuneration on mortgages is tiny even when paid. It averages 0.2-0.4% with 0.3% being the most popular. Most brokers make their money on the insurances and not the mortgage itself.

The adviser will tell you if Britannia pay any. At the end of the day he has to justify the recommendation and if a better deal exists with nil commission compared to one with then you go with the nil commission option. This can be your way of testing his trust. Ask the adviser if he doesnt recommend britannia but comes out with a lesser deal. My copy of moneyfacts arrived today and I can see Britannia sitting in there in second place for 5 year fixed and nationwide 5th. So, both are good but Britannia is better.

As I said, i dont do mortgages but i did notice on moneyfacts that Norwich & Peterborough have a 10 year fix at 5.78%. Cheaper than both and no need to fix again in 5 years time saving you what will probably bee £1000 fixed rate fees at that time. Have you thought about going for a longer fix?

TANZA_2

Thanks. I did speak to my MA today and unfortunately he won't do the mortgage and he said Britannia is a good deal but he doesn't deal with Britannia so I guess he wouldn't get commission.
We don't want to do a 10 year fix as we think all being well we would move again before then so don't want to be tied in.
We have to make an appointment with the Britannia and just hope that they will move it along quickly.
Has anyone any experience with Britannia as to how long it takes?