Mortgage Broker or Bank

Labmoore

My partner and I applied for a mortgage last year with a 5% deposit through a broker. Despite having a small default on my credit report of less than £50 he was very confident we would get a mortgage...we were turned down. Afterwards he said it was because my partner had used Wonga type loans a few years ago.

We are both professionals and collectively earn approx 80k before tax. We have gone away saved up a 10% deposit and buying a home that is undervalued by approximately 40k. Do we go back to a broker or our building society (nationwide)who we both bank with and like? We also use their help to buy isa. We are so confused as to what is going to give us the better option. Any advice would be hugely appreciated.

MortgageMamma

Broker, but obviously I'm biased.


Did the broker not ask for a copy of your credit report before the application? I always insist on one as I don't like applying blind without seeing a report. Saves little hiccups. Still, hiccups do happen and the advantage of using a broker is:


1. Full advice and recommendation tailored to your circumstances
2. Can ensure you have the most competitive deal for your circumstances with a lenders whose criteria matches your circumstances
3. If something goes wrong broker can a) troubleshoot b) appeal the decision c) make an application to another lender quickly without requiring another appointment with you
4. Can ensure your transaction progresses quickly - doing all the pushing, chasing etc.


A competent broker will always be the better choice over going direct to a lender - none of us are perfect but most of us will go the extra mile and your chances of success are therefore higher.

amnblog

You will not be going back to the original broker, but are not confident to go direct to Nationwide - why?

Is it because you don't want a rejection from Nationwide on your file?

Should you want to minimise that risk, you do need another Broker.

ACG

10% deposit is in the high risk catagory for lenders.
Added to that a default and pay day loans - its not a great combination, although presumably they are all fairly history.

The undervalued purchase will not improve your score as lenders use the lower of the valuation or the purchase price. The exception to that could be if you are buying from a relative.

Obviously I am biased too, but I am not on this forum to drum up business. I would say using a good broker will help you no end. That may be the previous broker or a new one, just avoid corporate estate agency brokers.

Goldiegirl

Completely unbiased here, as I'm not, and never have been a broker.

But I'd also suggest a broker in your situation.

Also, people find it more convenient to let the broker do all the legwork, as these days, it can be a real pain to contact the lender by phone, or getting them to reply to emails.

dunstonh

I'm not a mortgage broker. Although I do employ them.

Your scenario does seem to suggest a broker would be better as they can look at lenders that fit your situation and speak with lenders before submitting a case to see how they feel about it.

Daniel86

A lot of reasons to use brokers here, can someone tell me the reasons NOT to use a broker? If you don't mind me asking. I'll be looking for my first mortgage soon, so curious.

dunstonh

Daniel86 wrote: »

A lot of reasons to use brokers here, can someone tell me the reasons NOT to use a broker? If you don't mind me asking. I'll be looking for my first mortgage soon, so curious.

Most mortgages in the UK are done by brokers.

There are a small number of lenders that dont retail via brokers (HSBC group being the main one). So, if you want HSBC, then you wouldnt use a broker.

People tend to use brokers as it saves them time researching and no need to go to a branch for an interview. However, if you dont mind doing that yourself and you think you can do a good job of it and you know your case is straightforward then you can DIY.

JimmyTheWig

Daniel86 wrote: »

A lot of reasons to use brokers here, can someone tell me the reasons NOT to use a broker? If you don't mind me asking. I'll be looking for my first mortgage soon, so curious.

1. A broker needs to be paid.
2. We used a broker recently (to be fair, it was, against conventional wisdom on these boards, an estate agent broker) and had problems when we feel that he wasn't chasing the application enough and the lender wouldn't talk directly to us as we'd used a broker.

But unless you know exactly what you're doing, I'd say a broker is worthwhile. In the OP's case it sounds like this is the case.

denk15

Well I've never used a broker before so can't comment on them


But I have applied for a mortgage with Nationwide direct, and know that if your main current account is with them you have access to special mortgage rates
(Don't know if you would still get those if you went through broker but thought I'd bring it up)

Also, if you have your HTB ISA wit them you have access to their save to buy range of mortgages, which again give you special rates (And again, don't know if you can still get these if you go through a broker)

amnblog

Daniel86 wrote: »

A lot of reasons to use brokers here, can someone tell me the reasons NOT to use a broker? If you don't mind me asking. I'll be looking for my first mortgage soon, so curious.

If you have time to waste.


If you like poor service.


If you don't mind frustration.


If you value trusting to luck.


If you are happy to risk trashing your credit file?


If you don't mind applying twice?


If you are happy to risk losing the property because you are too slow?