Mortgage Brokers

Boygor

Hi all,

I'm hoping to be a first time buyer soon. I've got a (likely silly) question about mortgage brokers. I think I'm going to need to use one as I am fairly clueless about mortgages and the whole process. Due to a sudden change in circumstances I am also on what may be considered to be a tight schedule (2 months) so I'm going to have to learn everything in a big hurry! Nothing like a challenge though

To get advice on mortgages... how much does it cost? Can I just make an appointment with a broker and have a non-committal (free) chat with one about the options available?

If the result of the discussion is satisfactory, do you have to retain their services (for a fee) or do they claim their costs through some other process?

dunstonh

To get advice on mortgages... how much does it cost?

Like any job, you are going to get some that charge reasonably and some that charge massively.

Can I just make an appointment with a broker and have a non-committal (free) chat with one about the options available?

Usually the first appointment is free but it is limited to background info. Gives you a chance to see if you like the adviser or not and if they feel they can offer you their services.

Most mortgage brokers charge £0 to £500. The zero option tends to be in areas where house values are high and the commission covers it.

Boygor

Thansk for the quick response! That's what I was expecting to be honest. I'm going to be trying for a 95% mortgage so I'm really needing the broker, more than anything, to tell me if this is going to be viable or not.

Perhaps I should just ask the question here? Are 95% morrtgages possible in this day and age (say £150,000 property with £7500 deposit)?

ACG

Brokers vary, some charge a fee and get commission, others charge a fee and refund the commission and others take commission only. Fees can vary from around £250- £2500 or more.

Most brokers will have an initial chat free of charge, they want to know if they can place it just as much as you without wanting to waste anyones time.

95% mortgages are achievable. It depends on the circumstances but yes they can be obtained.

goodwithsaving

May I just chip in......depending upon what the change in circumstances is (job loss, paycut?), are you sure a 95% mortgage is sensible?

Boygor

Oh it's not a job loss or a paycut It's my current landlord asking for his house back with very little notice.

We've actually had recent pay rises (and are possibly on course to ecure another). Financially we are in a good position (I think) aside from only having a 5% mortgage.

AndyBSG

First thing, there are two different types of mortgage broker.

Ones who are 'independant' and ones who are tied to certain mortgage providers.

So, Broker A may be cheaper but he may well be restricted to offering you mortgages from just one banking group(such as RBS and its related banks). In the long run this means he may not find you the best deal.

Broker B on the other hand may charge more but is independent so will genuinely try to find you the best mortgage out there.

Type B is known as a whole of market broker and it's important you make sure your broker is one of these.

As for paying, generally you can have a quick chat with them and that'll be free but once they start actually searching for mortgages you will then have some form of contract stating when you pay and how much.

Some brokers will take a commission others will take a flat fee. Some will also have their fee added to the mortgage itself so if you buy a 100,000 property you may find you get a mortgage for 100,500 as they are paid that way. I generally prefer to pay up front so i'm not charged interest on the broker fee but if money is tight that may be an option.

A good whole of market broker is really worth every penny but a bad broker can end up delaying the whole process and costing you a lot more money if they pick a bad mortgage so make sure to do a bit of research first.

Boygor

That's really interesting about adding the broker fee to the mortgage... If I managed to find a house below the £150,000 limit that I've set myself then that would potentially make sense (as money is indeed tight - all money for the next month will be going towards a deposit. I'd be able to scrape together another £500 by the end of SEP with no issues though).

I'm going to get an agreement in principle through my bank to see whether what I am doing is viable and take some advice from them in thefirst instance. I've banked with them all my life so it should be a faster process to get the provisional nod from them (or not).

nkkingston

Two months is a short period of time to go from zero to homeowner. Do you have a contigency plan for if it takes two months and a day? Three months? Six months? It could take you more than two months to get approved for a mortgage (especially with a 95% mortgage - they're going to go through everything with a fine toothed comb), let alone sort surveys and negotiate over price, and you need a vendor who's ready and willing to move quickly too. Heck, it took us six months just to find a house we liked, and then another five from offer to completion. The vendors just weren't as ready to move as they'd implied they were, and kept us hanging.

Also, considering money is so tight, have you taken into account solicitors' fees, survey costs, insurance and the rest? That's another couple of grand on top of your deposit.

amnblog

I am not sure adding a broker fee to the mortgage is still prevalent in the market. We would certainly not do it.


Expect to pay broker fees via debit card or credit card.

hutman

On average how much would you expect to pay a broker for a lending ~250k in London location. I've been quoted £1000

Thanks