My conversation with a mortgage broker??!!/pitfalls of their software

hollydays

Confused,please tell me what was going on here!
Used a much recommended Whole of market Mortgage Broker.
Initially we we were considering a tracker,,and some quotes were put forward for us.At a later stage we decided we needed a fixed rate.I let them know ,and believe I may also have mentioned a 2 year fixed with the Nationwide had been mentioned.

They rang me back today and quoted an interest rate and a monthly amount.

me " There is another 2 year fixed rate with the Nationwide"

them "Thats a higher rate"
Me " but the overall cost is cheaper"
Them "Oh yes," does a few figures "about £150 ".(nearer 200 i think)

Now i hadnt specifically mentioned a the importance of low monthly payments (but best value) so am i right to be surprised that they offered me the more expensive one?

I then said "well could you send me both"
Them "no.Well it sounds a bit silly,but the system doesnt work like that. Shall i send you the first one?Then if you refuse it I will send the second one"
...?

dunstonh

2 year rates are pointless in my opinion. Too many fees, too frequently which wipe out any benefit when compared to a 5 year fixed.

17Dave

I would be wary if they will not send both.
They must have a strange system - mine will let me send / print as many as needed. I can see why they might not - too much choice and questions! But if they are recommending a higher interest rate they need to prove it is a better deal.

MortgageMamma

The mortgage broker should have asked you initially what was the most important issue, monthly payments or overall costs over the term you want i.e. 2 years. I cannot understand why they didnt ask its one of the most important questions you can ask a client. Also, if a client wants to see the difference on paper between two different products its quite easy and acceptable to send both, so long as the clients needs are PROPERLY documented and the broker only officially recommends ONE its perfectly OK to do so.

If a broker narrows down your product choice to stop you asking to many questions its a poor show in my opinion.

Regards,

MM

TheGreatBear

i presume they are offering advice and recommendation - which means they present the product they believe suits your needs and requirements. Just gets confusing if you send loads of products

hollydays

They did ask me and i told them i was looking for best value.
They have confirmed that it is their practice only to offer one at a time.

I have spoken to them and they are now saying it was human error.

They say the products were 8 lines apart on the screen and this is how it happened.While i believed their software (naaively i suppose) couldnt allow this to happen,(well, I mean, i thought this product would somehow have made its way to the top of the screen) i still find it hard to understand how,when I challenged her she could reply "the rates are cheaper" as a response,which sounds like incompetance.Ok she then admitted it was a better deal,but I have just spent some time studying martins notes to figure out that the cheapest rates dont necessarily make the cheapest mortgage so that response was just er.. well ..silly..

Ok i havent lost out and £190 was a small amount but my confidence has been more than a little dented.

TheGreatBear

dunstonh wrote: »

2 year rates are pointless in my opinion. Too many fees, too frequently which wipe out any benefit when compared to a 5 year fixed.

what if your circumstances change over the 5 year period... paying a huge redemption penalty would wipe out all the benefits?!?:eek:

Conrad

Dunstonh is correct to point out that on balance a 5 year fixed rate is far better value than a 2 year where further fees, closing costs and interim interest will be due and almost certainly outweigh the benefits of a slightly lower rate.

Thickie brokers need that commision every 2 years to keep wolf from the door. Keep reading the Sun sports pages instead of the FT girls and boys

dunstonh

TheGreatBear wrote: »

what if your circumstances change over the 5 year period... paying a huge redemption penalty would wipe out all the benefits?!?:eek:

Obviously, if you are likely to move in the next two years you either reconsider getting a mortgage in the first place as it can cost tens of thousands of pounds to buy a house in the first place or you get a fixed mortgage that is portable or you enter a deal that fits the timescale.

However, there are far too many people taking out 2 year fixed when 5 year would be more sensible. With the margins on the interest element now almost non-existant, lenders are increasing the arrangement fees and £1000-£2000 arrangement fees are becoming the norm. Over a 10 year period you pay it twice on a 5 year fixed but 5 times on a 2 year fix. If you assume £1500 a go, then that is £7500 in fees when it would have been £3000 on five year fixed.

Back to software and the point raised by the OP. Software is a just tool to be used. Some firms dont even use software. If the most popular sofware options available were used then as the others have said, there is no problem knocking out as many options as you want. If they were not using the research software but relying on provider's own software, then it may well be more work for them and they could be lazy.

A good way with these things is ask to see the research. All good advisers will show the research upon request and many will show it anyway. That way you can see the order the providers came out and why providers have been eliminated or not. Nothing beats seeing the evidence and gives confidence in the advice given.

Dan_Collins_2

Conrad wrote: »

Dunstonh is correct to point out that on balance a 5 year fixed rate is far better value than a 2 year where further fees, closing costs and interim interest will be due and almost certainly outweigh the benefits of a slightly lower rate.

Thickie brokers need that commision every 2 years to keep wolf from the door. Keep reading the Sun sports pages instead of the FT girls and boys

Thickie brokers? Dont ever come to my office, Independent only thanks!

Regarding the software. You can filter out a lot of info, so if you are after free legals, free vals etc you can filter the others out. I start with these two on standard resi remortgages then go daily interest and I also get rid of stepped. You can choose fixed etc also.

Once your research is in front of you ,you can pick how the table is formed. If you click on rate at the top the lowest rate will be top and so on. You can also compare and look at value over the mortgage periods. If you compare over the term Nationwide win in most cases as the SVR is low against a PLC. Often I go for a rate that is not topon rate, the whole point of out software is help us find the best deal to suit the client. In this case blame the broker! Maybe Conrad is correct!! LOL

MortgageMamma

i thought a thickie broker was a type of smoothie? Oh no thats thickie choker, I really must try not to be so thick in future....

Conrad, I recall you stating that you charged a fee and took commission....have you changed that now then?