Mortgage broker feedback

DavidRossitter

Hi

I am about to remortgage and met recently with AWD Home Finance - their proposition for a one off fee (to be advised but no more than 1.95% or about £3000 if I recall correct whichever is the lower) they will bring more competitive mortgages than I can source direct.

The fee is a one off fee for life so if I go for a 3year product via them they will go through the same process in 3 years time, and again as required.

The guy who came around seemed reasonable enough but anyone any experience of AWD and thoughts on the one off fee process. I cant see them coming with a product that pays for their fees and more in 3 years beyond what I can find, so there is a leap of faith that they are going to be around and do an equally good job for the next 20 years. The man from the Equitable was equally nice 15 years ago and I got burnt there so am natually cautious.

Any feedback - good or bad would be appreciated?

Thanks David

herbiesjp

ANy good adviser worth anything would do a good jopb for you first tim earound and kep in contact to help with any future needs - they do not need to charge a fee of 1.95% or £3000 for the benefit, they will normally get in contact for free

By paying this fee, you want to get value for money, so you will go back to them. However, it should be them coming back to you as a matter of course and good service

Personally I would use that £3000 and put to better use.

AndrewSmith

Any fees fre whole of market broker will do exactly the same, if not more, and will not be charging you an extortionate 1.95% fee for the pleasure.

Fee for life is a con, any decent mortgage broker will always retain their existing clients.

You are paying 1.95% to them for absolutely no reason at all. Don't do it, it is throwing money away especially as this fee will be added to your new mortgage and you pay interest on it for the next 25 years.

DavidRossitter

So will a "no-fee" broker be able to beat what I do my surfing the net (which is what I have always done) - if so where is a good place to find one. This companies claim is that they can find better deals that I would be able to that will more than offset their cost - but if there are others that can do this without the fee then even better!

Thanks

herbiesjp

You can find plenty fee free whole of market advisers, who also get exclusive deals direct from lenders

These people are not offering anything different, that is, apart from the extortionate fee!

Retired_I.F.A.

The law used to say a fee no more than £25 could be charged by a broker but I dont know if it still applies.

homer_j_3

No such law applies now and its people like the company above who are charging extortionate fees and keeping the commission that are taking advantage of consumers.

2 ways to receive advice -

fee free (commission taken by broker) or

for a reasonable fee and any commission received by the broker is offset against that fee with surplus returned to client or shortfall paid.

AWD has been mentioned on here recently - AWD money extra - I think. They were fee free if I recall from their website.

Retired_I.F.A.

Are you sure that law no longer applies? It was in force when I was last involved, about 5 yrs ago and even then very few knew of it as mortgages have been brokered for fees for years and advertised satating fees on tv likewise.

AndrewSmith

DavidRossitter wrote: »

So will a "no-fee" broker be able to beat what I do my surfing the net (which is what I have always done) - if so where is a good place to find one. This companies claim is that they can find better deals that I would be able to that will more than offset their cost - but if there are others that can do this without the fee then even better!

Thanks

A no fee broker will be able to offer you exactly that same, if not more, than the company you have seen.

What is ironic is that normally companies charging such high fees usually have what is known as restricted panel access. This means that far from being able to look at the entire range of mortgages available to brokers they can only use a select panel of, say, 30 lenders.

You really would be paying 1.95% (plus interest for it being added to the loan) for absolutely nothing.

Also the thing about using a no fee broker is that even if they come up with the same deal as you, if you place the case via them you will be protected and indemnified against the advice should you have cause to complain about the suitability of the products etc. If you go direct to the lender you have no such protection. It can also be easier to place it via a broker. For example how many lenders would send a mortgage adviser to sit in your house to go through the paperwork with you at 8.00pm after you have finished work?

sarkin

In short its a con, as the others have said a fee free broker will stay incontact for the life of the mortgage. If it was me and I had that kind of spare money I would pay off the balance of the mortgage.

homer_j_3

Retired_I.F.A. wrote: »

Are you sure that law no longer applies? It was in force when I was last involved, about 5 yrs ago and even then very few knew of it as mortgages have been brokered for fees for years and advertised satating fees on tv likewise.

Yes - mortgage regulation came in in OCT2004 and whilst I wasn't aware of that rule prior to your post and I am certain that it is not breaking any regulatory rules to charge for your advice. Any charges must be explicit in the nature that they are clearly set out on the Key Facts Document that should be issued at the earliest possible moment.

If the KFD says that you will be charged £10k for the advice and you are happy with it then at the moment, there would be no issue. If the KFD said I was free then asked you for £500 for the advice, that would be incorrect.

There has been whispers of the FSA looking at the fee based advisers for the fairness of their fees. Whether that is true or not, I do not know but taking upto 5% of the amount borrowed clearly is not fair charging.