Mortgage Broker Advice

HayleyB26

My partner and I are first time buyers who are in the process of purchasing a new build property. We have spoken to a few mortgage advisors, Mortgage Bureau - who have been recommended by the housing developers, these do not charge a fee, but are whole of market and we have also spoken to HL Consulting - an independent whole of market advisor - who do charge a fee.

Can anyone please explain the difference? What is the benefit of going with an advisor who charges a fee, if any?

Am I right in thinking that advisors will receive commission from lenders, which could mean that rather than getting us the best rates, they will focus on the lenders who provide the commission?

[Deleted User]

That can be an potential concern..

A fee based broker may also return the commission to you, making it relatively cost neutral, or even beneficial to you.

HayleyB26

Deleted_User wrote: »

That can be an potential concern..

A fee based broker may also return the commission to you, making it relatively cost neutral, or even beneficial to you.

My apologies, what could be a potential concern?

[Deleted User]

That the broker is commission driven.

dwsjarcmcd

There should be no difference, both will earn commission from the lender they place you with. Both will also have compliance monitoring function that will review the advice provided to ensure that it is suitable for you and your partner and should manage the application process.
The brokers have different models and you may find Mortgage Bureau very keen to discuss life assurance and home insurance (do you mean Mortgage Advice Bureau, who are a very large broker?)

HayleyB26

Oh I understand - thank you!

I have spoken to my independent mortgage advisor and he said that he gets paid 0.3% commission from lenders, and explained that he keeps his fees low (£400) because of this?

The other advisor I'm in contact with, does not charge any fees - but is recommend by the new build developers.

What would be the best route to take?

HayleyB26

dwsjarcmcd wrote: »

There should be no difference, both will earn commission from the lender they place you with. Both will also have compliance monitoring function that will review the advice provided to ensure that it is suitable for you and your partner and should manage the application process.
The brokers have different models and you may find Mortgage Bureau very keen to discuss lie assurance and home insurance (do you mean Mortgage Advice Bureau, who are a very large broker?)

If there is no difference in the services, why would people pay when they could get it for free?

No they are definitely Mortgage Bureau, but am I right in thinking they are under the same umbrella as Mortgage Advice Bureau?

dwsjarcmcd

HayleyB26 wrote: »

If there is no difference in the services, why would people pay when they could get it for free?

No they are definitely Mortgage Bureau, but am I right in thinking they are under the same umbrella as Mortgage Advice Bureau?

You’re correct, they are appointed representatives of Mortgage Advice Bureau. I noticed on their website that they are a fee charging broker unless you are going through one of their new build partners, where the fee is waived. This may be because the builder pays them, or it could be that the builder just wants to ensure prospective purchasers can get a mortgage and insists the broker doesn’t pay a fee to encourage applicants to use Mortgage Bureau, who will provide insight to the builder.

HayleyB26

I suppose it gives the developers peace of mind going through their recommended advisor as it prevents time-wasters. Which of course makes sense!

Our developer wants us to be qualified by their recommended advisor, that way we both know that we are able to afford the property.

kwame41

HayleyB26 wrote: »

I suppose it gives the developers peace of mind going through their recommended advisor as it prevents time-wasters. Which of course makes sense!

Our developer wants us to be qualified by their recommended advisor, that way we both know that we are able to afford the property.

That makes sense I suppose. However, you can use who you like.

Personally I would do it myself and not use a broker. Its not difficult and can save you money.

Brokers can help if you think you might have difficulty obtaining a mortgage as they know who is more likley to lend given the borrowers circumstances.

Verix

If the advice and service is free of charge then it's unlikely you'd be able to do the whole thing cheaper yourself, especially given the added complexity of a new build purchase.

There is unlikely to be any difference in terms of products offered between the two advisers and unfortunately there's no way of knowing which option will give you a better experience until after you've done it.

Mortgage Bureau will be well versed in the new build market so I'd lean towards them personally.