Do I use a broker?

Hsrainscough

Long story short, two years ago I was in a. Debt management plan that has been settled for two years now. Me and my boyfriend (who has had no adverse credit) are buying a house. We’ve been going through a mortgage broker who wants to charge us 1400 pounds.

I just went into Halifax then to put some money into my account and got talking to the cashier and she asked how much we were being charged by our broker, she was horrified by this so went upstairs and a gentlemen came down and was telling me to not use the broker and to go direct.

Halifax criteria says they won’t allow anyone who has been in a dmp in the last 6 years. The AIP was accepted but I’m scared if I go direct they will reject the full application? Our broker said he works with someone there to effectively bend the rules to get people mortgages.

The Halifax advisor wants me to ring him back today, he said that the broker is ripping us off and we don’t need to use him: I’m terrified. Please please someone give advice

dunstonh

We’ve been going through a mortgage broker who wants to charge us 1400 pounds.

£1400 is high unless they are rebating the commission on the mortgage. You typically find the mortgage broker fee (where there is no commission rebate) being around £150-£500. if the commission is being rebated, then it can actually be cheaper.

e.g. we had a case in December where we charged £1,000 fee and the commission was £2100 odd. We kept the £1,000 and the client got the rest as a rebate.

So, is it £1400 plus commission or £1400 with commission rebate?

Halifax criteria says they won’t allow anyone who has been in a dmp in the last 6 years. The AIP was accepted but I’m scared if I go direct they will reject the full application? Our broker said he works with someone there to effectively bend the rules to get people mortgages.

Any mention of bending rules would put me on guard. Bending of rules should not be happening. It may be a young kid using poor quality English or trying to make out they are doing something special and wording it badly. Brokers do have contact with underwriters and are able to discuss cases in ways branches often cant and can influence decisions through that discussion. However, it's not bending any rules. It is presenting a case, discussing it and getting a decision made on that basis. All routine stuff for a broker.

The Halifax advisor wants me to ring him back today, he said that the broker is ripping us off and we don’t need to use him: I’m terrified. Please please someone give advice

The fee is expensive if there is no commission rebate but you are not being ripped off as you knew about the fee before you proceeded. If a commission is being rebated it is actually perfectly good value.

We had a client last week who was quoted 8 times the cost of insurances compared to what we could arrange on a like for like basis by the Halifax sales rep. So, if we are going to use the phrase "rip off" we could equally apply it to Halifax.

Basically, an expensive broker does not mean you should use the branch. It means you should find a cheaper broker.

Hsrainscough

Thank you, so I should definitely stick with my broker due to the circumstances of my previous debt management plan? The advisor in Halifax actually promised me that I would just be able to use them directly

Hsrainscough

Yes the advisor is young, about 22 I think so could be using the wrong terminology but he said that they have connections with business development managers with the banks who are able to get mortgages passed where otherwise they wouldn’t have gone through. I’m worried now I’ve put my foot in it and they’ll look at the application and decline

Carrot007

I was in a similar position. Though both of us were in DMP. It's more how old the defaults are anyway (much better than recording being in plan).


My broker said it was either free or under £200 if they got no fee from the company.


Your broker is ridiculous unless you are on a mortgage over a million. Find a decent one. Also make sure they are whole market.

Hsrainscough

Who did you get your mortgage with?? I know for sure that Halifax is the only high street lender who would possibly accept us, but I know their criteria says anyone with dmp in the last 6 years is a definite no

dunstonh

Hsrainscough wrote: »

Yes the advisor is young, about 22 I think so could be using the wrong terminology but he said that they have connections with business development managers with the banks who are able to get mortgages passed where otherwise they wouldn’t have gone through. I’m worried now I’ve put my foot in it and they’ll look at the application and decline

As I mentioned previously, it is the case that brokers do tend to have better communications with the underwriters (either via a BDM or directly). So, that is correct. Although it isnt bending any rules. That is just normal activity with brokers.

It is true that brokers do have better options for placing harder cases than the branch staff.

amnblog

I feel for you here as you are getting misleading information from both the Bank (Halifax) and the Broker.

If you entered into a Debt Management Plan within the past 6 years, that is an auto decline from Halifax.

If you have been told by the Broker than Halifax is the only High Street Lender that will accept you, that is also wrong.

A number of High Street lenders will accept ex DMP cases. Most don't want one within 6 or 3 years. Some have no such limit.

It sounds to me like you do need a Broker, but you don't need to be using one who is charging double what the rest of the market is likely to charge in Broker fees.

Find a Broker twice the age and half the fee.

Hsrainscough

He said Halifax is the benchmark and if we weren’t accepted by then we wouldn’t be accepted by any. I don’t know why my broker would proceed with Halifax when I’m going to get auto declined

amnblog

Because he does not know what he is doing?

The Credit History question on the Halifax online form should be answered as ‘Yes' if any customer has had a Debt Management Arrangement which was: - Registered within the last 6yrs (whether now completed or not), or - Is still outstanding (whenever this was registered).

A 'yes' to that question is an auto-decline.

Therefore the only way to have received an AIP pass would be to declare 'no' to that question.

Unless you entered your DMP before 2013, there is something wrong here.

MortgageMamma

Hsrainscough wrote: »

Long story short, two years ago I was in a. Debt management plan that has been settled for two years now. Me and my boyfriend (who has had no adverse credit) are buying a house. We’ve been going through a mortgage broker who wants to charge us 1400 pounds.

As said previously, this is WAY too much even considering your DMP. You should be looking at a fee of £275-£495 no more than that.

I just went into Halifax then to put some money into my account and got talking to the cashier and she asked how much we were being charged by our broker, she was horrified by this so went upstairs and a gentlemen came down and was telling me to not use the broker and to go direct.

The halifax "adviser" will tell you that, first time buyers are attractive prospects. I don't think with the DMP you would fit their criteria it doesn't matter if you go direct or not - remember halifax can only tell you about their products, a good broker looks at ALL the available mortgage products/lenders for you (in excess of 90 lenders last time I checked)

Halifax criteria says they won’t allow anyone who has been in a dmp in the last 6 years. The AIP was accepted but I’m scared if I go direct they will reject the full application?


Our broker said he works with someone there to effectively bend the rules to get people mortgages.

That's egotistical rubbish. Nobody at Halifax would bend the rules for him, no matter how friendly he is with them that sort of thing really doesn't happen anymore. Your broker cannot guarantee Halifax will accept you, he can have a go a persuading them but they operate quite strictly to their policy. Sometimes the smaller lenders e.g. small building societies can be flexible, but not the big banks.

The Halifax advisor wants me to ring him back today, he said that the broker is ripping us off and we don’t need to use him: I’m terrified. Please please someone give advice

Your broker is ripping you off. He is clearly more concerned with his bottom line profit than your experience as a first time buyer - brokers are meant to take the stress away from you and arrange you the right mortgage first time, not fleece you for every penny whilst massaging their own egos. Use someone else.

Good luck. And don't worry there will be a good lender available to you - DMPs are not that unusual some lenders are only bothered about seeing it was finished and conducted satisfactorily, some lenders do want a 3 year period since the DMP has finished though.