Client Agreement with Mortgage Broker questions

FataVerde

I have just received the Client Agreement from my mortgage broker and there are some differences between the agreement and what we discussed over the phone.

The first refers to the timing of the fee payment: The broker told me over the phone they have a fee they charge on completion, but the agreement says: "For carrying out a full factfind, assessing your needs, researching a suitable lender and providing a recommendation, we charge a nonrefundable fee of £250 which is payable on application." and "Please note our fee will still be charged should the lender reject your mortgage application due to you not disclosing any material information about your personal situation. It should also be noted we do not provide a refund should you decide not to proceed with the mortgage loan after we have made a recommendation to you."

Then at the end of the agreement "I/We are aware of the costs of the services and agree to the amount and timing of these. My/Our preferred method of paying these costs is (please tick as appropriate); By direct payment OR (where possible) By inclusion on the mortgage"

The second disagreement between the agreement and phone conversation concerns the the lenders they can get mortgages from. The broker told me he can get my a mortgage from any lenders, including advising on direct-only offers. But the agreement says: "We are independent mortgage advisers and we will recommend a mortgage product that is suitable for you following an assessment of your personal needs and circumstances. This will include a detailed assessment of affordability. We will consider all products and lenders that we have access to. This means we will not consider those lenders that are only available by you going direct to them."

My questions:
1. Should I ask for the client agreement to reflect our conversation, i.e. that the fee be charged on 'completion' or is it the same as 'application'? The way I read it is that I would pay the fee even if I am denied the mortgage. I am happy to pay the charge, but on being offered a mortgage. I have a large deposit (40%) and good credit score (no debt but also no history of credit payment)

2. Would you recommend choosing to include the fee in the mortgage or direct payment? Does this affect whether I will only pay on completion vs application?

3. Can anyone explain what "We will consider all products and lenders that we have access to" means? Is this "whole of market" and is this the widest access?


Thanks! I'm not that great at legalese.

[Deleted User]

1. Ask them for confirmation of the agreement by email or something.  My fee agreement says i charge on application but sometimes change this if I'm worried about it not going through.  Would rather delay taking payment than deal with a complaint.  My actual agreement doesnt change though so its just agreed informally and confirmed on email.

2.  Most lenders wont allow it so 99% of the time you are paying separately.

3. Who do they have access to? I have 74 lenders on my list but can go to others if they let me.  Others have less than 20. 
I give prospective clients a list of lenders i use before going too far beyond initial conversation.  Some brokers can't access certain lenders and some can.  You'll have to ask them to be more clear on what they can and cant advise on

FataVerde

@Deleted_User Thanks! This is very helpful. I sent the questions along. I really like my mortgage broker, but would love to hear his number of lenders. He quoted me 5 different lenders for the best deals so far (Nat Wide, HSBC, Coop Bank, Santander, Skipton), and said his firm is part of the major broker clubs. Informally, he said he can actually also see the direct deals.

[Deleted User]

we can generally see direct deals but he shouldnt claim to be advising on them if he isnt.  If he is overshooting his regulatory remit then it might point to lax behavior in other areas

I specifically state I can not advise on or recommend a deal that is only available direct.  I dont want someone to come back and complain i didnt give them a deal they found themselves.   I will only advise from the deals I have available. 

It gets annoying in our industry at the moment as there are quite a few exclusive deals kicking about.  So I have a deal with Barclays at 90% that I can get but no one in town can.  Equally there was a firm who could get Leeds at 90% last year when no one else could.  

If you like the broker then crack on. You'll never really get 100% of the deals available covered as those exclusives always pop up that brokers rarely find out about unless you have access to it

FataVerde

On degree of access, this sounds just about right! Hard to expect 100% access. Thankfully now, interest rates are good.