"Whole of market" not quite so

BlueScoob60

Just thought I'd post my very recent experience on here regarding 'whole of market' mortgage brokers.

After reading the 'Mortgage Guide' posted on this site, sponsored by London & Country, having considerable savings I decided to go for an offset mortgage.

Through Motley Fool website, a broker (from London & Country, as it turned out) called me back to discuss my details. He found me what I thought was a cracking deal with Woolwich.

This was an offset tracker at 1.29% over Barclays Base Rate (currently the same as BoE base rate of 5%), so 6.29% currently. The arrangement fee is £595 with free valuation and £250 of legal expenses (but I get £200 cash back on completion, so it works out as £50 to pay). There is a tie-in period for 3 years, with a 1% of initial balance to pay as an early redemption fee.

I checked this offer with a mortgage broker I know at Chase de Vere (also whole of market), and he confirmed that this was the best deal out there for my needs. I asked him why the rates on the Woolwich web site were different from the ones I was being quoted, thinking that perhaps they had changed since the initial consultation. The Woolwich site was quoting the same mortgage but at 0.74% over Barclays base rate (so 5.74%). He went on to the site to check, and it turns out that this offer is only available if you get the mortgage through Woolwich directly, i.e. it wasn't being offered for sale through brokers.

I called Woolwich directly, and sure enough they confirmed that the product I was being offered by the brokers was a different version of the product, as they're now limiting the products on offer to brokers, and providing better offers directly to customers. Needless to say, I have now made arrangements to take up this direct offer from Woolwich.

When I got back in touch with the guy at Chase de Vere to report my findings, I questioned with him whether 'whole of market' really is what it used to mean, as both he and the guy at L&C were completely unaware of this direct offer to customers. He agreed that it was a good point.

So, the final offer I made direct with Woolwich is:
Arrangement fee of £595 (same as before)
No legal fees (different)
Free valuation (same as before)
Tracker rate of 0.74% over Barclays base rate (much less than before)
No tie-in period (different)

Thought I'd share this info with everyone as it's very relevant, and important that people get the best possible deal when remortgaging so that it costs them less in the long run.

BlueScoob60

homer_j_3

It is not something new - it has been reported many times on here.

Do you realise that they will not look at places like first direct, HSBC, Britannia, direct line etc. Not really whole of market and the loose terminology is purposeful according to recent comments issued by the FSA.

BlueScoob60

Hi Homer,

I realise that some lenders aren't covered by so-called 'whole of market' brokers, but the difference here is that these brokers thought that they did have a view of all the product offerings from Woolwich, which it turns out they didn't.

payless

my thread tells the story
http://forums.moneysavingexpert.com/showthread.html?t=880695

I have suggested Martin updates his article- but don't think he's done it

I assume you know the £595 is only payable if you want the offset option.

---

It needs consumers to spaek to the FSA and OFT if you think ( as a consumer) the term "Whole of market " is misleading

payless

I would be very surprsied if they did not know the direct deals from Woolwich when they recommended the more expensive broker deal
( same issues with CG , halifax etc)
....
remember there's nothing in this world as a free lunch- if as a conusmer you can't / aren't comfortable with doing your own research ( you seem able) paying for TRUE WHOLE MARKET research may be a better option than the so called "fees free advisers "

FSA say brokers aren't doing anything wrong in recommending broker deals, but should make consumers aware of the restrictions.

if a company implied to you- or expressed on their website that they do cover all deals - then I guess thats misrepresentation- but hey as all "consumer" websites (inc MSE) seem to recommend just a few national brokers , there seems to be a lack of coverage of this point.

BTW of course dealing direct with a lender won't always be best- lack of service, fees not highlighted ( woolwich charge a £275 exit fee )- some of us see this dual pricing as a BARRIER TO ADVICE .

dunstonh

Its perhaps about time that independent and whole of market took a defined meaning. Independent mortgage brokers should consider true whole of market and fee based whole of market advisers should as well. Commission based whole of market brokers dont have to include branch based only deals and the FSA have said they have no issue with that.

Many in the profession would like the FSA to make whole of market mean whole of market but that doesnt seem to be on the cards any time soon.

luckyfool

payless wrote: »

I would be very surprsied if they did not know the direct deals from Woolwich when they recommended the more expensive broker deal
( same issues with CG , halifax etc)

I really don't think this is necessarily the case. None of these direct only deals show up on the mortgage sourcing software so it is impossible to know exactly what is available direct with all the lenders showing up on the sourcing systems. In fact some of the "direct" only deals don't even show up on lenders own websites.

payless

well in the current market conditions its a poor adviser who does not know what happening and to be aware of the Dual pricing situation- even if they have not the where with all / ability. inclination to investigate the actual details

recent article in trade press

Fischel ( FSA) also said that transparency was key for the broker. He added: "The crucial point is ensuring that the customer is made very clear about what they are being provided with. The intermediary should clarify that there are deals only available direct from certain lenders. We don’t however think the intermediary needs to be specific about those lenders and the deals."

+ saw another quote from FSA the other day ... something along
" brokers should be aware of what happening in the market"

luckyfool

payless wrote: »

well in the current market conditions its a poor adviser who does not know what happening and to be aware of the Dual pricing situation- even if they have not the where with all / ability. inclination to investigate the actual details

recent article in trade press


+ saw another quote from FSA the other day ... something along
" brokers should be aware of what happening in the market"

Of course they should be aware of the dual pricing issue, that was not my point.

payless

so sorry I'm confused what is your point

payless

one of the brokers mentioned by the OP has a website page that says

If there was a mortgage that really suited you and paid no commission, would the broker still recommend it? A reputable mortgage broker will keep your interests at heart at all times. Address this issue with them before proceeding ... It goes without saying that WE fulfill all of the above criteria..

and perhaps more importantly at the issue of not knowing the deals - taken from last weekend's Sunday Times

Brokers such as L&C Mortgages, Chase de Vere Mortgages and Charcol said they still received information about the best direct-only deals, even where they could not place business with the lender, and they would always try to inform customers about the top schemes.