why you should REALLY support brokers

HelpWhereIcan

BrokeRage wrote: »

Spotting a decent deal is a minor part of the service, it is the application process and the problem-solving skills of the broker that count most

Not to mention that some of the comparison sites can be days out of date and a broker will normally get advanced warning of a product being withdrawn and is often able to reserve the funds/and or submit your application online before that withdrawal.

minutiae of lender's criteria often trips someone up and an online comparison site may be able to tell you that a lender will do 4 x your income, but cannot tell you that you will still fit because you have Tax Credits or won't because your income is made up partly from overtime which they will only take half of.

What if you don't have a P60 for last year to hand? Other than writing to your employer for a reference what other options may the underwriter consider to get your application through quickly?

What about that bank statment for April that you don't have? What can be done to save you having to pay Lloyds TSB £5 per sheet for a replacement statement and waiting 7 days for the pleasure of them sending it to you?

Why is the lender insisting on getting a reference for each of the 3 employers your wife has had in the last 12 months. Surely the underwriter can see that your income on it's own covers the mortgage? is there no-one I can talk to to get this underwriter to stop being so pedantic?

What about the request I have had to provide proof of deposit? It insists that it is in an account in my name and be from my own resources but some is coming from my mum. Will the lender have a problem with that?

what if you are buying a property and need to exchange quickly because you are in a contract race? which lender's current service standards make an application to them pointless as they will take 7 days just to look at things?

All these are thngs you can learn yourself and find out if you have enough time to find out who to speak to to get the right answer.

As I said, complex does not mean bad credit etc. But having said that naes is not likely to have a forum change his/her mind. Maybe a good or bad experience either way will.

I have no desire to persuade someone who sees no value in what I do to become a customer. We will just have to agree to disagree.

MortgageMamma

Graeme this isnt a professionals debate, it was originally aimed at consumers such as yourself.

As for your points above, the long term strategy planning of what effects your actions would have upon your mortgage is something that brokers have to answer, and even if we don't whip out the calculator and do it manually there are amortization tables and overpayment calculators that we have access to which demonstrate this information for a client and also print it out in a user friendly format.

I think the problem is that, like any profession there are varying degrees of knowledge, and one of the huge problems in our industry is that once the CeMAP exams have been passed, there is very little in the way of training for brokers on these issues as most companies will not offer t&c schemes due to the tight profit margins if on a fees free basis, and also the liability for the advice the trainees give. Its a sad fact and I'm sure there are a few small comapnies that are excellent in this respect, but the number of newly qualified people that post on MSE looking for a training ground only to be told to go to a bank or estate agents speaks for itself.

HelpWhereIcan

Conrad wrote: »

I wont change my mind though that many brokers are inept salespeople.

I'm feeling faint again. Another Conrad comment I agree with. (actually I am using the quote above to paraphrase the comments he has made).

I came from an IFA background and am astonished at some of the brokers (especially Corporate Agency Based) that I have come across with shockingly low levels of knowledge, scruples or both.

For example, one lady I dealt with last year was going through a divorce and had a small self employed income, some tax credits and some maintenence income.

She had spoken to one other broker who wanted to self cert her with GMAC at a silly 2 year fixed rate -even though she may be emigrating next year - and would probably have had to overstate her income to do it.

I worked out that Abbey would allow her the loan she needed and that she was better off on a tracker for life product with no ties to avoid the danger of having to pay ercs to go to Australia while still not having to worry about remortgaging or being able to switch to a fixed rate if she wants if/when her plans to move don't materialise.

Too many people have come into the industry with no prior FS knowledge and have been let loose on the public withouthaving to serve time first and without knowledge that there were market or mortgage conditions very different to the ones that prevailed last year. Funnily enough the conditions we find ourselves in now and heading back to 1995 again.

I am a fan of any cull if it means that the customer gets a better more professional service, I just fear that we be seeing the end of free advice for everyone who wants it.

Conrad

HelpWhereIcan wrote: »

Obviously does not have access to a decent research database then. :rotfl:


At the very least, I would suggest he subscribes to defaqto or Cover or Health Insurance & protection for their product reviews so he can build up his own database.

http://db.riskwaters.com/public/showPage.html?page=cover_feature&av1=cover_story&av2=1437&av3=30

http://www.hi-mag.com/healthinsurance/browse.do?section=P&adname=his_prodreview

It does not takes days to find out about these things - I suggest he takes a leaf out of your book and learns the difference between working hard and working smart.

He tells me Scot Prov have many different ways of establishing a policy, for example all sorts of menu options for the claim basis definitions. He meticulous and maybe a bit slow but he's never once had a complaint nor a claim rejected so I trust him to look after people.

I use sourcing systems for mortgages and find thwem just the starting point - they are just blunt tools, certainly just a small part of the process.

Kez100

Who produces and marks the CeMap exams? Not the FSA, surely. I am gobsmacked that you don't have an Institute which you become a member of when you qualify. They would be the body to produce you relevant CPD courses. They would be the body who should now be fighting your corner in respect of the FSA'a inequality of rules. They would be the body getting professional advertising out there. And, as importantly, they would be the body promoting links with the other professional institutes.

If the CeMap exams, for whatever reason, are not producing the quality required in practice (as illustrated by Conrad and HelpWhereICan posts) then perhaps a professional body with further, higher level, exams and - as importantly - professional experience before qualifying is what is required. Sort the men from the boys.

You are in a very difficult area when it comes to how the general public perceive you. On one hand you can argue the comsummate advisory professional and join the ranks of Lawyers, Accountants, etc On the other hand, working in what could be construed as sales, you can fall into the realm of Estate Agents, or Car Salesmen. What a huge void to jump!

The IFAs have done a pretty good job, I feel, over the years of managing to dig themselves out of the latter and come much closer 'in perception' to the former - although, while commission sales exist, I doubt they will ever quite make the fully independant section or advisory trades.

Conrad

HelpWhereIcan wrote: »

I came from an IFA background and am astonished at some of the brokers (especially Corporate Agency Based) that I have come across with shockingly low levels of knowledge, scruples or both.

Exactly, and the really gauling part is they dont know they are inept.

Take the example of 2 year deals. I had debates on this very forum stating 2 years deals are generally not best advice yet a lot of brokers on here disagreed. The point is there are fees to pay every 2 years and INTEREIM INTEREST which itsself can amount to many hundreds of pounds.

Take portability - I regularly come accross recent broker remortgages where the client had made it clear they would be moving house shortly, yet the broker did not give detailed thought to the impact the house move would have upon the to the ltv and criteria, so the client ends up being unable to move home without a large ERC being levied.

Some on here are urging the public to support brokers, and generally intimating we mainly disharge our duties very well, but I just think this is not the case.

Once and if we get rid of the slick unthinking unqualified hoardes, then I will support a broker campaign.
HOW CAN YOU THINK BROKERS AUTOMATICALLY DESERVE THE 'PROFESSIONAL' TITLE, WHEN YOU CAN BE AN ICE CREAM MAN ONE MOMENT, AND GIVING MORTGAGE ADVICE THE NEXT?:eek:

Teachers train for years not a few weeks.... :beer:

neas

BrokeRage wrote: »

I understand the reasons for your question, because mortgages are not rocket science, but they are pretty complex. Which is best, a 5.75% five year fixed with a £1,499 fee and a 5% penalty throughout, or a 5.85% with a £999 fee and a penalty that reduces (5/4/3/2/1%) over the five years on a £200,000 mortgage? That is a simple question to a broker, but what if the first is with a mutual building society and the second with a plc (for example) and the property was under-pinned 10 years ago or got flooded 5 years ago. Your comparison site won't help then, nor will the lender's call centre and you cannot sue yourself!.

Im not a mortgage advisor but an engineer so understand simple mathematics... I can write my own code in matlab excel and maths is pure maths. Your example depends on a number of factors:

1. Are you intending to keep the fixed rate for 5 years or not
2. If not then its basically a question on whether the extra 500 pound fee will be negated by the extra 0.1% interest rate over a 5 year period on the 200k mortgage.

Although you haven't stated enough information for me to calculate this... because i don't know the set repayment rate (i understand that fixed force you to a maximum repayment and a 'usual' figure included over the 25 year period. Note: I can gain this figure from a price comparison website...

I can't calculate with a 100% accuracy because you have omitted this amount... obviously as you pay off more of your mortgage the interest paid back will drop slightly. Taking a 'dumb' look at it for arguments sake and say it was a interest only mortgage then:

Then if you were to keep the 5 year mortgage for the fixed term and not incur a charge then the first scenario would be better by the tune of 500 pounds.

But for the price of 500 pounds you could protect yourself if you were to move. And 1% drop per year on 200k is alot... It be an interesting choice to way up.

But i understand these factors... unless theres some risk analysis you guys do on a guys job being available or probability that the client has to move or other things happen in the 5 year... not sure what im missing oO.

As a FTb waiting for the crash with a 20k deposit saved aiming at saving 30k in 1.5-2 year times I do not forsee myself needing a mortgage broker as it just adds to the cost.

homer_j_3

so have we saved our brokers yet?

HelpWhereIcan

Conrad wrote: »

He tells me Scot Prov have many different ways of establishing a policy, for example all sorts of menu options for the claim basis definitions. He meticulous and maybe a bit slow but he's never once had a complaint nor a claim rejected so I trust him to look after people.

I use sourcing systems for mortgages and find thwem just the starting point - they are just blunt tools, certainly just a small part of the process.

I was being a little trite of course. Tools such as comparison services like Assureweb, Exchange etc are indeed just a blunt tool, but they are not what I meant by a reasearch database.

I meant the likes of the Sesame research database, defaqto etc etc.

I was actually agreeing that the point you make about being aware of exclusions and claims basis not just cost is valid. After all that is how, as advisers we add value and offer more than just a cost comparison service.

I was just saying that it need not take takes days to become aware of this and that, seeing as insurers change their terms & definitions less frequently than lenders may change criteria, they are less onerous to keep up with - especially with the use of sources like Sesame and the publications I pointed out.

PHI is my favourite 'pet hate' for this. One guy I tried to help train once looked at me blankly when I pointed out that the more expensive policy on the table was actually better because the proportional and rehabilitation benefit terms of the cheaper one were a load of cack and for 75p per month the client would get a better level of cover.

Just making the point that the info is there if you want to find it.

MortgageMamma

so, what about the consumers opinions? we've only had a few.....as usual the discussion is becoming increasingly technical between advisers

What I'd like to know is, from a consumer point of view - what is it that you want to see coming from mortgage brokers to improve our professional image? what are your mental barriers to advice?