why you should REALLY support brokers

MortgageMamma

Some good points coming through, especially from Kez100 thanks for sharing your feelings about your earlier experiences with "advisers".

The problem the public have when it comes to using an adviser is how to find a good one. Of course we all get referrals from existing clients, accountants, solicitors etc, but its pretty obvious the only reason someone will recommend an adviser to a friend/colleague/associate is because they have received good service themselves. The thing is though we all have our strong areas and areas where we are not so good. Mine is buy to let - not necessarily because I can't do it, just Ive never had many buy to let cases. However I am excellent with Adverse cases and I absolutely LOVE doing protection business and no not for the commissions as once in a while I rebate some back into the policy anyway.

It would be good if the public were provided with a reliable indicator as to the quality of service a particular mortgage broker provides. Most of us keep this information anyway on the grounds of TCF (we send out forms to monitor customer satisfaction), but, it would be good if we had some sort of independent body such as trading standards or something that rated us in a way that the public understands.

Sorry if that sounds like waffle but I know what I mean.

Homerj. nobody has written off any ideas on the thread. I am in complete agreement with Conrad about his level of specialism and that it is a good (but not the only) way forward. I don't necessarily disagree with HWIC about switching to a fee based model. I don't disagree fully with what you are saying either. But to me, I have my own ideals of how I'd like to see the industry operate, because I want my services accessible by ALL, but they are MY personal ideals and ultimately I know there is very little chance of getting things the way I want them unless there were more people wanting the same thing.

cells

What can a Mortgage Adviser offer someone that one cant get with 1h on the net for free?

or do you all just fill in forms for the stupid?

BrokeRage

cells wrote: »

why are you worried if you offer invaluable services.

i have never used a mortgage broker and i never will. you offer nothing but liar loans for the stupid.

(I thanked you for your penultimate post as it proved my point). Actually, we do fill out forms for people with limited literacy (if that is your definition of stupidity, it isn't mine btw).

A great many clients have problems articualting health issues, so we help with that too, to avoid the risk of inadvertent non-disclosure.

judi24

My experience of mortgage brokers has not been very positive - 4 years ago we used Carrington Carr - who came to the house - did all the paper work and seemed to offer a very efficient service - until they tried to sell protection products! They tried hard to sell us a whole range of protection products and my ex-husband is an insurance man's dream and just kept saying how good it sounded. It was only when the final paper work came through that I realised how much this would all cost!

I then had them remove the protection (and got a much better deal elsewhere) - at this point thier service changed completely and we were dropped like a hot potato - we did get the mortgage but the adviser was not impressed - and became downright hostile!

The same company contacted me recently ( they have changed names though) but again thier advisor was really unhelpful! He came out to visit - took loads of details - set up an appointment to come back then cancelled because I was not in a position to complete ( complicated because I was still waiting for legal conformation that I culd buy the house off my ex) - I still needed advice and definately didn't get it!

I paid around £2000 for ther advice 4 years ago - this was supposed to be lifetime advice - which I took to mean they would not charge me again - but they wanted to charge me extra for the extra borrowing!

Now I need good advice but once bitten!!!!

cells

BrokeRage wrote: »

(I thanked you for your penultimate post as it proved my point). Actually, we do fill out forms for people with limited literacy (if that is your definition of stupidity, it isn't mine btw).

A great many clients have problems articualting health issues, so we help with that too, to avoid the risk of inadvertent non-disclosure.

and the bank wount help said stupid people to fill the forms out?

still dont see what it is of value you offer, apart from perhaps getting people liar loans

dunstonh

I think the problem with some mortgage advisers is that the has been a massive influx of new recruits who thought it was easy money and for a while it was. It was also unregulated until relatively recently and the regulation when it came was light touch (compared to other areas). So, you could really get away with things without anyone finding out about it. At least, that is what many thought although the consequences appear to be coming home to some now.

So, you had a significant minority who were treating the role as a pure sales role to get as much money out of you as possible rather and were willing to bend rules rather than an advice role and acting professionally. It is those individuals that have harmed the image of the mortgage advisers. These individuals need hounding out and those intending to stay need to act professionally and up the service they give to make sure they have something more to offer.

and the bank wount help said stupid people to fill the forms out?

Yes, but increasingly the banks and building societies have stopped offering advice and that means you get virtually no consumer protection as you take on the liability. A mortgage adviser gives the advice and takes on the liability for suitability.

still dont see what it is of value you offer, apart from perhaps getting people liar loans

Whole of market products available in one office instead of having to search yourself. Exclusive deals better than direct (that one isnt so strong at the moment but it is usually). Hand holding (particularly useful for first time buyers.

Personally, I think long term that mortgage business will follow the way of home insurance and motor insurance and be dominated by the internet. However, recent research has shown that over 80% of first time buyers use mortgage brokers so there is still some way to go yet and when the deals are the same if you go DIY or use a broker than many will prefer to use a broker for the ease.

If the FSA do increase mortgage regulation upto investment level (which they have suggested at times, although they have also said it wont happen in the next year or two), then you may find that brokers come back into play again because the compliance requirements will make brokers cheaper for lenders than using their own branch network. Much the same as IFAs can massively undercut the banks on their life, pensions and investment products, even using the same providers the bank themselves use (i.e. Scot Wid for LTSB, L&G for Barclays etc).

cells

dunstonh wrote: »

Yes, but increasingly the banks and building societies have stopped offering advice and that means you get virtually no consumer protection as you take on the liability. A mortgage adviser gives the advice and takes on the liability for suitability. oh please, how many "mortgage advisers" get sued becase "that !!!!!! sold me the wrong mortgage"

Whole of market products available in one office instead of having to search yourself oh no, 10mins on the internet! and why do i need them to serch 4000 mortgages, i only care perhaps of the 10 most competitive! . Exclusive deals better than direct (that one isnt so strong at the moment but it is usually). Hand holding (particularly useful for first time buyers.) i dont intend to pay a mortgage broker £2000 to hold my hand. anyone who does that is stupid at best.

Personally, I think long term that mortgage business will follow the way of home insurance and motor insurance and be dominated by the internet I agree. However, recent research has shown that over 80% of first time buyers use mortgage brokers so there is still some way to go yet and when the deals are the same if you go DIY or use a broker than many will prefer to use a broker for the ease. at what cost?

If the FSA do increase mortgage regulation upto investment level (which they have suggested at times, although they have also said it wont happen in the next year or two), then you may find that brokers come back into play again because the compliance requirements will make brokers cheaper for lenders than using their own branch network. Much the same as IFAs can massively undercut the banks on their life, pensions and investment products, even using the same providers the bank themselves use (i.e. Scot Wid for LTSB, L&G for Barclays etc). why not use a one off small fee internet broker?

the truth is, they offer nothing of value and a lot of them will be out of work soon if they are not already. but look on the bright side, they can get themselves a good unemployed 10x income fake wage slips mortgage! :T

BrokeRage

neas wrote: »

Fixed rate deals... have a maximum repayment amount per month... to offset the fact you are getting a lower rate than the SVR. This is why some people with lower mortgages remain on the SVR as they literally shovel all their extra cash to pay off the mortgage before the end of the term.

On a 25 year repayment mortgage the interest is set at a rate and the repayment capital per month is calculated such that you will finish after the 25 years.

I hardly call it misinformation... please tell me if this is incorrect because most of my friends/family cannot overpay their mortgage by more than X pounds a month, thouse that can are on the SVR.

I was merely commenting you didn't provide me with all the figures and I wasn't going to bother calculating the required repayment portion of a mortgage... that would reduce the interest payments over the initial 5 years hence skewing the figure of 500 pound difference slightly.

Im sorry but i hardly think i'm wrong... you trash my understanding but fail to provide any explanation... isn't that a bit silly coming from an expert?



As the recession hits home i find you will be doing the decorating yourself... on your spare time off... to save money.

I still cannot find evidence of what Mortgage brokers provide other than providing simplicity and extra cost to the process that could be negated by some thorough research and a deposit saving attitude.

I haven't trashed you at all, but I wouldn't dream of doing some thorough research on the net and then try to do your job. I 'm sure you can argue that it is not a fair simile, but it is.

Anyone who is on standard variable rate to enable over-payments is misinformed, as there are some excellent trackers with no set-up costs and no penalties. The reason that most fixed rates have penalties and limits on over-payments has nothing to do with their "Cheapness" compared with SVR. It is because lenders usually borrow at a fixed rate to lend to you at a mark-up but, if you repay too much, they are left holding the funds at that rate and may not be able to re-sell them. You are right in saying that it restricts the ability to over-pay, I just didn't understand the way you expressed it.

I am not trashing your knowledge at all, but you are just not listening. It did not add to the cost using a fees-free broker, prior to the very recent dual pricing scenario as lenders recognised the value of marketing their products through intermediaries who did much of the initial work for them. It does not just simplify the process, it stops it going wrong.

As it happens, I am an independent broker based in the offices of an independent estate agent, so I don't even agree with the perceived wisdom that all estate agents are wide-boys. Some do a great job and, like mortgage brokers, the public have a view that they just put buyers and sellers together and then pocket unearned money as an "Unnecessary middle-man". They do a lot of work before a sale is made and a great deal more between then and completion. They get tarred with the brush earned through sharp practises used by many of their competitors.

There, I have made myself really unpopular now!

dunstonh

Yes, but increasingly the banks and building societies have stopped offering advice and that means you get virtually no consumer protection as you take on the liability. A mortgage adviser gives the advice and takes on the liability for suitability. oh please, how many "mortgage advisers" get sued becase "that !!!!!! sold me the wrong mortgage"

Sue is the wrong word because the internal complaints proceedure and the FOS deal mostly with redress payments. The FSA has been striking off advisers recently and police involvement has occurred with some. I received a letter last week from my PI insurer saying that they expect premiums to rise in future due to mortgage complaints.

Whole of market products available in one office instead of having to search yourself oh no, 10mins on the internet! and why do i need them to serch 4000 mortgages, i only care perhaps of the 10 most competitive! . Exclusive deals better than direct (that one isnt so strong at the moment but it is usually). Hand holding (particularly useful for first time buyers.) i dont intend to pay a mortgage broker £2000 to hold my hand. anyone who does that is stupid at best.

10 minutes internet searching wont find you the best deal. It wont tell you the true costs and any lending issues that lender has. You dont need to pay a mortgage broker £2000. To be honest, their qualification level doesnt justify it. However, most mortgage brokers are free to use (on the basis that it doesnt cost you any more than going direct). Sometimes its actually cheaper to pay a fee and get commission rebated.

f the FSA do increase mortgage regulation upto investment level (which they have suggested at times, although they have also said it wont happen in the next year or two), then you may find that brokers come back into play again because the compliance requirements will make brokers cheaper for lenders than using their own branch network. Much the same as IFAs can massively undercut the banks on their life, pensions and investment products, even using the same providers the bank themselves use (i.e. Scot Wid for LTSB, L&G for Barclays etc). why not use a one off small fee internet broker?

Have you seen the limited options offered by the internet brokers? You also assume that execution only is cheaper. That is not always the case and even where it is, there isnt a lot in it. You just have to look at the number of mistakes that real advisers have to put right from the DIY brigade (as well as those that use salesforce reps) to see that DIY carries a diffferent sort of cost.

cells

dunstonh wrote: »

Sue is the wrong word because the internal complaints proceedure and the FOS deal mostly with redress payments. The FSA has been striking off advisers recently and police involvement has occurred with some. I received a letter last week from my PI insurer saying that they expect premiums to rise in future due to mortgage complaints.


10 minutes internet searching wont find you the best deal. It wont tell you the true costs and any lending issues that lender has. You dont need to pay a mortgage broker £2000. To be honest, their qualification level doesnt justify it. However, most mortgage brokers are free to use (on the basis that it doesnt cost you any more than going direct). Sometimes its actually cheaper to pay a fee and get commission rebated.



Have you seen the limited options offered by the internet brokers? You also assume that execution only is cheaper. That is not always the case and even where it is, there isnt a lot in it. You just have to look at the number of mistakes that real advisers have to put right from the DIY brigade (as well as those that use salesforce reps) to see that DIY carries a diffferent sort of cost.

i used Cavendish for 2 life insurance policies, and to "re-pension".

can you as a IFA honestly say you can beat them on prices?

BTW i suspect IFA will find the next decade harder than the last with the net and sites like MSE.