New Mortgage Broker Guide

Dan_Collins_2

Can you tell us brokers have a lot of time at the mo!

payless

Hey.. I've been out most of the day... I'm as busy as I've ever been

MSE_Martin

I'm surprised you say that though Dan...

I would've expected brokers to be more busy due to people needing to remortgage and needing help.

Is the downturn due to direct deals, or no new buyers entering the market?

Martin

Dan_Collins_2

Here we go, I am so busy etc etc!

In my area purchases are down. Many agents are closing doors or going lettings only. Staff are being laid off etc etc

Remortgage business was ok for enquiries but for me and our office most of them went direct. Retention seems to be in thing for a change and direct deals have had a big impact. Being honest has lost me business, I have spent a lot of time with people for nothing but I am hoping they will remember the service I gave them.

We are about 30-40% down as an office and our network is about the same across the board. Up north seems to look a little better.

payless

I didn't say I was earning more- just that I was busy ( and was actually saying it as I hadn't replied during the normal working day hours )

My downturn in income is mainly due to direct deals - although as I actively include them in my research I'm still getting enquiries as they go thro' ( you know valuation, initial interest, how to complete legal pack etc...) these are earning me little to nothing on a mortgage BUT is long term customrer service that will pay dividends .

I don't do as much purchase business as I used to, but I do get some- mainly movers rather than FTB all down to most of my business being existing clients

Ian_Griffiths_Halifax

Anybody who hasn't built up a good client bank would be struggling I suspect. First Time Buyers are holding back even looking because they are being bombarded with information such as, "Interest Rates are going up", "House prices are falling", "You won't get a mortgage unless you have a 25% Deposit", "You can't get a 100% mortgages" etc.

If they were to pick up the phone they would find that there is probably still a mortgage out there that would be acceptable. Obviously not as low a rate as they have been in the past, but there are still good deals compared to historic interest rates.

No FTBs coupled with no BTL investors due to lenders clamping down and the same above comments, means no movement at the bottom of the ladder and so everybody above stands still.

BrokeRage

payless wrote: »

agina I would like to draw attention to the difference between fees + commisison, and fee based ( with commisison rebated)

there are still some 2-4% fee guys ( they take commision as well + overrides) although they are jumping ship ( good -riddance!)

If we agree that best routes are

1. Commisison only
2. commission + small fee maybe acceptable ( especially if including direct deals- hard to see justification of to be more than say £250 / 0.2% if in addition to commssion)
3. Fee based (with commision rebated ) - than yes this would be 0.25% -0.5% with max 1% subprime.. although can't say I've seen many subprime brokers in the rebate business!!

I understand that view (I never liked charging fees) but, in the current climate, a fair fee with any commission offset against it has to be the fairest model. I think brokers have to flag up direct deals. We shouldn't use our "Expertise" as an excuse to pull the wool over anyone's eyes and avoid direct deals. I saw one situation last month where a (short-lived) direct deal worked out as saving a total of 2.5% in five years compared with the best I could get.

As for the guide, it is very fair overall and I echo Minimike's comments. :T

It is wrong on insurance, as he rightly says. The biggest danger to a mortgage is long-term sickness and this is a complex area requiring real expertise. Even life cover is dangerous in the wrong hands! Getting the wrong insurance could potentially cost much more than getting the wrong mortgage.

Even some brokers get it wrong. I was once told: "That policy you sold me was no good - my new adviser says that the critical illness cover only pays out for a year". Hmmmmm.

Dan_Collins_2

It is all about timing. I have been self employed 3 years so I have ltd client bank. I would have been ok if it was just purchase or just remo that I was losing, but both means that by the end of June I will probably be working for a bank!!

MSE_Martin

Sorry to hear of the tough times (genuinely)... I am a fan of brokers rather than direct in general as i far prefr cross market advice to single bank sales.

It'll be interesting to see how the FSA deals with the growth of direct deals (or should I say competitive direct deals)... in many ways as the battle for so long has been for cohesive advice - this breaks the model and it needs to act one way or the other... whether it will or not..

Dan_Collins_2

Your right Martin it will be, they are ignoring it at the mo and making it hard for us easy for the lender. I wont go in to the boring KFI issues etc but the only thing we can do is charge for research and send them to the bank direct, which I feel is wrong. But her the FSA are nowing paying or we are paying for the banks being left alone.

They need to learn from the NR thing, they are in contact about balance sheets etc more often but they hammer us about TCF but the banks do what they like. Anyhow this could have its own thread so I will stop moaning and get on with it! Thanks for listening and your support Martin.