Is it wise to use estate agent mortgage advisor?

I appreciate that phrase wasn't the greatest.

What I meant to say is that negotiators are encouraged to push their own in house solicitors/advisors above everything else. But very often the in house partners are very poor, despite them been cheaper than an independent.

 

We had that with our first house and it was fine. Made things progress a lot quicker.

 

Fair comment Fonzie …
I may have over reacted and taken it personally.

You may guess what I did for over 40 years

 

The bottom line is that the agent is choosing the broker/solicitor because they get paid for doing so. They could be really good, or they could be awful.

If you choose your own, you can look at reviews and sound them out first etc, get a recommendation.

 

Yeah. Gets commission from the lender for bringing customers to them.

 

Our mortgage advisor recommended a solicitor an they were fantastic.

 

Yep, again, all depends. We've been using a solicitor panel for a while, some on there are good and some have proved useless. As a result we've hand selected a fantastic solicitor who we'll now recommend to our clients. So again, it depends on the type of firm. We're so customer service/client experience focused that if solicitors are not up to it we won't use them. I have the guy's mobile number and can call him any time and he answers and helps.

 

I suppose the risk is that if the solicitor/mortgage advisor has a steady stream of referrals that guarantees work for them. As such they may be less incentivised to offer a high level of service than someone without that guaranteed work stream who is more reliant on customer recommendations.

 

So who, ultimately pays the commission?

 

Lender pays the broker. However, for a small mortgage this could literally be £100-£150 for an advisor that's done 20-30 hours of work. Do the math there... my experience is that 'free' brokers can't provide as good an experience because they have to have more clients to earn enough money, meaning they're not as available, too busy etc. I used two in the past before I was a broker and both were uncontactable most of the time.

 

Maybe he was sold a Low Cost Endowment Policy in the 80’s , when the whole industry was corrupt

 

The lending institution.
However , they often charged an arrangement fee to the applicant if it is a special offer/ fixed rate deal

 

And surely they'll recommend the product/lender that most benefits them not the one that most benefits the client. The amount of commission they receive will be the deciding factor on what they recommend. If the best mortgage on the market is offered by a lender that does not pay commission to brokers then the client will not hear about it from a 'free' broker as the broker would not get paid.

 

All the lenders would pay commission although not always at exactly the same rate. However we have to recommend the cheapest deal unless the client wouldn't get the required mortgage from that lender. I get a lot of complex cases that won't fit with the cheapest one that comes up, but even then I have to recommend the cheapest the client would seem to fit all the criteria for.

 

My take away from this thread is that the borrower pays, they might not think they pay, they definitely don’t know how much they pay, but they pay. Liken it to buying a carpet where you are offered free fitting and free underlay. Do people really think that underlay is free, that a carpet fitter is free? No, it’s factored in to the price of the carpet. Regarding mortgages, you’re basically paying an undeclared fee.

 

As you say, basically that’s correct.

It’s not dissimilar to a few years ago when it was deemed unacceptable for letting agents to charge high admin charges and reference fees to tenants.
Landlords therefore are coughing up for reference fees for tenancy applications.
It therefore reduces their net rental income,so what have they done over the last few years ?
Yes they’ve increased rents …

In effect, the tenants are once again paying reference fees so it’s back to square one

 

Like with owt in life, depends if you get a good one and if you do proper due dilligence.

 

Edited as I was coming across as a ****.

You’re not wrong, but the cost that was incorporated into our mortgage was a lot less than us going to the market ourselves so it’s an overall cost saving to us. That’s the way I look at it.

 

Yeah can imagine the service varies massively between them, even within the same firm. The one we used was a small firm so was easy to get in touch and they had an online portal that showed us progress, sent and received documents on it etc. Was really good, especially as we were going through all this in lockdowns etc.

 

Considering myself enlightened with this thread.

My mates has come across a hurdle though now. There is a tenant already in. Apparently this now means, even though he wants to move in himself, that he has to now get a buy to let mortgage. Even if he serves them notice as soon as the sale goes through. This means he now would have to find a 25% deposit, which he doesn't have. Also, higher fees and interest. Not sure he has any way out of this, but it seems extremely unfair. He was really looking forward to making an offer on the place.