Mortgage advice

Silly question as always but what is the benefit of using a broker/advisor rather than using a compare site online?

 

Good and fair question. A number of things:

1. Brokers can sometimes get access to cheaper deals than the general consumer - quite a few of the searches I do result in an 'intermediary only' mortgage being the best deal. The money saved here will likely dwarf any broker fees.

2. Lenders are different and have widely varying criteria. Some almost refuse to lend to self-employed people, some don't like recent maternity leave, some don't like lending to anyone with an ounce of bad credit, whereas others are fine. A broker therefore can make sure you only apply to a lender that's likely to accept you, rather than you apply to some that will reject you. If you get rejected, your credit file will likely take a hit and make it even harder to get one.

3. Certainly where I work, we do basically all the work for you. Find the best deal within the criteria as above, fill in the application, send it off, deal with any lender queries/questions arising from it, chase the lenders, we can even chase solicitors if you use one from our panel. Takes a huge amount of stress out of what's already a stressful enough time.

It's amazing how many properties and circumstances have complications with them as above; trying to negotiate through it all without a knowledgeable broker can be tough!

I should add 4. Those of us that offer (free) protection advice as well, in terms of life insurance, critical illness cover and income protection. Very few people I know have adequate cover and the odds of something happening during a mortgage term are way higher than I imagined before I started doing this. We can make sure people get the most relevant cover for their situation and budget.

 

Cheers Mr Journo. I thought that might have been the case regarding knowledge and everything but didn't realise that you had access to other deals. Well I kinda did but didn't realise the extent of that

My next, and last, question is how much roughly are fees to a broker? Are we talking hundreds, thousands, tens of thousands?

I'm extremely nosey

 

How come some advisors do it for free (like mine), whereas others charge quite a sizeable fee?

 

Seen the good and bad in using a Broker, in 90’s we had a broker who was purely interested in his commission value by trying to push us onto a certain lender, despite better ones being available. Found out later the commission was higher(believe rules have changed now to stop this).

Equally my Daughter bought her first house last year and the broker was brilliant, her boyfriend had a zero hour contract and despite having a large deposit and him able to prove he was working 50-60 hours a week really struggled to get a mortgage.
The Broker without a doubt got it sorted and was worth every penny.

 

The honest answer to that is that the ones that do it for free are a bit daft, no offence intended! I could put 20 hours of work into a case and then the house purchase falls through, or someone changes their mind about selling (it happens), loses their job etc and you've done 20 hours of work for nothing.

A heck of a lot of work goes into many cases, and as explained above, you can save people a lot more money than the fee in other ways, and potentially prevent situations where you don't successfully get a mortgage.

Before I became a mortgage advisor I used free and paid services and whilst there will be exceptions the free services tend to be overwhelmed because people love a freebie, meaning they're always too busy, you can never get hold of them etc. Because they aren't charging fees, they'll need to do more cases to get the fees from lenders, hence they're more busy. So, as a general rule, I think you'll get a better service.

Our typical fee is £449, but can be up to 1% (rarely) for a real nightmare case, simply due to the sheer work involved with some. I'd argue that's a drop in the ocean when comparing to the tens or hundreds of thousands a mortgage costs, especially if it's the difference in getting a better deal, or maybe between getting accepted or rejected completely if you're not a simple case.

 

I had a situation about 6 years ago when i bought a house that had been part exed to Persimmon. Them being absolute knobs, forced me to use their broker (free to me) and solicitor which technically isnt legal. I wouldve walked away but id have been cutting my nose off to spite my face.

To cut a long story short, the broker I wanted to use at the time charged £250 and when I told him all of the above he was disgusted. He however couldnt find a better mortgage than the free one. Since then I've never paid for it and I get £100 every time i refer someone too. I dont use the same one as Persimmon made me use.

 

Yeah that makes sense, I'd agree that times have changed. We have to recommend the cheapest deal to clients unless there's an extremely good reason not to, e.g. there's a reason they may be rejected. You have to make detailed notes to explain your recommendation and any of your cases can be audited.

 

VERY intrigued as to what products you're offering currently, given that this is the area I work in. All of them were pulled from the market at the start of the Covid pandemic and I'm not aware of any that have returned as yet offering ASU cover.

Good luck with the new role. My deal is up for renewal after 31st October, so I'm just outside the 6 month window at the moment. Ironically, I'd just read the Martin Lewis article about 10 minutes before discovering your post yesterday.

 

Yeah, some builders and even some estate agents (usually the 'free' ones) push you like mad to use their other services, such as in house brokers, and make life difficult for you if you don't. Had it myself.

 

To be clear, we don't currently do accident, sickness and unemployment cover. Critical illness and income protection are different policies.

 

If rates rise as they MIGHT, even re-mortgaging early could be beneficial, though it is to an extent speculatory. Depends on people's risk appetite.

 

They threatened to put it back on the market if I refused. It is bang out of order. I hope they go under at some point in the future. Morally bankrupt company.

 

'Strike' are ones on my **** list. 'We're free but if you don't use our non-obligation solicitors and mortgage brokers we'll recommend to the vendor that they go with a different offer'. Aye.

 

I know the difference. I'm intrigued as to what income protection policies, if any, you have access to at present, as the post-Covid pool is very small, particularly in terms of unemployment cover.

I should clarify that I work in this area, and I'm wondering if there are products now available to intermediaries that I'm currently unaware of.

Happy to discuss via PM if you'd prefer, and thanks for the initial reply.

 

Ha of course I know you would, just making it clear to the public. The stuff we are still doing is where you receive x% of your pay for either a year, 2 years or life if you’re off sick. So where someone has say 6 months full sick pay the policy kicks in after that for a defined period, or until stated retirement age.

 

I've used a broker for my mortgages for the best part of 20 years and as long as you find a good one who listens to your circumstances, is transparent about fee structures vs commissions and has access to a range of companies and products and isn't tied, I'd recommend using one rather than doing it yourself or letting big companies sell to you.

 

BUMP.