Did you use a Mortgage broker?

[Tigris]

Question time

Did you use a mortgage broker when purchasing your home or just use comparison websites and go direct?

They do say mortgage brokers can get better deals apparently? Also noticed a lot of mortgages have a £999 product fee which apparently my local mortgage broker says this doesn't apply when the mortgage is applied for by a mortgage broker?

Obviously they charge and apparently this one the fee only applies once a mortgage is accepted at £500 (mortgage broker fee)

 

[Mark T Jones]

The saying about comparison sites is that theywork for the wise and feed off fools. (The most common example being stripped-down insurance policies, to 'win' the price war)

To avoid being a fool you need to familiarise yourself with a number of variables and nuances.

If you are self employed, for example, it's likely to be far less straight forward than if you are in long term employment

TLR

Take a look online, question anything you don't understand and see if you are likely to be approved.

Then talk to a broker

 

[Ozzy]

We have shopped around the past couple of times we've moved house, but we always found that Santander always had the best deal available to us. As we were already with them we just called them up and got a good deal each time and have remained with them for roughly the past 20 or so years.

Weirdly, for us loyalty has always paid off. That said, if it wasn't for that I would tend to use a broker.

[edit] Not just when moving but always when our deal reached expiry, always the same and worked out better to remain with Santander. No, I don't own Santander and don't hold shares and have no commercial interest

 

[Lucan Unlordly]

We used a broker when we first got on the housing ladder. He wasn't tied to any one supplier, hence me having a mortgage with some Australian bank on a rented property and another for our personal home with Bradford & Bingley.
Although this was 30 years ago he's recently helped a relative get back on the ladder following a difficult divorce, when other channels had closed.

 

[tony84]

Also noticed a lot of mortgages have a £999 product fee which apparently my local mortgage broker says this doesn't apply when the mortgage is applied for by a mortgage broker?

Find a different broker when they are saying this!

Mortgage lenders typically offer 2 products at the same banding - one is a higher rate with no/lower fees and the other is a lower rate with fees.

It is usually cheaper to pay the fee (or add it to the mortgage) on larger mortgages and take the lower rate. Where as with smaller mortgages the fee plays a bigger part in the overall cost...

As an (rough) example
£999 on a £100k mortgage is like adding 0.5% to the rate on a 2 year deal.
£999 on a £200k mortgage is like adding 0.25% to the rate on a 2 year deal.
£999 on a £100k mortgage is like adding 0.2% to the rate on a 5 year deal.

None of this takes into account your mortgage will be a thousand pound more and so will take a few months to clear that or the interest charged on the £999 btw.

But the fact the broker is saying they can save you the fee is rubbish. They can, but it will cost you on the interest rate. Which may still be cheaper overall but as a sweeping statement it is just wrong.

I always say to people, if you are using us a price comparison service, just go direct. By the time we charge our fee even if you do not find the absolute cheapest lender, your probably still better off as the difference between the top 3-4 lenders is a lot of the time less than a fiver a month.

If however you see value in having someone on hand to answer your questions, someone to deal with the agents and the underwriters, someone to reassure you if you have a wobble or there is an unexpected problem and someone to ensure you actually fit criteria and affordability - then a broker comes in useful.

A broker isnt for everyone, but we do add value and make easier along the way


This wasnt meant to sound like a sales pitch btw, I cant help but think it turned into one haha, sorry if that is how it come across.

 

[Tigris]

Find a different broker when they are saying this!

Mortgage lenders typically offer 2 products at the same banding - one is a higher rate with no/lower fees and the other is a lower rate with fees.

It is usually cheaper to pay the fee (or add it to the mortgage) on larger mortgages and take the lower rate. Where as with smaller mortgages the fee plays a bigger part in the overall cost...

As an (rough) example
£999 on a £100k mortgage is like adding 0.5% to the rate on a 2 year deal.
£999 on a £200k mortgage is like adding 0.25% to the rate on a 2 year deal.
£999 on a £100k mortgage is like adding 0.2% to the rate on a 5 year deal.

None of this takes into account your mortgage will be a thousand pound more and so will take a few months to clear that or the interest charged on the £999 btw.

But the fact the broker is saying they can save you the fee is rubbish. They can, but it will cost you on the interest rate. Which may still be cheaper overall but as a sweeping statement it is just wrong.

I always say to people, if you are using us a price comparison service, just go direct. By the time we charge our fee even if you do not find the absolute cheapest lender, your probably still better off as the difference between the top 3-4 lenders is a lot of the time less than a fiver a month.

If however you see value in having someone on hand to answer your questions, someone to deal with the agents and the underwriters, someone to reassure you if you have a wobble or there is an unexpected problem and someone to ensure you actually fit criteria and affordability - then a broker comes in useful.

A broker isnt for everyone, but we do add value and make easier along the way


This wasnt meant to sound like a sales pitch btw, I cant help but think it turned into one haha, sorry if that is how it come across.

Thanks Tony,

think I would rather use a broker. Being self employed things aren't going to be simple either.

 

[tony84]

Thats fine. But the broker should be explain fees to you rather than saying they can get them without. I t just sounds like they are more interested in getting the sale than they are explaining things to you.

 

[fisicx]

We used a broker because we had a complicated mortgage. Was well worth the investment.

 

[UKSBD]

I used a broker when buying 1st house 88/89 when I was a lot more naive

When talking about fees, he told us he gets his fees from mortgage company.

What he didn't say was that they were added to the mortgage.

I kicked up a fuss when noticing just before exchanging and never did pay any extra.

My broker recommended the solicitor we used, but he got the fees removed, I often thought they were in things together, but solicitor stopped him making the charge because I kicked up a fuss.

 

[tony84]

What he didn't say was that they were added to the mortgage.

This is banned now I think.
Financial services has been cleaned up a lot even since I became a broker 12 years ago.

 

[Tigris]

This is banned now I think.
Financial services has been cleaned up a lot even since I became a broker 12 years ago.

The broker we are speaking to has been recommended by the estate agent but is completely independent.

He did say years ago anyone could be a broker then they FCA changed a lot of things.