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  • Mortgage Finance

    I would like to know what the opinion of the forum is regarding using a mortgage broker to obtain mortgage finance, rather than researching yourself. Would you or not use a mortgage broker? And Why?

  • #2
    Re: Mortgage Finance

    Hi there,

    I think it depends on what kind of person you are, If you have a lot of experience in the mortgage market ie you buy and sell houses regularly then you may have established some great ongoing deals with certain lenders.

    If however you are like most people ie do not buy and sell property regularly then I heartily encourage you to spend a few quid and use a professional intermediary. You can look at it as a middle man spongeing off you or - they can provide you with options ideas and advice that might easily have passed you by had you not involved them. It may even be the difference between getting ANY mortgtage and NOT being able to buy any property.

    Make sure you talk to a broker who covers the whold of the market. Some IFAs / brokers have tie ups with specific lenders. Ask them up front - don't be shy.

    Yes could be a few hundred quid you pay them but could be the bets money you ever spent.

    Robin

    Comment


    • #3
      Re: Mortgage Finance

      A mortgage broker is your next best option in case you don't qualify for a bank's strict guidelines. But even if you'd qualify for a bank loan, a broker may also have competitive rates/fees. To get the best of both worlds, it is best to shop around and compare rates and terms. However, not everyone is a potential shopper. Some borrowers will do a lot better having a professional assist them with mortgage financing.
      http://secubond.co.za

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      • #4
        Re: Mortgage Finance

        I use a 'whole of market' mortgage broker and it's great. He does all the work and it doesn't cost me anything. He gets commission from the lender.

        Comment


        • #5
          Re: Mortgage Finance

          A mortgage broker does the leg work for you for your particular circumstances.The good ones have good contacts as well which can help immensely.
          Estate Agents Aberdeen

          Comment


          • #6
            Re: Mortgage Finance

            Consult with both and draw your own conclusions as it is a very large commitment. Get your own quote, then see what a mortgage broker can do for you.

            Comment


            • #7
              Re: Mortgage Finance

              Hi Walkerm1

              Brokers used to be an absolute must for sourcing a decent mortgage. You paid a premium but this cost was cancelled out by the monthly saving on the competitive mortgage deals they source.

              They're still an excellent resource but no longer really have access to the exclusive non-highstreet deals. You'll be able to source all the mortgage deals they can. So you can think of them like a price comparison website!

              They're of great use if you have very specific circumstances, such as peculiar pay structures for your job, or mitigating credit issues perhaps, but on the whole you can find the same deals they can source.

              So to sum up, they're great if you can afford it! Beware 'Free' brokers, since they'll be covering their costs by getting commission and so they'll have vested interests. It's definitely worth paying for a broker if you're going to go down that road.

              Best of Luck

              Dan
              Free Guides For First Time Buyers!

              www.FirstTimeBuyerGuru.com

              Comment


              • #8
                Re: Mortgage Finance

                Hey Dan,

                As is often a case with any industry that has a dubious past history of unscrupulous tradespeople and is still marred by a few bad apples you have fallen into the trap of tarring all mortgage advisers with the same brush.

                I absolutely agree that brokers are rarely able to source better rates than can be obtained direct, but I disagree that the value of their services has no more merit than that of a price comparison service.

                I do not charge my clients a fee, because I'm appreciative of the fact that if I recommend a High Street lender to a client and want to charge them a fee for my services then they can simply walk out of my door, drive to the High Street, and get the same mortgage free of charge. Therefore, I am uncomfortable charging fees and do not feel I can justify doing so.

                Yes, this means I work on a commission only basis, but that has never led me to recommend a product to any client based on any criteria other than their needs and circumstances. Commission is never, and can never be, a deciding factor in the advice process.

                I would advise asking friends and family for recommendations of a good local mortgage adviser. If you pick a name out of the phone book there is a chance you may hit upon one of those bad apples, but a recommendation from a trusted acquaintance should hopefully steer you in the right direction.
                ____________________________________________
                Property for sale in Torquay

                www.thomasdobner.co.uk

                Comment


                • #9
                  Re: Mortgage Finance

                  Hi IFA

                  Firstly let me apologise if you took offence by a comparison of your services to a price comparison website. It was meant in the spirit of sourcing the best deal for people's circumstances.

                  I apologise if my post gave a rather unscrupulous image of commission-based IFA's. You're absolutely right that a few bad apples have tarred the industry. However, the fact remains that it's still enough of a problem that the FSA feels it necessary to make large overhauls by 2012.

                  I don't mean this in an inflammatory way but would be interested to get your feedback on this extract from a 'Telegraph' article so I can be sure my view is not being unfairly skewed. I would never take a newspaper's content as gospel, but the quotes from the FSA don't seem consistent with your view that only 'a few bad apples' are causing this reaction from a government body.

                  "The Financial Services Authority (FSA) has outlined new guidelines that effectively outlaw commission payments, which have been seen by many consumers as a way of getting "free" advice

                  The FSA has made it clear that it is concerned that these payments are used to disguise the cost of financial products, and may create bias in an adviser's recommendations.

                  A spokesman for the FSA said it hoped its proposals would restore consumers' trust in the financial services industry at a time when many "need real help and advice with their retirement and savings planning". The changes are due to come into force in 2012"


                  With respect,

                  Dan
                  Free Guides For First Time Buyers!

                  www.FirstTimeBuyerGuru.com

                  Comment


                  • #10
                    Re: Mortgage Finance

                    Hi Dan,

                    No need to apologise, I just wanted to put an alternative point of view to the comments you had made.

                    I can only speak from my own personal experience and knowledge of other advisers I know in the industry and from that I would say that the significant majority are honest and trustworthy. Maybe there are more problems of this nature in inner-city areas and other parts of the country than I am aware of in the South West but given that the FSA have imposed bans on a very small number of advisers around the UK over the last couple of years either the problems are less significant than you think, or the FSA themselves are failing in their quest to remove the unscrupulous traders from our midst.

                    If there really was a significant issue with corrupt financial advisers around the UK don't you think a better solution would be for the FSA to identify those at fault and remove them from the industry, rather than simply changing the rules but then allowing known corrupt individuals to continue to trade? I don’t believe that this is about cutting out corruption; there are other more effective methods to do that if it was the FSA’s primary purpose.

                    I haven't read the article that you have quoted, but the key phrase for me is "A spokesman for the FSA said it hoped its proposals would restore consumers' trust in the financial services industry". One of the four key tasks that the FSA is charged with is to maintain market confidence, so maybe this process is more about the improving the UK consumer's perception of the industry and overcoming the general consensus, as shown in your own post above, that the industry is rife with corrupt and unscrupulous individuals.

                    However, I'm not best qualified to comment on the story from The Telegraph as I believe it relates to the FSA's Retail Distribution Review (RDR) which relates to the selling of long term investment products and which I do not advise on. There is also a similar review under way which will encompass sales of mortgage and insurance products - Mortgage Market Review (MMR).

                    There are long-running debates throughout the industry relating to the pros & cons of the outcomes of these FSA reviews and proposals and you can find plenty of arguments from both sides by searching online and the debates are much too complicated to get involved in here, but from my perspective I believe that the availability of free advice is very important for a large proportion of the population who would not take advice if they were faced with a bill of several hundred pounds for the privilege.

                    This will no doubt lead many consumers to shy away from proper independent advice and into the arms of the banks and building societies who will continue to provide a free service but only offer their own limited range of products.

                    I’m not so sure that this is good for our industry, even if it does improve consumer confidence in independent advisers as the FSA hopes.

                    With respect also,

                    Thomas
                    ____________________________________________
                    Property for sale in Torquay

                    www.thomasdobner.co.uk

                    Comment


                    • #11
                      Re: Mortgage Finance

                      A mortgage broker is an intermediary who brings mortgage borrowers and mortgage lenders together. A mortgage broker collects paperwork from a borrower, and passes that paperwork along to a mortgage lender for underwriting and approval.


                      It depends upon an individual whether he/she want to use the services of a mortgage broker. There are many benefits of hiring a mortgage broker that can outweigh the disadvantages.


                      They have many lending sources or we can say they have many connections which automatically opens a lot of options if you use one. If you have little or some knowledge in the mortgage market and it just did not make sense, a mortgage broker can help.

                      Comment


                      • #12
                        Re: Mortgage Finance

                        The only reason for not using a mortgage broker would be if they charge large fees. With the competition between lenders at the moment and the low interest rates you may be able to source some deals yourself and save yourself the broker fee. I myself do not charge fees for arranging the mortgage as much of the work is done via telephone appointments and email. I have found this works very well with clients.
                        Anthony
                        Compare the Mortgage Market
                        http://www.comparethemortgagemarket.com

                        Comment


                        • #13
                          Re: Mortgage Finance

                          Yes, thats right but the question was should you use a mortgage broker or not. Short answer - if they provide advice thats free of charge why would you not use one? If you go to your bank all they can sell you are their own mortgage products. Go to a broker that is whole of market then they can put you with the lender that offers you the best deal at that time. There ought not to be any bias either towards a particular lender as they all generally pay the same commission. Hence, you receive best advice.
                          Anthony
                          Compare the Mortgage Market
                          http://www.comparethemortgagemarket.com

                          Comment


                          • #14
                            Re: Mortgage Finance

                            As homebuying can be a stressful experience, having a professional assist you with your mortgage financing may be a service worth paying for. Just keep in mind, however, that not everyone is looking out for your best interests. It would help to research, shop around and compare rates and terms then show the best quote to other lenders and see if they'll go for a barter.

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