Mortgage Broker or not

Captain Chaos

Captain Chaos

Captain Chaos

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Hi all,

A question if you please!

Just sold my house (STC) and have had an offer accepted on a house which I would like to purchase.

Would you use an online broker? Ive been speaking to one from portal financial. Do they look legit?? Will have to send payslips and bank statements to them if I proceed with a mortgage application.

here:--- http://www.portalfinancial.co.uk/

Seems to be ok and they are whole of market, fee free.

SO would you use them? can you offer a better broker? Would you go it alone?

Historically Ive always done it myself but in these hard times would they be the best bet?


Help if you please
 
What LTV have you got to play with?

If it's decent (say 85% or less) then you should do some quotes with various banks first (HSBC, Nationwide, Barclays/Woolwich, Santander, ING etc etc etc) as these will be far better than anything a broker can offer you.

Brokers love their upfront setup fees, which at the moment tend to be at least £1000 often more. They also love pushing fixed rate products even if your financial position means a tracker would be more suited.
 
NathanE said:
What LTV have you got to play with?

If it's decent (say 85% or less) then you should do some quotes with various banks first (HSBC, Nationwide, Barclays/Woolwich, Santander, ING etc etc etc) as these will be far better than anything a broker can offer you.

Brokers love their upfront setup fees, which at the moment tend to be at least £1000 often more. They also love pushing fixed rate products even if your financial position means a tracker would be more suited.
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LOL @ This.


I've never read such tripe in all my life.

They already said the broker was fee-free and most lenders offer the same rates via brokers as they do direct, some even offer better ones via mortgage clubs. (Exception being HSBC group and ING who ONLY deal direct).

As for the bit about "They love pushing fixed rates". I don't even know what level of facepalm to start with. Epic or gigantuan. You decide.
 
Mate, there is no harm seeing what the broker has to recommend / offer and doing your own research too - Two-pronged approach likely to yeild more results, then you can decide how to proceed. If you like what the broker has to offer and want to proceed that way then do, if you want to DIY then fine - I would say if you can find cheaper and it what you want then DIY but if the broker offers you the same / better then they can really add value / ease to the process.
 
Most lenders are available through a broker. A few aren't. HSBC for example aren't and they've been the most competitive lender (top of best buy tables for the longest) in the past few years.

My advice is to take a tracker not a fixed rate, as a fixed rate doesn't do you any good in 5 years time when it ends and you have to take a new rate or stick on the SVR. Over a long period of time fixed rates are more expensive, in the short term though you might end up better off if the banks expectations were wrong.

Go with the broker, don't agree to any fees, once they make an offer go round the comparison sites and see if it's competitive.
 
I'd be vary wary about paying for a broker. If their services are free, what have you got to lose?

Personally I'd rather be able to meet a broker than an online one though. Nothing to back that up, just personal preference.

I used one for my first mortgage nearly a year ago. We already did lots of research beforehand and the best offer he could find we had already picked out ourselves. We still went with him though even though he wasn't saving us any money. Mostly for peace of mind incase something was to go wrong. Turns out that was a good decision as we initially got turned down for our mortgage. He managed to get the decision over-turned for us. He did this within a few days and I was out of the country the whole time and could only communicate via email.
 
Their services aren't free, however you don't pay them. It's like anything though, if you're not paying for it then you're the product. The bank you get the mortgage from pays the broker for the referral.
 
BDEE said:
Mate, there is no harm seeing what the broker has to recommend / offer and doing your own research too - Two-pronged approach likely to yeild more results, then you can decide how to proceed. If you like what the broker has to offer and want to proceed that way then do, if you want to DIY then fine - I would say if you can find cheaper and it what you want then DIY but if the broker offers you the same / better then they can really add value / ease to the process.
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Damn, didn't see your post before I typed out my response. I agree entirely!
 
The Halk said:
Their services aren't free, however you don't pay them. It's like anything though, if you're not paying for it then you're the product. The bank you get the mortgage from pays the broker for the referral.
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Are you saying that if you use a broker that is paid comission from the lender, you're not getting the same product as if you went to the same lender yourself?
 
You generally do get the same product - although a fair number of lenders have products that are only available direct. However you're unlikely to be offered, for example a 4% 5 year fixed with 1000 fees from a broker while the lender would have done it for 500 fees. They don't tend to offer deals like that.

Sometimes the lender might have for example an 85% rate with a low fee on a fixed rate and not offer any 85% rates to brokers.
 
Best bet find the best deal you can to suit your circumstances, then ask the broker to see if he can beat it, ie better rate, better term etc

One thing to watch is that you do not get tied in to any other services such as life insurance without following the same rule, find the best you can yourself first and see if they can beat it. Many more now go for repayment mortgages but in they hay days of endowments people often got a poorer deal on an endowment that they could have achieved themselves due to commission fees.

Dont think its that common now, but 20 years ago a know a few people who got hit with cancellation charges on switching mortgages or cancelling other policies as they had signed a document to guarantee the IFAs commission for a number of years. Check carefully you don't fall into this, I am not sure if its even allowed now but it was an old trick to guarantee the income they made from a product that you could easily change at a later date.
 
Cancellation charges have now been limited to a small amount, and not all lenders charge them. In all cases less than £100 - unless of course you're tied in for an initial period.

Get yourself quoted for life insurance and for income protection. Check with your employer to find out what life insurance (if any) you have through them. Often you have enough with them that you need less or no life insurance. Income protection is something I'd advise, but make sure it pays out until retirement rather than just for 12 months. Price it and then decide if you want it or not. The mortgage broker will not be able to match the price you find on the internet. Same goes for home insurance.

If you need me to explain why a tracker beats a fixed rate all the time let me know and I'll do so.
 
Most brokers I've dealt with charge no fees as they get a kick back from the bank.

My advice is see what you can get yourself by searching on moneysupermarket then go to a broker (in person) and see what they come up with. You should be under no obligation to accept their recommendation.
 
Im aware that a tracker will give you a better rate, however fixed gives security in these uncertain times. Id be looking at a five year fixed at 4.19%.
 
Best approach, as I am sure has been mentioned above, is to shop around both brokers and check out what's available across some banks. Brokers do not necessarily have access to all bank offers, and vice versa.

Importantly, be conscience of the nuances of any offer (e.g. exit fees, overpayment caps, large setup fees etc). I know in my previous experience some brokers were not very transparent on the true costs and innards. At the time, the best they could offer me was just over 1% more than going direct, with same setup fees and less perks (e.g. free valuation allowance, money towards legal fee etc). You should always calculate your total exposure on each product than just purely looking at an interest rate.

Brokers really come into their own if you have "abnormal" circumstances (e.g. not good credit rating, irregular income etc)
 
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I wouldnt bother with a broker unless theres no fee involved. I was going to use a broker and he wouldnt charge me any fee's if I took out an insurance policy with his firm. I changed my mind and did all my own research and concluded ING Direct were the best for me. However I phoned London & Country to see what their options were and they came to the same conclusion as me, so I just went through them. Didn't cost a penny and they had some good advice for me.
 
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