Help with a financial question anyone?

kennysarmy

kennysarmy

Yeah but can your army do this?
Suspended / Banned
Messages
7,312
Name
Jeff
Edit My Images
No
I am looking for a new mortgage deal.

My current bank has offered me a fixed rate 5 year deal for 3.79% which will save me about £30 per month for 60 payments ~ £1800

I've also got a mortgage broker to look in to it for me. He can get me 3.29% which will save me an additional £1345 but he wants £345 to arrange it.

Is there any reason NOT to get him to do it?
It's an additional saving of £1000 for an up front payment of £345 !

Comments from any guys and gals who know more about money things than I do?

Ta
 
without reading all the small print and having a deep untrust of estate agents / mortgage brokers, it sounds on screen a bit of a no brainer.
 
Is your mortgage broker completely independent? As in, not working for any particular lender? If he is, there should be no reason not to trust him as he's being up front about his fee. (My wife is Compliance Officer for a mortgage lender, and previously for an IFA, where she is in charge of making sure the sales people act in the interests of the customer, not their own commission pot).
 
Shine On said:
Is your mortgage broker completely independent? As in, not working for any particular lender? If he is, there should be no reason not to trust him as he's being up front about his fee. (My wife is Compliance Officer for a mortgage lender, and previously for an IFA, where she is in charge of making sure the sales people act in the interests of the customer, not their own commission pot).
Click to expand...

Thanks, he was recommended to me by a good friend, so I have no reason to doubt his integrity, my query was more one of "Have I missed anything" as like Lynton said...it does seem a bit of a no brainer....I may just see if he can cut his fee to £300 :) a nice round number!
 
I would check that the terms and conditions of the two mortgages are equivalent. I also found that the arrangement fees (like valuations etc) were higher for the lower rate mortgages, so check these fees (which are different from the broker's fee).
 
Are the costs for arrangement fees, surveys, and what have you the same on both mortgages?
 
DorsetDude said:
Are the costs for arrangement fees, surveys, and what have you the same on both mortgages?
Click to expand...

His email states:

In simple terms we would normally charge £ 345 for arranging the deal (as this is our standard “Broker Fee” and covers all of the work involved in “managing” any application through from start to finish, including liaising with Solicitors & Lenders throughout the process)...​
 
kennysarmy said:
His email states:

In simple terms we would normally charge £ 345 for arranging the deal (as this is our standard “Broker Fee” and covers all of the work involved in “managing” any application through from start to finish, including liaising with Solicitors & Lenders throughout the process)...​
Click to expand...

Yes but some mortgages have arrangement fees as well. They'll offer a cheaper % rate but then take the money off you up front. Or insist you use their surveyor which costs more than choosing one independently. However, if your broker is kosher he will have checked all this and taken it into account when working out which one is really cheapest for you.

Id go and punch in a few figures in on money supermarket as well if I were you, with the same figures you've used to get these quotes, see what comes up.
 
So his Broker Fee doesn't include a survey fee or conveyancing solicitors. You will probably be much better off going with your existing provider.

What's your loan to value %? I've just, last week, opted into a 5 yr fix with my existing provider (NatWest) @ 3.39% no fees at all, at all. Very happy.
 
2blue4u said:
So his Broker Fee doesn't include a survey fee or conveyancing solicitors. You will probably be much better off going with your existing provider.
Click to expand...
Not necessarily. They may still want to charge another survey fee ("it's a different mortgage product sir, we have to carry out another survey, sorry")

Ive used an IFA for my last few mortgage changes and he's never yet charged me a fee and the deals Ive got are better than any Ive found online. Sure, he's getting commission somewhere he must be, but so what, if my repayments are lower?
 
2blue4u said:
So his Broker Fee doesn't include a survey fee or conveyancing solicitors. You will probably be much better off going with your existing provider.

What's your loan to value %? I've just, last week, opted into a 5 yr fix with my existing provider (NatWest) @ 3.39% no fees at all, at all. Very happy.
Click to expand...

I think around 30%

3.39 is good - Santander only offering me as an existing customer 3.79 :(
 
DorsetDude said:
Ive used an IFA for my last few mortgage changes and he's never yet charged me a fee and the deals Ive got are better than any Ive found online. Sure, he's getting commission somewhere he must be, but so what, if my repayments are lower?
Click to expand...
Rules have changed - dramatically. IFAs now charge for their advice.
 
DorsetDude said:
Not necessarily. They may still want to charge another survey fee ("it's a different mortgage product sir, we have to carry out another survey, sorry")

Ive used an IFA for my last few mortgage changes and he's never yet charged me a fee and the deals Ive got are better than any Ive found online. Sure, he's getting commission somewhere he must be, but so what, if my repayments are lower?
Click to expand...

Since December 2012 Financial Advisors cannot take commission. If they want to be paid :) they have to agree a fee. The idea is to stop advisors recommending purely on the amount of commission.
 
It's possible there are some honest mortgage brokers around. I guess......

Our current chap has now taken to forwarding emails unread from the lender (who won't talk to me because I have a broker). Periodically I ring him up to ask what he thinks he should be doing for his money.

But yeah, there's cheap money around ATM. Look hard and then grab it. Watch out for lock in periods and fees for charging fees, obvs.
 
Suvv said:
Since December 2012 Financial Advisors cannot take commission. If they want to be paid :) they have to agree a fee. The idea is to stop advisors recommending purely on the amount of commission.
Click to expand...
My last one was arranged in April 2013, I didnt pay a fee. But hey-ho.
 
DorsetDude said:
My last one was arranged in April 2013, I didnt pay a fee. But hey-ho.
Click to expand...

My mistake :oops: :$

They can no longer get an initial lump sum commission from the provider. They have to agree a fee with you, but the fee can be in the form of a commission (who writes these laws!)
If they agree a commission with you they get it installments from the provider during the life of the product.
So they can still be biased by how much they will get :confused: but they are supposed to tell you what their commission will be.
 
The important thing for the OP is to check the Arrangement, Booking and valuation fees on the actual mortgage. Factor in the brokers fees. Then see whats best value.

Also check if there are any redemption penalties after the fixed rate period. You want one where there isnt so you can change again freely.
Oh and if youve got any spare monthly cash, a mortgage that allows you to overpay may be worth having.
Mine allows 10% per year and at the moment I am able to take advantage of that.
 
Last edited:
Suvv said:
My mistake :oops: :$

They can no longer get an initial lump sum commission from the provider. They have to agree a fee with you, but the fee can be in the form of a commission (who writes these laws!)
If they agree a commission with you they get it installments from the provider during the life of the product.
So they can still be biased by how much they will get :confused: but they are supposed to tell you what their commission will be.
Click to expand...

Yeah. Also they could work for free :)

As it happens I'm talking to 2 brokers ATM about 2 different mortgages. Both take a commission from the lender. One also takes an upfront fee, the other doesn't.

I don't actually care how much commission they get as it doesn't change how much I pay. But I do check the deals very carefully to make sure the mortgage they are offering is good for me.
 
Another thing to consider is that if you can get a cheaper "like for like" deal then, if the current levels of repayment are OK for you maybe use the better rate to reduce the mortgage term as this could save money in the long run.

The last time I redid mine when the fixed period came to an end I was able to get a deal with a monthly payment within £3 of what I was already paying but reduced the time left from 12 to 11 years.

Just a thought.....
 
Some let you roll up the fees into the borrowing so you don't notice them so much. If your aim is to pay the least amount of money overall over the next 5 years you may find that ones with fees might work out cheaper once everything is considered. It would depend on whether fee is fixed or a percentage and how much you borrow. With higher amounts to borrow the difference in interest paid would offset the fees paid a great deal more. For lesser amounts the reverse would be true.
 
I am also with Santander and was quoted last week for 3.29% for 3 year fixed and 3.79 for the 5 year fixed with no booking fee`s etc also has the option to pay off 10% every year
 
To the OP and anyone else looking to change lenders or renegotiate a residential mortgage - The broker /lender is obliged by the FCA to issue 2 documents, an IDD and KFI . these have all the details about the loan , fees and charges in a standard format its easy to check and compare what you are getting. Brokers do have access to cheaper products but check the KFI/IDD to check that what you see is what you get - remember too if you use a comparison website yfor a mortgage quote your data and enquiry will be sold to brokers/intermediaries to follow up.
 
Overexposed said:
To the OP and anyone else looking to change lenders or renegotiate a residential mortgage - The broker /lender is obliged by the FCA to issue 2 documents, an IDD and KFI . these have all the details about the loan , fees and charges in a standard format its easy to check and compare what you are getting. Brokers do have access to cheaper products but check the KFI/IDD to check that what you see is what you get - remember too if you use a comparison website yfor a mortgage quote your data and enquiry will be sold to brokers/intermediaries to follow up.
Click to expand...

I've been emailed the IDD and a document titled "General Terms and Conditions"....
 
kennysarmy said:
....and then it transpires the best deal was with my current bank - who wont let me have THAT deal because it's for...

"BRAND NEW CUSTOMERS ONLY!"

No wonder there was a banking crisis !
Click to expand...

Worse than that. Some banks won't lend to me because I don't have any debt.
 
You must log in or register to reply here.
Back
Top