Brokers - yes or no?

Maybrick

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Just wondering - what do you think are the advantages / disadvantages of using a mortgage broker as opposed to going to banks and doing all the legwork yourself? Which option is likely to get you the best deal?

I am currently looking for a mortgage and tempted to go with a broker in order to save myself time and effort - but are there any pitfalls I should avoid?

Any advice gratefully received - thanks.

Maybrick
 
Do a small bit of leg work online to find who's offering the best deal.

Then let the broker off and if they do as well or better the go with them.
 
So are there any drawbacks at all to using a broker? And if not, why doesn't everyone use them?
 
Brokers may help you to source & understand a product. But you may also want to check that the advice you receive is impartial. Check out what's in it for the broker. As a rule of thumb I generally follow independent advice or my own extensive research, particularly were it a mortgage.
 
Thanks. Just wondering, how exactly do brokers make their money? Are they under pressure to push certain lenders on you, regardless of your best interests?
 
I'd say in the current climate most brokers make the money by charging you a fee. Previously it would have been by commission but back then there was a lot more mortgages being done.
 
The broker I am considering using will not charge a fee - so I'm inclined to think I have nothing to lose by at least seeing what he comes up with. I'd just be curious to know if anyone has used a broker and had a really bad experience.
 
I went direct with the banks could not get a morgage offer back in 2006/7 went called a broker in dublin she visited me 1hrs drive away, went through everything including talking to my wife, understanding my business.

What this ment was she understood then my background 100%, then used her ifluence with the teams in the banks to get me an offer. she new I was able to pay and would pay..

she did not charge I believe the bank pays her a fee for getting the client.
 
disclosure : I'm a broker

I'd just be curious to know if anyone has used a broker and had a really bad experience.

You could ask that question about any profession Maybrick and you will find someone who has had an awful experience, be it with a doctor, dentist, accountant, or solicitor so I don't know if the question if of much use to you.

As in any profession there are good, bad and indifferent brokers.

Brokers work in one of the following ways:

1) Charge you a fee and also get paid commission by the lender
2) No fee - just get paid commission by the lender for introducing the business.
3) Charge a fee and refund the commission to you.

Some people will say brokers just add another layer to the mortgage process but use a good broker and things will progress more smoothly, again in my view - I'm sure others will disagree!

Instead of having to chase the lender continuously, the broker should take this stress from you and in the end s/he should become your advisor in relation to the whole house buying process not just the mortgage.

If you go direct to a bank, the bank can only sell their own product so you could be dealing with 5 different sales people hawking their wares making it difficult to make a decision. An independent broker will be able to advise on the best mortgage to suit you as an individual.

One thing to be aware of is dual pricing, sometimes you can get cheaper rates by going directly to the bank but at times the broker arm of the lender is actually cheaper. There is usually a pay off here in that the arm that lends the higher amount usually has the higher rate. As I have posted before do not get blinded by rate alone when choosing a mortgage, regardless of which route you choose. There are many other slight differences in the lending policies of the banks that you should be made aware of.

As a previous poster said there is nothing to stop you going direct to all the lenders and to use a broker if you so wish.

Good luck.

[broken link removed]

*awaits the "brokers are just money hungry vampires who would sell their granny if they could, drive a stake through their heart the first chance you get" replies :)
 
Thanks, that's very interesting. As a general rule, it sounds like you need to cover as many angles as possible in order to make sure you get the best deal.
 
We are using a broker at the minute. He said he goes through one application at a time. I thought they would be able to put it out everywhere at the same time!
Also, we just found out the dont deal with BOI but rather ICS which is another arm of BOI with HIGHER rates. He didn't make this clear.
NIB or Ulster bank dont deal with brokers.
We asked him yesterday (3 days after app went in) was there any news. He said it was in AIB 'queue'. Would have thought this would have been small currently!!
Would like to get Norfbanks views here.
 
There is an 8 day backlog at AIB currently Troy, believe it or not, the mortgage market is quite busy at the moment - lot of approvals but not that many pulling the trigger.
 
Hi Maybrick

I have used a broker twice and gone directly to a bank once for my mortgage.

When I first got my mortgage I used a broker from a large and well known broherage firm. This was 2004, so pretty boomy times. He was lazy, made a number of mistakes with the paper work which twice delayed the mortgage approval and was very unforthcoming when I asked about exactly how his commission worked (he didn't charge the customer a free).

Second time round, went straight to the bank, a local branch who was giving a discount to employees of the company where my husband worked. Extremely straightforward and we could see from our own research that the rate we were getting was extremely competitive.

After that special rate ran out, my husband was keen to go through a broker who charged a fee to the customer. I thought this was a waste of 1000 euro, as felt we could do the research ourselves and go straight to a bank - but in the end reluctantly agreed. Turned out to be the best decision ever. Broker got us a tracker rate of ECB + 0.6% based on the LTV of our house (it would never have ocurred to either of us that our house had gone up so much in value at the time that we would have been entitled to a rate based on that particular LTV). 4 years on, I am SOO grateful to her. The company went out of business shortly afterwards and I still think of her and wonder whether she got another job - I would love to be able to thank her for her advice and help, as having such a competitive tracker is what has made the difference for us in the last few years of paycuts and additional taxes and levies of being in a constrained but secure financial situaiton and being seriously financially sqeezed.

SO, my advice would be to go with a broker who charges an upfront fee, as they are then working for you as a client without any other influences that you are not aware of.
 
We are using a broker at the minute. He said he goes through one application at a time. I thought they would be able to put it out everywhere at the same time!
Also, we just found out the dont deal with BOI but rather ICS which is another arm of BOI with HIGHER rates. He didn't make this clear.
NIB or Ulster bank dont deal with brokers.
We asked him yesterday (3 days after app went in) was there any news. He said it was in AIB 'queue'. Would have thought this would have been small currently!!
Would like to get Norfbanks views here.

Also using a broker (from a big house, recommended by friends). So far we are happy he's doing a good job for us. At this stage we have a loan offer from AIB (same rates as if we went direct) and one from ICS on its way. I doubt we would have got them without him, considering one of us is on a fixed term contract. When I asked, he was upfront re Ulster Bank. However, I couldn't help wondering about what Troy said re AIB and ICS. When I asked our broker about BOI he said ICS where the their broker arm but never said anything about lower rates if we went direct. I've checked BOI's website but they have APRs. How can I change APR to Interest Rate or vice versa so that I can compare the two? Only then we can decide whether to ditch the broker or keep it!
 
Thanks very much for all these comments. It sounds as if there are good and bad brokers, as in any other profession. My tentative conclusion is that it is best to use one that doesn't charge a fee AND do some legwork yourself in order to maximise your chances of getting the best deal.

Does anyone disagree?
 
Also using a broker (from a big house, recommended by friends). So far we are happy he's doing a good job for us. At this stage we have a loan offer from AIB (same rates as if we went direct) and one from ICS on its way. I doubt we would have got them without him, considering one of us is on a fixed term contract. When I asked, he was upfront re Ulster Bank. However, I couldn't help wondering about what Troy said re AIB and ICS. When I asked our broker about BOI he said ICS where the their broker arm but never said anything about lower rates if we went direct. I've checked BOI's website but they have APRs. How can I change APR to Interest Rate or vice versa so that I can compare the two? Only then we can decide whether to ditch the broker or keep it!

ICS have different rates than BOI, higher rates. BOI Dont deal with brokers. Ulster Bank and NIB also don't/won't deal with brokers. That leaves AIB, ICS, KCB, Permanent TSB and EBS. If the broker tells you ICS is broker arm of BOI he is technically correct but not giving the full story if thats all he says.
 
Maybrick
I found brokers who wanted €700 fee, others €300. But some will waiver the fee altogether if you buy your life cover and home insurance through them.

I am assuming if you get approval from one, there is nothing to stop you from getting all your material back from them to try get approval from another?
 
A I've checked BOI's website but they have APRs. How can I change APR to Interest Rate or vice versa so that I can compare the two? Only then we can decide whether to ditch the broker or keep it!

BOI Rates

Variable (LTV < 50%) 3 %
Variable LTV 50% - 80% Loan > €500k 3.1%
Variable LTV 50% - 80% Loan < €500k 3.15 %
Variable LTV > 80% Loan > €500k 3.3 %
Variable LTV > 80% Loan < €500k 3.35 %
1 Year Fixed - FTB ONLY - 3.1 %
2 Year Fixed - FTB ONLY - 3.4 %
2 Year Fixed - Mover Only - 3.5 %
2 Year Fixed ALL LTVs 3.74 %
3 Year Fixed - ALL LTVs 4.04 %
5 Year Fixed - ALL LTVs 4.64 %


www.*****************.com
 
Thanks for that! They are quite a bit lower alright! We are quite pressed with time at the moment, trying to close before June. I wonder how long it may take if we went with BOI direct, if we would make it....

Just thinking I will try and make some calculations to see how much the difference would be between both, assuming that if we close in May, say with ICS, we will get some sort of TRS at least for a while, compared to closing later, not having any TRS but getting the loan at a lower interest with BOI. By the way it would be 3 year fixed, if anyone is thinking of doing me a huge favour... Also thinking this may not be for this thread, so mods please let me know.
 
Why dont you get broker to apply to AIB for you and have everything ready to make a BOI app your self soon after. You have already compiled all needed material you just need to make an appointment with them. Ask for forms beforehand.
 
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