Mortgage Brokers - what do they do?

[Libby001]

Ok I am a mortgage virgin... but I thought it was free to use a mortgage broker to get your mortgage, I thought they made their money from the commission the bank pays them. On that note has anyone had any experience of REA mortgages and their solicitor package. My local REA mortgage in Waterford, offers a package that if you take out a mortgage for over 250k that they will offer you a solicitor for 499 plus vat & outlays.

If anyone has any advice for a first timer like myself I would appreciate it. What should we have in place before we start applying for mortgages?

 

[dobbins]

Ok I am a mortgage virgin... but I thought it was free to use a mortgage broker to get your mortgage, I thought they made their money from the commission the bank pays them.

Correct - you don't pay them anything, the bank does.

All I'm saying is that brokers won't always get you the cheapest mortgage available to you.

If anyone has any advice for a first timer like myself I would appreciate it. What should we have in place before we start applying for mortgages?

I'm a first timer myself so can tell you what I did but there may be others who can offer better advice in hindsight.
The best thing to do is shop around. Decide how much you want to borrow, what type of mortgage you want (fixed, variable, tracker - I went for tracker) and how long you want to pay it back over -
then get as many quotes as you can from different lending institutions (and brokers if you must!). Ask them for the APR and how much it will cost you each month before mortgage interest relief - you can then decide the cheapest.

If they offer to pay towards solicitors or valuers all the better - just make sure this benefit isn't wiped out by you paying a higher premium than you have to each month.

Also make sure that the rates you are quoted aren't just for year 1 - rising from year 2 onwards.

You don't really need anything before you start shopping around. When you decide on which mortgage you want then you'll need all your documentation - P60s, wage slips, bank statements etc. If, when you are looking for quotes, people are asking you to call in to them or supply all this documentation I would advise you to politely tell them you are only looking for quotes at this stage and if their offer is the cheapest then you will have no problem calling in to them and giving them all the relevant documentation.

 

[DerKaiser]

Hi Libby. I used REA and found them very helpful. They will bring you through the whole process. Just tell them your priorities from the following (I've ordered them according to my choices!)

Type of rate (Fixed or ECB tracker - forget variable)
Best Rate (Always look at quoted APR)
Best Multiple (May or may not be a concern)
Customer service (Hopefully won't be a concern)

You can check best available rates online to see you're not being had!

For info the extra outlays on the solicitor deal were about €1,000 for me.

Most banks won't give direct customers a discount versus those coming from brokers. It's worth their while paying brokers as it saves them the admin work. In my view the commission is more like a fee paid by the bank to the broker for administration services provided to the bank.