Use a mortgage broker or go directly to lenders?

Brendan Burgess

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In yesterday’s Sunday Times, Niall Brady suggests avoiding brokers as more lenders are restricting their best deals to their branches.

Some don't deal with brokers at all
National Irish Bank offers some of the best deals.
Ulster Bank.

Some offer a better deal going directly
First Active 5 year fixed rate: 6.26% (broker); 5.99% (direct)
EBS generally better direct.
Halifax is cheaper than Bank of Scotland, its broker arm.

But some deal only through brokers: IIB and the sub-prime lenders.

And from yesterday’s Sunday Business Post, it appears that some are now charging all customers a flat fee. I think it was Irish Mortgage Corporation were mentioned and they charge €495.

Relevant threads on the topic on Askaboutmoney

Some brokers represent only a few lenders, so won’t be able to get you the best deal

broker get you more than going directly?

broker charges a fee for getting a higher than expected mortgage

Some brokers hunt commission

General discussion on the issue

Would you be willing to pay a fee to your broker?
 
Some further thougths...

Remortgaging
I would guess that brokers have very little role in remortgaging especially if one has a low LTV. One is in no hurry, so the argument that a broker can speed things up or get you a higher borrowing amount is no longer relevant.
 
We are using a broker for our mortgage.

Re: Some offer a better deal going directly
First Active 5 year fixed rate: 6.26% (broker); 5.99% (direct),

Our broker has quoted us a fixed 5 year rate of 5.99%.... (6.1% APR).
 
every property I bought I used a broker. They pay for themselves period.....eg
can negotiate on your behalf on a myriad of items eg requirements for life cover, security, rate, mine more often than not will view the property with me also, not oto mention running one bankk off another and avoiding the numbing time consuming tedium of filling forms etc.
They also have an ear to the ground re upocoming rates and deals and new developments etc etc.
Brendan, you have got the thin edge of this wedge!
A good mortgage broker is worth it's weight in gold for any property investor.
 
There is a part of me that is mildly upset by seeing the head administrator - who is a very financially astute man say 'brokers have very little role in remortgaging'.

the fact is that brokers represent more than half (closer to 60%) of the residential mortgages placed in this country is in itself testament to the lack of fact in that statement.

It is unfair to assume that every person has an equal understanding of the mortgage or personal finance market and in the area of educating people brokers (in my opinion) do an excellent job.

The numbers speak for themselves, and until recently when banks broke away from long established agreements with brokers there was no 'dual pricing', this move actually only serves to dilute their market message, confound the consumer and create mistrust between intermediaries and lenders, as a broker i am forced to accept their reasons for doing it, but I believe that the methods and timing are flawed and morally questionable.

i hope that you accept criticism in the same vein that some of us who are facing hard times do.

karl deeter
 
Brokers can actually still send business through Ulster Bank. We just don't get commission. I've sent cases through them since.
 
do you charge your clients a fee for sending their mortgage to ulster bank?
 

This was posted elsewhere by Jimbobp. I thought it was a very good and concise summary on whether to use a broker, so have added it to this key post.
 
Brokers are to mortgages providers what travel agents are to airlines.

In the same way that you will usually get a better deal on a standard direct flight by going to the airlines website than you would paying a travel agent, you will usually get a better deal on a standard straight forward mortgage by going directly to the bank.

Travel agents come into their own with atypical and potentially expensive flight options in the same way that brokers come into their own with customers with out of the ordinary circumstances.

I believe that in future years, mortgage brokers will go the way of travel agents. Banks will stop paying commission and deal directly with the customers, who, in general terms, are getting more clued in on mortgage rates. In the same way as the online ticket booking is now the norm for airlines, I can see direct online mortgage applications being the future of banking.
 
Folks

This is an important topic. Please stay on-topic. I have deleted several off-topic posts.

The employment prospects and financial status of mortgage brokers becoming redundant is not relevant to this thread.

Brendan
 
I think that banks can handle the business thats out there directly at the moment because there is VERY LITTLE business being done. I think most of the banks do not have the capacity to deal with the volumes of business that was being done at the peak of the boom. When things return to normal, and volume of business improves, a lot of customers will end up very unhappy with the service levels that the banks offer.
Dual pricing is going to kill the broker but the banks have a lot of work to do to improve their service levels to cater for increased direct business
 
I cannot agree that banks give a poor service in providing mortgage facilities. I was in the front line some years ago and we had a simple check list of the various requirements. When clients understood these simple requests matters proceeded without much problems. The usual problem was when the solicitor qualified his certificate of title. Again this was usually overcome if the person who was adjudicating on the application could be assured that the issue would not affect marketability. I am not anti brokers in any way and appreciate some people basically dont want to follow up simple issues.
 
i think that if there are different prices for a client using a broker versus going direct then brokers may well be a dying breed, but i'm not a believer in the 'travel agent' to 'broker' comparison. airline tickets and mortgages are vastly different products and you can't just log on to the web and sort out your mortgage. until recently there was no price difference either so using a broker or not was really about choice rather than about the prices you'd get. if the mortgage process gets simplified and you don't need more than two or three documents then we may well see the industry go the way travel agents did but until that time brokers are still a huge part of the market, i think that to dismiss the intermediary channel using air-travel as an example is simply not comparing like with like.
 

Agreed.

In addition, an airline ticket costs hundreds, maybe thousands of euro. And there are very few nuances to buying an airline ticket - you want a ticket at a time that suits you to fly from A to B. That's it. A mortgage is somewhat more complicated than that. And before anyone else jumps in, I know that the clever folk that frequent Askaboutmoney are well able to educate themselves about the finer points of mortgages, but they do not represent the majority of Irish people.

As Mortgage Guy says, dual pricing may cause the demise of mortgage brokers. My own obvious vested interest aside, I think this would be a bad day for the consumer, as it would mean the death of all the value-added services that a good mortgage broker will bring to a deal, many of which have been discussed here on Askaboutmoney before.

Tied agents have come in for a fair amount of criticism both here and elsewhere about selling investments. I, for one, would be worried if all mortgages were sold only by tied agents.
 
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