Mortgage broker fee

natali1982

I'm interested if having a mortgage broker results in higher rate / monthly mortgage payments? We are in final stage of buying a house and we are extremely unhappy with our broker. We decided to get life cover with different provider as it was 30% cheaper and now she is intimidating us and requesting to cancel policy as she was supossed to take care of this. She said she is working completely for free and now requests compensation. At the beginning we were told her fee is covered by bank. Would it be cheaper for us dealing directly with bank? Thank you

themoneyguy

Indeed she will be paid a fee by the bank for introducing your mortgage. These fees are not terribly lucrative for brokers any more. They make more money from organising associated insurance policies ( life insurance, home insurance).

Pay no heed - You are free to organise insurance with whomever you chose.... in fact the broker is treading on dangerous ground insisting that they are your sole outlet for organising your policies.

natali1982

themoneyguy wrote: »

Indeed she will be paid a fee by the bank for introducing your mortgage. These fees are not terribly lucrative for brokers any more. They make more money from organising associated insurance policies ( life insurance, home insurance).

Pay no heed - You are free to organise insurance with whomever you chose.... in fact the broker is treading on dangerous ground insisting that they are your sole outlet for organising your policies.

Thank you. So would we have been given lower monthly repayments if we had dealt directly with the bank from the beginning?

Rob Thomas

Not necessarily. It's unlikely that a broker is getting a better rate from a bank than you would get yourself from the same bank. Whether they are recommending the cheapest/best Bank for you is another point.

Your broker should be trying to get you the best deal based on your particular circumstances.

However, a small number of brokers have been known to steer clients to the Banks which pay the highest commission to the broker.

But commission from banks for introducing mortgages is very limited now so it's probably true that your broker is not making anything from your business given that you are not taking other insurances with them, which they can make a commission on (as is your right) .

If you think you are not getting the best deal, give the Bank a call yourselves and compare the rates. Beware introductory or discounted rates.

Askaboutmoney or itsyourmoney can compare mortgage rates.

Brokers still have a role to play in helping applicants to properly prepare their applications for mortgages and guide them through the various steps and documents.

themoneyguy

Agree with the advice above.

The brokers skills would have been fully utilised in actually getting you the loan amount and assisting you in drawing down.

The rate achieved by brokers however are in line with what direct applicants would get. The rules around rates mean both brokers and consumers are in the same ball game.

I believe you would not have any advantage in getting a lower loan repayment by not going with a broker.

Trish56

Your issue appears to be the life cover that the broker has offered you. You need to advise the broker that you want the basic Mortgage Protection Cover only with no extra's added in. You should have been offered this at the outset and agreed to any extra's included such as serious illness.

As mentioned by previous posters you should not be paying a higher rate on your mortgage as the broker would have access to all the lenders and therefore be able to offer you the best rate available. Also you do not have to take out mortgage protection with your broker.