Which is better for Mortgage: Broker or Bank?

evolving_doors

Basically, is there any disadvantage to using a broker?
They seem a lot more straightforward and save time. Do they push a limited bracket of mortgages or practically the same as what a bank would offer?
Cheers

dellas1979

Well, if youve a few hundred quid to spare to pay a broker, go for it.

If youre also in trickier situations, a broker will talk to a bank for you/make you sound good I guess.

Took me a bit of time to get all documents and about 3 hours to fill in the form and send off. So depends what its worth to you.

Trish56

That's total nonsense dellas 1979. Not all Brokers charge a fee. I gave you a lot of information dellas 1979 when you contacted me by pm....hope it helped so please don't lead others astray by telling people if they are in a trickier situation contact a broker.

A good broker will shop around and get you a mortgage at the best rate and one that suits your circumstances and you should not have to pay for this service.

dellas1979 wrote: »

Well, if youve a few hundred quid to spare to pay a broker, go for it.

If youre also in trickier situations, a broker will talk to a bank for you/make you sound good I guess.

Took me a bit of time to get all documents and about 3 hours to fill in the form and send off. So depends what its worth to you.

dellas1979

Trish56 wrote: »

That's total nonsense dellas 1979. Not all Brokers charge a fee. I gave you a lot of information dellas 1979 when you contacted me by pm....hope it helped so please don't lead others astray by telling people if they are in a trickier situation contact a broker.

A good broker will shop around and get you a mortgage at the best rate and one that suits your circumstances and you should not have to pay for this service.

Excuse me? That's a really nasty reply.

You did offer advice and it was appreciated! But you didnt make an application for me! Would you do that free of charge?

Reread my post. If a broker makes an application for you, they will charge you. Is this correct or incorrect? Dont put my reply down as "putting people astray". That's a reflection on you.

lawred2

If you're in any way organised and somewhat financially literate then just go straight to the banks...

You'll have to do the same amount of paperwork gathering regardless.

I've gone through a broker and remortgaged through a bank. Exact same process regardless. Only one needlessly cost me €500.

Trish56

No I would not have charged you a fee and I never ever charged anyone a fee and indeed I know many brokers that don't charge fees. So your statement 'If a broker makes an application for you, they will charge you' is incorrect as many don't and it would be advisable to check first with the broker.

dellas1979 wrote: »

Excuse me? That's a really nasty reply.

You did offer advice and it was appreciated! But you didnt make an application for me! Would you do that free of charge?

Reread my post. If a broker makes an application for you, they will charge you. Is this correct or incorrect? Dont put my reply down as "putting people astray". That's a reflection on you.

lawred2

Trish56 wrote: »

No I would not have charged you a fee and I never ever charged anyone a fee and indeed I know many brokers that don't charge fees. So your statement 'If a broker makes an application for you, they will charge you' is incorrect as many don't and it would be advisable to check first with the broker.

Do you seek clawback of commission from the client if a bank seeks clawback of commission from you? Would usually happen if the client remortgaged within the first few years after drawdown.

Do you inform the client of the period within which they would be liable for clawback if they remortgaged?

dellas1979

Trish56 wrote: »

No I would not have charged you a fee and I never ever charged anyone a fee and indeed I know many brokers that don't charge fees. So your statement 'If a broker makes an application for you, they will charge you' is incorrect as many don't and it would be advisable to check first with the broker.

The broker I used charged. The poster above got charged.

Is there something I am missing here? From my experience, they charge.

So, I am not incorrect, in my experience.

Trish56

Clients are not charged any fees or any clawbacks by me, I cant speak for every broker in the country however if they do charge both fees and clawback it needs to be outlined in their terms of business issued to the customer.

lawred2 wrote: »

Do you seek clawback of commission from the client if a bank seeks clawback of commission from you? Would usually happen if the client remortgaged within the first few years after drawdown.

Do you inform the client of the period within which they would be liable for clawback if they remortgaged?

lawred2

Trish56 wrote: »

Clients are not charged any fees or any clawbacks by me, I cant speak for every broker in the country however if they do charge both fees and clawback it needs to be outlined in their terms of business issued to the customer.

and would you expect that the means by which a client would be liable for clawback should be explicitly communicated with every product advised by the broker?

As in not simply a general outline in terms of business... because the commission arrangements between broker and financial provider will vary by product and institution correct?

There is no one size fits for all

Trish56

Exactly' in your experience' but to be fair you cant speak for every broker in the country.
As I mentioned I know other brokers that don't charge fees and people should shop around if they want a broker that don't charge. Regulated brokers can be found on the Central Bank website.

dellas1979 wrote: »

The broker I used charged. The poster above got charged.

Is there something I am missing here? From my experience, they charge.

So, I am not incorrect, in my experience.

Trish56

It's nothing to do with whether I would expect it or not however the Central Bank most certainly would and fees and clawbacks has to be fully outlined and explained very clearly in correspondence to the customer. You cannot be charged a fee or indeed a clawback unless it is explicity outlined to the customer in writing at the outset and when a product is recommended. You can check all this on the Central Bank website.

lawred2 wrote: »

and would you expect that the means by which a client would be liable for clawback should be explicitly communicated with every product advised by the broker?

As in not simply a general outline in terms of business... because the commission arrangements between broker and financial provider will vary by product and institution correct?

There is no one size fits for all

lawred2

Trish56 wrote: »

It's nothing to do with whether I would expect it or not however the Central Bank most certainly would and fees and clawbacks has to be fully outlined and explained very clearly in correspondence to the customer. You cannot be charged a fee or indeed a clawback unless it is explicity outlined to the customer in writing at the outset and when a product is recommended. You can check all this on the Central Bank website.

Thanks.

dellas1979

Trish56 wrote: »

Exactly' in your experience' but to be fair you cant speak for every broker in the country.

No I cant Trish. And neither can you. So your argument is moot.

The OP asked a question and I answered it to the best of my knowledge that I was told to make an application would cost e500.

Can you leave it there now.

evolving_doors

OP here ....Actually I went the broker route a good few years ago and there was no charge!
I also took out mortgage protection through him so maybe he got commission from that.

Just wondering what others did. My bank are just a pain to get an appointment with and very skimpy on helpful details (basically just print off the rates page and a max amount I can borrow).

I've contacted one since and got given more options/suggestions before they even sent the application forms. I never taught to ask about fees as I assumed they get a commission off the bank at the time.

Bubbaclaus

dellas1979 wrote: »

No I cant Trish. And neither can you. So your argument is moot.

The OP asked a question and I answered it to the best of my knowledge that I was told to make an application would cost e500.

Can you leave it there now.

Most brokers don't charge. Any reason in particular why you went with one that does?

Mr.H

Bubbaclaus wrote:

Most brokers don't charge. Any reason in particular why you went with one that does?

How do brokers make limey big they don't charge???

Surely they make money from somewhere being a private business?

Mantis Toboggan

Mr.H wrote: »

How do brokers make limey big they don't charge???

Surely they make money from somewhere being a private business?

Brokers get paid by the individual banks for attracting clients.

Not all banks will deal with brokers.

Fol20

dellas1979 wrote: »

Excuse me? That's a really nasty reply.

You did offer advice and it was appreciated! But you didnt make an application for me! Would you do that free of charge?

Reread my post. If a broker makes an application for you, they will charge you. Is this correct or incorrect? Dont put my reply down as "putting people astray". That's a reflection on you.

Some will charge. Some will not. Like anything in life it’s alwaysgood to shop around. My broker didn’t charge and spruced my application to make it look as appealing as possible but others that I met would have charged me for the service.
It isn’t as black and white and you make it out to be

Former Former

Bubbaclaus wrote: »

Most brokers don't charge. Any reason in particular why you went with one that does?

They have to make money somewhere. If they're not charging the client, then they're getting commission from the bank.

And if different banks pay different commissions, then maybe the broker would steer you in a particular direction which may or may not be the best deal.

Paying a set fee (in theory) avoids this.

Former Former

OP, unless you have very complicated circumstances, going direct to the banks is grand.

Trish56

Correct .. Brokers are paid commission by the lender. All lenders pay the same commission so there is no reason to steer people in a particular direction. Lenders also clawback some of that commission if the mortgage is redeemed within 3 years hence the reason why you may be charged a fee. Also Brokers are highly regulated by the Central Bank and must set out in writing why they are recommending a particular lender. A Broker will shop around and advise the client of the best deal to suit their circumstances. Some lenders will only take a small percentage of overtime, commission and bonus and others will take all of that income or a higher percentage. Many people who have been declined by a bank have ended up getting approved when they contacted a broker.

Former Former wrote: »

They have to make money somewhere. If they're not charging the client, then they're getting commission from the bank.

And if different banks pay different commissions, then maybe the broker would steer you in a particular direction which may or may not be the best deal.

Paying a set fee (in theory) avoids this.

dellas1979

I was told by several brokers that to make a mortgage application would cost about e500.

So, as we've established now and youve flown the flag for, some do and some dont.

In my experience they charge. Thats my experience. So please stop shouting me down.

FYI, I didnt go with a broker due to the cost. I went and made the application myself.

The OP asked, and my response is to do it on your own.

Bubbaclaus

dellas1979 wrote: »

I was told by several brokers that to make a mortgage application would cost about e500.

So, as we've established now and youve flown the flag for, some do and some dont.

In my experience they charge. Thats my experience. So please stop shouting me down.

FYI, I didnt go with a broker due to the cost. I went and made the application myself.

The OP asked, and my response is to do it on your own.

The reason people responded to you was because you were telling the OP to basically go their own because of the costs of a broker. The fact that most brokers would be free meant that that needed to be corrected for the OP. Nobody "shouted you down", merely pointed out your advice was poor and shouldn't be followed by the OP.

dellas1979

Bubbaclaus wrote: »

The reason people responded to you was because you were telling the OP to basically go their own because of the costs of a broker. The fact that most brokers would be free meant that that needed to be corrected for the OP. Nobody "shouted you down", merely pointed out your advice was poor and shouldn't be followed by the OP.

I have always said, its from my experience. Yes, I was shouted down. Reread what was posted.

That is my experience. Brokers charge. Am I not allowed to freely express my experience/thoughts?

Do you want to rehash everything again?

Edit: Are you saying youre a broker who would apply free of charge to a bank for someone?

Former Former

There is no such thing as a free lunch here lads.

A "free" broker will be anything but free if you want to switch mortgage early on and their commission is clawed back.

You as a customer have no idea what commission the broker is getting from Bank A vs Bank B, but Bank A may well be paying them more. Whether that affects their recommendation, who knows.

There's nothing wrong with any of that, just so long as you're​ aware of it.

Trish56

Your information is incorrect. It will be on the Brokers terms of business what commission they receive and as previously stated all lenders pay the same commission so its unfair to be telling the OP he or she will have no idea up front.

Clawbacks can only be payable if this is specifically stated in the Brokers Terms of Business and only if the mortgage is redeemed in the first 3 years.

Bigger brokers may charge a fee and if they do this will be set out again in writing in their Terms of Business and as for the Brokers that do not charge fees this is also outlined in their Terms of Business.

So for the OP there is no hidden agenda - Brokers are highly regulated and you must be informed in writing up front if there is a fee or not. Please refer to the Central Bank website where you will find a register of all brokers and you can shop around and find a broker that do not charge fees or indeed pay a fee if you're happy to do so.

Former Former wrote: »

There is no such thing as a free lunch here lads.

A "free" broker will be anything but free if you want to switch mortgage early on and their commission is clawed back.

You as a customer have no idea what commission the broker is getting from Bank A vs Bank B, but Bank A may well be paying them more. Whether that affects their recommendation, who knows.

There's nothing wrong with any of that, just so long as you're​ aware of it.

Former Former

Trish56 wrote: »

Your information is incorrect. It will be on the Brokers terms of business what commission they receive and as previously stated all lenders pay the same commission so its unfair to be telling the OP he or she will have no idea up front.

Clawbacks can only be payable if this is specifically stated in the Brokers Terms of Business and only if the mortgage is redeemed in the first 3 years.

Bigger brokers may charge a fee and if they do this will be set out again in writing in their Terms of Business and as for the Brokers that do not charge fees this is also outlined in their Terms of Business.

So for the OP there is no hidden agenda - Brokers are highly regulated and you must be informed in writing up front if there is a fee or not. Please refer to the Central Bank website where you will find a register of all brokers and you can shop around and find a broker that do not charge fees or indeed pay a fee if you're happy to do so.

Look at any broker's terms of business and it says that they "may" receive commission in a range of percentages. It will never break it down by lender or by value of mortgage. I went to a broker a couple of years ago. His terms say that he may receive commission from 0.25 to 1.0%. That's no good to anyone.

So you go to a broker, you might be looking at four lenders with maybe five different products each, trying to work out which is the best deal. On top of that, you have to factor in 20 different commissions that the broker might get, 20 different clawbacks that might apply. Even if it's all transparent and upfront, it's certainly an added layer of complexity and doesn't that somewhat defeat the purpose of going to a broker?

And the other point is that, as far as I know, not all lenders engage with brokers. BOI have only just announced their resumption of it.

As for the 'highly regulated' part, the Central Bank currently have a consultation open in which they propose to tighten up the regs, so they obviously think there's room for improvement.