Reply to: Paying for a broker vs "fee free" any thoughts/experiences?

[Martin@AS Financial]

Here at AS Financial, I charge no fees for my independent advice or services. To take the mystery out of it, all banks pay me a set fee (0.35% of the loan), therefore eliminating any bias that there may be towards recommending a specific lender. This means that I always recommend the most appropriate mortgage for each client. All mortgage advisers receive this reguardless of whether they then go onto charge a fee.

Encompassed within the service that all of my clients get, is a specific Case Manager, who will be in daily contact with the mortgage companies pushing for a mortgage offer as soon as possible. They will also liaise with the estate agent throughout the process, keeping them up to date, and therefore minimising the chances that the sale will fall through, especially important in the current property market conditions. I understand why some brokers do charge fees as they need to cover this salary but I am in a fortunate enough position that I do not need to pass this onto my client.

[bobspud]

Just to remind you all that it doesn't take much to kick the heck out of your existing lender as demonstrated by myself last night.

I have been looking to move my Santander Business elsewhere and had spent several un-fruitful days playing catchup with a mortgage advisor from Halifax...

I lost my patience last night and called up Santander and said right I have had enough. Im off and taking everything with me this is your very last chance to start proving why I still bank with you...

One hour later and my mortgage was down from 3.99% to 1.89 with an agreement in Principal to lend me some additional money at the same rate.

[Power Mortgages Ltd]

How does it work using a mortgage to buy auction property? I have found a few on rightmove that are for sale by auction, i was under the impression you had to put down a 10% deposit at the auction. What would happen if the mortgage company then rescinded their offer? Would you lose your 10%?

Hi Ketchup,

Yes, essentially you would lose your 10%.

Buying a property at an auction can be a great way of grabbing a bargain but there are risks as you have stated above.

Firstly, when you go to the auction, if you are the winning bidder you are expected to exchange contracts on the day and pay a non refundable 10% deposit. You are then given just 28 days to complete. Whilst a number of lenders would be able to provide a mortgage offer within these timescales, there is no guarantee and it would only take the lender to query a couple of points in the application and ask for more information which may not be readily available or the valuation to take a bit more time than normal for this timescale to start to look very tight. Halifax have recently experience delays with their valuations which seem to be getting a bit better at the moment but only a few weeks ago there were delays of 3-4 weeks to get a valuation instructed.

Furthermore the property would have to be deemed habitable and worth what you are paying for the property otherwise the lender may retain some of the mortgage funds or refuse to lend on the property altogether and if this was the case you would lose out on the 10% deposit you have paid (as well as the valuation fee).

There are ways to assist with the above risk and a lot of people would view the property in question before the auction and if they like it and know they will be bidding on the property, submit the application before the auction. The valuation can be carried out prior to the auction so you will know the lender is able to lend on the property in question before you bid at the auction and in a number of cases they can Underwrite your income too and sign this point off. This way when you turn up at the auction, you will know the lender is happy to provide a mortgage on that property and is happy with your circumstances.

However, if the person sat next to you at the auction who is also bidding on the property has twitchy fingers and is happy to pay more for the property you are bidding on and ends up winning the auction bid then you lose out on the property and any fees (like the valuation fee) you have paid for the property.

Losing £400-£500 for a valuation fee (dependant upon the purchase price) is a lot easier to swallow than losing 10% of the purchase price though if you were unable to complete on the mortgage having been the successful winning bidder.

Hope that helps?

[TheFaQQer]

How does it work using a mortgage to buy auction property? I have found a few on rightmove that are for sale by auction, i was under the impression you had to put down a 10% deposit at the auction. What would happen if the mortgage company then rescinded their offer? Would you lose your 10%?

At the end of the auction, you put down 10% as it's equivalent to the exchange of contracts. You then have until completion to find the money and pay (same as any normal house purchase).

If you can't pay and miss the completion date, then they serve a notice to complete, which gives you ten days to complete, and during that time you can be held liable for costs and interest charges. If you miss that, then you forfeit the 10%.

It's no different from buying a house not at auction, though - the difference is that if you are successful at auction, it's an exchange of contracts there and then, and the timescale to completion tends to be set at 28 days.

Another problem is that you are exchanging contracts without a mortgage valuer coming round to complete the survey, so there is more chance of the bank not giving you a mortgage on that property.

[Power Mortgages Ltd]

I think it has been covered on other threads and I dont want to get into bashing other firms as I know some people have good experiences with certain firms whereas others using the same firm struggle to get hold of the firm, don't get call backs when promised and are not really kept in the loop.

Power Mortgages Limited are also specialists in contractor mortgage funding.

We do charge a broker fee which is £499 but payable upon completion only so if you do not purchase the property you are buying or if the mortgage doesn't complete if it is a remortgage then you do not pay a fee. I'd strongly advise against paying any up front fees because lenders can decline applications, your own circumstances can change and you decide not to proceed with the mortgage or the vendor (if it is a purchase) can withdraw from the sale and if you have paid an up front fee more often than not, you wont get that back.

If a CUK forum member were to contact me then I would reduce our normal fee to £399 as well.

I believe the fee we charge represents the level of service we provide. Client's will be given not only the direct dial telephone number of their advisor but also the advisor's mobile number. We are normally available up until 8:30pm weekday evenings except Fridays when we are available up until 6pm and also available on Saturday mornings too up until 1pm.

The level of commitment a mortgage application deserves, not just up until the point that the application is submitted but also once it has been submitted, liasing with the lender, seeing the application through to a successful mortgage offer and then liasing with the Solicitors to see the application through to a successful completion requires a lot of time and effort.

As I am sure you are all aware, time is money and afterall, all mortgage brokers are businesses which need to be profitable. When you tend to sacrifice income (e.g. no broker fee) then service is likely to be affected as the more time the broker spends dealing with the application, the less profitable the application becomes. Quoting a client I have spoke to who has used a fee free broker before "I felt like I was on a conveyor belt and no care or attention was given to me as a client". As I have said, I am sure there have been a lot of clients who have experienced good service with a fee free broker but there have been a lot who have not too, a look at some of the other threads will reveal this. Buying a property is a large investment, not only in your finances but your time too so to make sure everything goes smoothly and efficiently reducing the time you have to spend personally dealing with things should be a considering factor.

I have had numerous clients who have initially gone through a non-fee charging broker but come to me happy to pay a fee to get the job done in an efficient manner with an adviser they know they can contact, even outside of normal working hours and who will keep them in the loop.

We understand that contractors are professionals who may not have a lot of time to deal with arranging their own mortgage so finding a broker who can take care of everything for you in an efficient, professional and compliant manner means you dont have to spend your own time dealing with it. Even if you spend a couple of additional hours dealing with something yourself then if you have to take time off work to do this, you are losing out on money which can quickly tot up to more than a broker fee you would have paid anyway.

If your broker is not relaying the progress of the application to you, even via email, every few days then they are neglecting the application and not seeing the process through as quickly and efficiently as possible.

[Ketchup]

Ditto, if we get the property at auction tomorrow.

How does it work using a mortgage to buy auction property? I have found a few on rightmove that are for sale by auction, i was under the impression you had to put down a 10% deposit at the auction. What would happen if the mortgage company then rescinded their offer? Would you lose your 10%?

[cailin maith]

We all know you're a trucker from Scunthorpe, pretending to be a married girl on here.

I do it well though.... no one would ever guess

Ditto, if we get the property at auction tomorrow.

Exciting

Good Luck!!

[RiCu]

I'm also currently going through the mortgage process with Freelancer Financials - pretty pleased with the service so far, they've got us a mortgage at Halifax based on my daily rate (although my Mrs is a well paid permy, which helps).

[TheFaQQer]

Know what you mean and I'm just a contractor wag too

We all know you're a trucker from Scunthorpe, pretending to be a married girl on here.

We're using Halifax who were reccommended to us by FF.

Ditto, if we get the property at auction tomorrow.

[cailin maith]

Thank you for the tip Cailin-which lender have they recommended for you?

My husband went contractor route just under 2 years ago. Have to say its made us even tighter with money!!! He has had one day off sick in 2 years and about 5 days holiday...everything now is compared to "how many hours/days would he have to work to pay off x/y/z!!" Mind u if it wasn't for him being a contractor, we'd never have been able to start looking for a bigger home let alone buying it!

Know what you mean and I'm just a contractor wag too

We're using Halifax who were reccommended to us by FF.

[sbmcb]

Thank you for the tip Cailin-which lender have they recommended for you?

My husband went contractor route just under 2 years ago. Have to say its made us even tighter with money!!! He has had one day off sick in 2 years and about 5 days holiday...everything now is compared to "how many hours/days would he have to work to pay off x/y/z!!" Mind u if it wasn't for him being a contractor, we'd never have been able to start looking for a bigger home let alone buying it!

[cailin maith]

That doesn't mean I turn down free money!!

In the grand scheme of things, it's no big deal - as long as they manage to sort the mortgage in the 28 days between exchange and completion, I'll be happy.

I have to say, they have been really brilliant with us - our formal offer came in no time at all and it's our choice not to complete until this time next month but everything is running really smoothly, touch wood it stays that way!

[TheFaQQer]

Ah, quit your bitching.... you are a contractor!!

That doesn't mean I turn down free money!!

In the grand scheme of things, it's no big deal - as long as they manage to sort the mortgage in the 28 days between exchange and completion, I'll be happy.

[cailin maith]

They're charging me £495

If we go ahead with the purchase.

Ah, quit your bitching.... you are a contractor!!

[TheFaQQer]

We're using Freelancer Financials who don't charge a fee for CUK members, well, they haven't charged us anyway.

And even if they did charge, I wouldn't mind. They have been brilliant and and I can't sing their praises highly enough.

They're charging me £495

If we go ahead with the purchase.