Reply to: Contractor Financial(No Fee) vs Contractor Mortgage Made Easy (Fee)

[Mark McBurney@CMME]

Sorry RD409 but I have to correct you here.

A professional mortgage intermediary will never recommend a mortgage based upon who pays what commission. If that was ever evidenced they would lose their ability to be a mortgage intermediary and their livelihood would be ruined.

The Financial Conduct Authority who regulate mortgages would never allow these types of practices of recommending a particular lender because it suits the intermediary and not the client. Advice has to be given on what is best for the client's personal circumstances and that is the only determining factor when advice is given.

A whole of market intermediary will always recommend the lender best for your circumstances and all lenders pay commission to intermediaries. Some slightly more than others granted but again that should never bear any consideration when recommending a mortgage.

Go back 20 years and yes, there were a number of cowboy advisors who may have practiced 'commission chasing' but no intermediary would get away with it now under the strict regulations.

The numbers simply don't add up even if someone was stupid enough to do that. If we assume a 'higher paying' lender might pay a fee which is something like 0.4%, we're talking about us risking our license and livelihood for the sake of about £100. Utterly ridiculous.

[Power Mortgages Ltd]

Free brokers usually recommend the products where they get commission. Whereas the fee based brokers would recommend pretty much everything that is available through brokers. If the provider offers commission to the brokers, then you can ask the brokers to reduce the fees.

I say this as my experience in general, and there must be exceptions. Always remember, if you pay someone, they work for you; if it is free, they work for someone else.

Sorry RD409 but I have to correct you here.

A professional mortgage intermediary will never recommend a mortgage based upon who pays what commission. If that was ever evidenced they would lose their ability to be a mortgage intermediary and their livelihood would be ruined.

The Financial Conduct Authority who regulate mortgages would never allow these types of practices of recommending a particular lender because it suits the intermediary and not the client. Advice has to be given on what is best for the client's personal circumstances and that is the only determining factor when advice is given.

A whole of market intermediary will always recommend the lender best for your circumstances and all lenders pay commission to intermediaries. Some slightly more than others granted but again that should never bear any consideration when recommending a mortgage.

Go back 20 years and yes, there were a number of cowboy advisors who may have practiced 'commission chasing' but no intermediary would get away with it now under the strict regulations.

[rd409]

Well that's the thing both are getting paid but CMME is getting paid twice both lender and me.
I'm happy to pay if if i know CMME is doing something different than CF.
both saying that we've got agreement with Halifax on my case by talking to underwriter directly and there's no reason why your application should be rejected.

BUT I'm confused now

Thanks,
Faraz

The only thing that is different between CMME and CF, is the level of service. I have dealt with CMME in past, and you get a response straight away through email or phone. CF are a bit slow in responding. This means more back office staff to support the paper work at CMME.
Have you tried asking for discount to your broker? I don't see a reason, why they would not reduce the fees if they are getting paid twice.

Just my 2p.

[farazfastian]

Well that's the thing both are getting paid but CMME is getting paid twice both lender and me.
I'm happy to pay if if i know CMME is doing something different than CF.
both saying that we've got agreement with Halifax on my case by talking to underwriter directly and there's no reason why your application should be rejected.

BUT I'm confused now

Thanks,
Faraz

[FatLazyContractor]

Indeed my client pays me for my services so I have no issues with doing the same. Remember nothing in life is free

Never say that in Scotland. The spongers had everything free so far.

[SlipTheJab]

I used CMME, 2 years ago, and I've got nothing but praise for them. I tend to feel more comfortable paying for services but that's just me.

Indeed my client pays me for my services so I have no issues with doing the same. Remember nothing in life is free

[Mark McBurney@CMME]

I understand but is it not also waste of time and money of free brokers if my case is not successful? Why they would proceed with my case if there's a chance of failure? They still have to earn their money from lender.

My reason for gap was bereavement which I told to both and they both confirmed that lender has agreed to accept it because of my profile and especial reason.

Thanks,
Faraz

I can only speak for us, but if your application weren't successful, you'd get the fee back, so there isn't really a risk of losing it. Similarly, fee free brokers don't get paid unless your mortgage completes, so you'd think they would be confident, however that is not necessarily an indication that there will be no issue.

[sirja]

I used CMME, 2 years ago, and I've got nothing but praise for them. I tend to feel more comfortable paying for services but that's just me.

[farazfastian]

I understand but is it not also waste of time and money of free brokers if my case is not successful? Why they would proceed with my case if there's a chance of failure? They still have to earn their money from lender.

My reason for gap was bereavement which I told to both and they both confirmed that lender has agreed to accept it because of my profile and especial reason.

Thanks,
Faraz

[rd409]

But why should i go to a fee based broker if they're both doing the same job?
My credit history and profile is good, my current contract is for more than 3 months, only issue is that i just had 3 months gap in last 6 months. Is there a reason to go to a fee based broker?

Free brokers usually recommend the products where they get commission. Whereas the fee based brokers would recommend pretty much everything that is available through brokers. If the provider offers commission to the brokers, then you can ask the brokers to reduce the fees.

I say this as my experience in general, and there must be exceptions. Always remember, if you pay someone, they work for you; if it is free, they work for someone else.

[Mark McBurney@CMME]

Hi Farazfastian,

Would you mind dropping me a PM with your full name so that I can look into this for you? At face value it concerns me that you've been recommended Halifax with a three month gap as, without a good (in their eyes) reason, they will not lend based on day rate if you have had more than a 6wk gap in the last 12 months?

Thanks

[farazfastian]

No I don't, my company is hardly 3 months old. Yes I meant lenders with same products offered by both brokers.

Thanks

[Mark McBurney@CMME]

Both of them suggested same lander with the exact same products which are Halifax and Scottish widows and it's based on day rate.

Thats why I'm inclined to no fee broker.

Thanks
Faraz

Do you have limited company trading accounts?

Halifax and Scottish Widows are run as two separate lenders entirely, by the way, with different products.

[farazfastian]

Both of them suggested same lander with the exact same products which are Halifax and Scottish widows and it's based on day rate.

Thats why I'm inclined to no fee broker.

Thanks
Faraz

[Mark McBurney@CMME]

But why should i go to a fee based broker if they're both doing the same job?
My credit history and profile is good, my current contract is for more than 3 months, only issue is that i just had 3 months gap in last 6 months. Is there a reason to go to a fee based broker?

I would say in your situation you'd need to check which lender both have recommended as, off the top of my head, provided you're actually being placed on contract rate, rather than limited company accounts (for example) a three month gap would be outside of policy for every single lender who has a contractor policy, so it would need some sort of sanction. Halifax, as an example, will 100% not lend based on day rate in your situation (they're a stickler for gaps).