Mortgage application with Broker

Conman1

Hi guys, looking for a bit of advice. I have started tentative inquiries about applying for a mortgage for a self build project. I noticed the following text within the documents given to me by a financial advisor:
"Mortgage Business is time consuming and on occasion many applications have to be made to varying institutions in order to receive a Loan Offer. This is particularly the case at the moment in times of strict Banking credit policy. As a result we charge a fee of €500 for every mortgage application placed. Once the Loan Cheque is drawn down by us, this fee will be refunded in full."
Is this the norm now within this area, ie the charging of €500 per application made? This has put me on red alert. Any thoughts on this gladly accepted. Im a bit green when it comes to this kind of thing. Thanks

Ogham

Just go to the banks yourself - it's not difficult. Save yourself some money.
A few hours of form filling to save €500. Nearly a weeks wages.
The brokers won't get you better rates (you may even get better rates by going direct).

Antoennis

Ogham wrote: »

Just go to the banks yourself - it's not difficult. Save yourself some money.
A few hours of form filling to save €500. Nearly a weeks wages.
The brokers won't get you better rates (you may even get better rates by going direct).

This is not exactly true. There are some banks lending at very good rates that only work through brokers. ie KBC home loans. Though i don't agree with charging for mortgage applications. I am a broker and would know from the application stage the likely hood of it being granted. In my opion the op should shop around different brokers. Must brokers will only charge a fee if they do get the loan offer and the client does not go ahead. Brokers will/should also let you know the pit falls the banks are looking at.

Andymfinancial

i agree with last post. I am also a broker but we only charge a fee if the applicant backs out at the last minute. Find a broker who doesnt charge.

tHE vAGGABOND

Yea, use a broker as your application will go to a number of places at once, if your lucky it will go to many..

But dont use a coyboy like the one you listed above. Im sure there are brokers who will bite your hand off in this day and age. Ask around family, friends etc - and see if there is one local to you who you know others have used.

I used a broker to get my mortgage [few years ago now], and never paid a penny. You don't pay a penny, as they get paid a fortune in commission from banks if you take out a mortgage via them.

Andymfinancial

re; last comment, a lot of brokers arent interested in mortgages anymore because the commissions are so poor. Some banks dont even pay anything! The work involved in a mortgage is huge.

Ogham

Andymfinancial wrote: »

re; last comment, a lot of brokers arent interested in mortgages anymore because the commissions are so poor. Some banks dont even pay anything! The work involved in a mortgage is huge.

In another thread you are recommending people to go to brokers to get the best mortgae deals - yet you admit here that a lot of brokers aren't interested in mortgages because the commission is poor from some banks. I don't think people can ever be sure a broker is actiing in their best interest when one lender pays more commission than another. I would prefer a broker that charges a flat rate , gets you the best mortgage (and proves it is the best in writing) and gives you back any commission he/she earns.

Antoennis

Ogham wrote: »

In another thread you are recommending people to go to brokers to get the best mortgae deals - yet you admit here that a lot of brokers aren't interested in mortgages because the commission is poor from some banks. I don't think people can ever be sure a broker is actiing in their best interest when one lender pays more commission than another. I would prefer a broker that charges a flat rate , gets you the best mortgage (and proves it is the best in writing) and gives you back any commission he/she earns.

Like every business there are good and bad brokers. Most not all brokers want to do wants best for clients as we want referral business. The commission has been cut to all brokers for some its not enough as they are used to getting paid more so they stop doing mortgage business.

I think we get paid enough for the amount of work we do. Don't get me wrong its a fair bit of work between knowing credit policy and different banks policies however its not rocket science. As regards charging a fee. I don't agree as it could put off customers that don't want to pay a fee. Any good broker will show the range of mortgage rates to the client and if their mortgage is not the cheapest one explain to the client why it hasn't been done with that bank. At least that way the client knows they got the cheapest mortgage regardless of commission.

I would have no problem charging a client a fee if thats the way they want it and refunding commissions. However the fee would be agreed before we do any business and there would be no guarantee that the commission refund would be more than the fee agreed.

People should also go to a broker that has been recommended by someone that has used their service and was happy with the result.

Speculator

Why should you use a Mortgage Broker?

Whether you are planning to buy a property in Ireland, or remortgage your existing one, we believe that it's important that you get professional mortgage advice from an independent mortgage broker.


Why should you use a mortgage broker, rather than getting a mortgage directly from my bank?

1. If you speak to your bank about getting a mortgage, they will only recommend one of their mortgages... they are unlikely to tell you if you can get a better deal from the building society or the bank down the road!!!

2. There are so many more options available in the Irish Mortgage Market than there were even a few years ago - but generally speaking, each lender will offer some options but not necessarily all the available options.

For example:

• Does your bank offer current account or offfset mortgages?
• Or cheque book mortgages?
• Can you take a payment break from your mortgage?
• Will it be expensive to top up your mortgage in years to come?
• Can you pay only the interest on you mortgage, in the first year (or number of years), since you'll have the additional costs of furnishing your new home?

Unless you deal with a mortgage broker, or do a lot of research yourself, it's difficult to compare mortgages from one lender with another, as you aren't always comparing like with like.

More importantly, good Mortgage Brokers spend a lot of money to ensure that their information is up to date, so they can recommend the best mortgage deals to you.

3. Will your lender offer you a big enough mortgage?

Lending criteria varies significantly from one lender to the next, so even if your bank won't lend you enough money, it doesn't mean that another one won't.

It's not unusual for one lender to be willing to offer a mortgage of €50,000 - €100,000 more than one of their competitiors.

It's just that different lenders have different preferences, so while one lender may see you as a 'dream client', another lender may see you as a risky one.

One of the central jobs of mortgage brokers, is to find you a lender who will offer you a big enough mortgage for the property you are interested in.


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