New Mortgage Application - Using a broker

SeanoChuinn

Good day all. I've just been made full time in my job which allows me to start applying for mortgages with my wife also now in full time employment.
I understand there are lots of prerequisites prior to getting mortgage approval or even starting the application. This is NOT about those requirements.
My question is would it be worth going to a broker and letting them do the work for us to try get the best mortgage possible. Or are brokers somewhat like financial or investment advisers and will try to steer you in the direction they want you to go for their own commissions? We don't mind doing the work, but with the time required off work to go to various financial institutions and the understanding necessary to get the best deal maybe we'd be better off to let a broker do this for us??
The broker we have in mind is a local guy, in business a very long time and we've heard nothing but good stories about. We realize over a long term mortgage the savings in getting the best deal now can be quiet significant and possibly worth the broker fees.

Any thoughts very welcome.

PaulM1977

There are 6 lenders in the market at the minute, if you are paying him a fee for his service, make sure you get a copy of the official approval from each of the lenders or if they are not willing to give you a mortgage then confirmation of this in writing from that lender. If the broker is acting in your best interests he should have no problem complying and getting this for you.

Query the commission he will receive for each lender too, they all pay the same except PTSB who pay more for a lower LTV on a mortgage as their risk is reduced.

SeanoChuinn

Thanks Paul, he charges a single charge for the service he provides e600. This includes the application process all the way to the individual payments through out the build process. I don't believe there is a different rate he charges for different lending institutions. He did say he does charge a different rate though for house purchases and house builds, with house builds being slightly higher as there is more logistics work involved.

iainBB

SeanoChuinn wrote: »

Thanks Paul, he charges a single charge for the service he provides e600. This includes the application process all the way to the individual payments through out the build process. I don't believe there is a different rate he charges for different lending institutions. He did say he does charge a different rate though for house purchases and house builds, with house builds being slightly higher as there is more logistics work involved.

I went with a broker no charge. Broker was linked to 3 major bank 2 of which I wanted to go with
( checked rates myself )
Highly recommended as we got refused by one one on Friday and by Monday application was in with next back.

Would not pay for the service.

angeldelight

We're currently in the process of buying a house and have used a broker. I can recommend 100%, he got us a LTI exemption which we ended up not needing and he was able to convert it to a LTV one after we went sale agreed thus saving us paying a bigger deposit. No charge, he's on commission from the bank

SeanoChuinn

Ok so looks like commissions are how they generally operate. This guy has given a fixed rate so far to us Would it be possible to know where your commissions costs ended up coming in? I'm guessing that of course would depend on the value amount of the mortgage you looked for. I assume the people who said there was no charge meant they didn't pay directly, but the bank included a brokerage fee? Can't see how they are doing business if there was no charge or some kind of fee. Thanks everyone.

angeldelight

The broker gets a commission from the bank, the consumer doesn't pay anything for their services

SeanoChuinn

Ok I'd always assumed broker was independent of banks and trying to get the consumer the best possible deal and the consumer paid for that service either by a fixed agreed fee or a commission. Rather than being driven and paid by the banks to get consumers to sign on with one particular bank? Confusion on my part as to the brokers role here I guess.

hurikane

There's a broker who posts on here. He's very good, I'll pm you his details. He doesn't charge a fee.

phormium

Are all the banks again dealing with brokers? If not then your options are limited to the ones that pay commission. Personally I'd nearly prefer to pay a flat fee and get truly impartial advice.

You're not going to get any better deal rate wise or anything by going through a broker, they just save you a bit of time and hassle.

Maybe find out which bank has the cheapest rate and apply there first yourself.

angeldelight

The only ones who don't deal with brokers are BOI but they've one of the hoghest rates so we were happy enough not to go with them

SeanoChuinn

I had been working long term as a contractor we didn't bother going to talk to individual banks other than BOI as they were the bank I'd used in the past, just to get an understanding of what the mortgage requirements were. We have just returned from living abroad also, so had just resumed dealing with BOI rather than trying other banks for general banking needs. I did realise that BOI were the worst bank at the moment for mortgages. So we've no issue not dealing with them also. At least we have a better understanding now after reading the posts here. Who currently is the best bank for mortgages from a general rates point of view etc. at this stage?

PaulM1977

He sounds pretty transparent with the service he provides and he also comes highly recommended so they sound like a good option for you.
Best of luck with it all.

SeanoChuinn wrote: »

Thanks Paul, he charges a single charge for the service he provides e600. This includes the application process all the way to the individual payments through out the build process. I don't believe there is a different rate he charges for different lending institutions. He did say he does charge a different rate though for house purchases and house builds, with house builds being slightly higher as there is more logistics work involved.

PaulM1977

If you are dealing with a broker then the broker arm of AIB/EBS which is called Haven, are the best for rates. They all have the same rates at present, rates may come down in the coming months so you might want to see about a variable rate and not just a fixed rate.

SeanoChuinn wrote: »

I had been working long term as a contractor we didn't bother going to talk to individual banks other than BOI as they were the bank I'd used in the past, just to get an understanding of what the mortgage requirements were. We have just returned from living abroad also, so had just resumed dealing with BOI rather than trying other banks for general banking needs. I did realise that BOI were the worst bank at the moment for mortgages. So we've no issue not dealing with them also. At least we have a better understanding now after reading the posts here. Who currently is the best bank for mortgages from a general rates point of view etc. at this stage?

Trish56

There really should be no reason to pay a fee to a broker to process your mortgage application as previously stated if the mortgage issues the lender pays the broker commission. The only lender that I am aware of that do not deal with Brokers are Bank of Ireland and they have the highest variable rate at 4.50%. The cheapest variable rate offered at the moment is AIB at 3.50%, Haven is the broker arm of AIB and they have not yet announced a 0.25% reduction to bring their variable rate down to 3.50% however I have been informed that the reduction is due to be announced any day.

If your mortgage is a self build, KBC do not offer self build mortgages so there are only a handful of lenders to choose from. All these lenders have different criteria and policies in how they deal with self builds and a good broker will recommend the one that suits your circumstances. For instance AIB/Haven will allow you pay interest for the length of the build or 1st year. Also a big consideration would be that both AIB/Haven treat their existing customers regarding rates the same as new customers unlike BOI, permanent tsb and Ulster who have blatantly refused to reduce variable rates for existing customers over the last 5/6 years.

If you want to save yourself €600 go directly to an AIB branch or find a broker who do not charge fees and there are plenty of them around the country. At the same time if you think your broker is good value at €600 then best of luck with your application.
Trish

SeanoChuinn

Thanks Trish, yeah at this point makes no sense to invest e600 for something we can get for free. I've been away for 6 years, have loyalty towards getting the best deal rather than to a bank. I'll speak with some other brokers and maybe even Haven directly. Thank you all, this has been great information for us!!

Trish56

Hi Sean,
You can only deal with Haven through a broker so your best bet is to go directly to an AIB Branch or deal with a broker who do not charge fees. You can get the names of regulated brokers on the Central Bank website. A good broker should make the process as simple as possible as self builds can be a bit complicated and sometimes mortgage advisors in the Banks can be lacking experience.

If you need a list of the documents required I can list them here for you so that you have everything to hand when applying.
Trish

SeanoChuinn wrote: »

Thanks Trish, yeah at this point makes no sense to invest e600 for something we can get for free. I've been away for 6 years, have loyalty towards getting the best deal rather than to a bank. I'll speak with some other brokers and maybe even Haven directly. Thank you all, this has been great information for us!!

SeanoChuinn

THANK YOU Trish, that would be a great help!

Trish56

Documents you need for a self build are as follows :
Salary certificate completed by your employer. These are usually on the lenders standard income certs.
P60 for 2015
3 months recent payslips
6 months recent current account statements
6 months recent savings statements
6 months recent credit card statements
Copy of Passport or drivers licence
Copy of planning permission
Utility Bill - recent ESB/Gas/Telephone, bank or visa statement in your current address.
Letter of Supervision for self build including detailed costings from your supervising Architect/Engineer. This is usually issued by the specific lender however you should base your construction costs on minimum €85/90 sq.ft outside of Dublin area and add on 10% for contingency plus Solicitor/Architect/professional fees, ESB and water connection fees to arrive at the overall project figure. You did not mention if you are getting a gift of a site or not and if so you will need a gift letter.
Copy of Professional Indemnity Insurance for supervising Architect/Engineer.
As you were away for the last 6 years you may have to get a credit report from Experian.

Trish

Trish56

Haven Mortgages announced today a rate reduction of 0.25% bringing their loan to value variable rate to 3.50% for those borrowing over 80% to 3.50%, loan to value between 50% to 80% = 3.30% and less than 50% loan to value = 3.10%.

Reductions to take effect from 19th July. Existing customers rates will also reduce by 0.32% from August. Switchers will also get 2k cash to switch.

Nice to see rate coming down at long last.