Mortgage - use a broker or not

obi604

looking to get a mortgage

Is it better to:

a) just do it yourself, ring the banks and get a mortgage

b) go via a broker due to their extra knowledge of things

Kurooi

Both options are viable. I wouldn't dismiss tied brokers anyway (they get paid commission, so can handle you free of charge)

Brokers are extra valuable in tougher applications, if you're buying to invest, or you're single, or don't have permanent employment. Banks quite often won't quite sort you out and the experience will be frustrating. Having someone do that for you and push things along is awesome.

But if your application is a simple one, over the counter standard FTB stuff, you might as well go alone. Unless you just want a bit of advice and support.

Either way start by checking rates and determine which banks you want to try with.

herbalplants

https://www.boards.ie/discussion/2058279515/mortgage-use-a-broker-or-not

You can do both. Get a broker and apply yourself. No harm.

rob316

If its a simple application and your just a bog standard PAYE worker, do it yourself. Broker is way to go for anything more complex regarding income.

JohnnyChimpo

I'd say a no-fee broker all the way. Even though I basically just gave my broker a list of the rates I was looking at, it was nice peace of mind for him to confirm that I was pursuing the best rate available for my circumstances. And then he was good at chasing up the final bits of documentation, all very straightforward submitting on to their online portal and then they get sent in one packet to the bank. And after our first 2yr fix was about to expire it was easy to get back on to them and arrange a swap to a new lender

howiya

Also used a broker instead of applying direct. Relatively straightforward application but just found it easier dealing with a person. Lots of posts on here wondering about bank time lines and processes etc. We always knew where we stood and if we had a question it was answered fairly quickly.

o1s1n

Broker will be up to date with the best options currently available to you, so as long as they are no fee then it really doesn't hurt to contact one.

I used GMC Mortgages for my last property purchase and they were great.

PSFarrell

Ive done both and a no fee broker is handy. They'll know the best rates and are usually quick coming back

JohnnyChimpo

https://www.boards.ie/discussion/comment/120115912#Comment_120115912

Same

obi604

https://www.boards.ie/discussion/comment/120116209#Comment_120116209

just for clarity, what do you mean by a no fee broker?

how do they get paid

JohnnyChimpo

https://www.boards.ie/discussion/comment/120116266#Comment_120116266

They get a percentage of the total mortgage repayment cost from the bank as commission, typically about 1% I believe

obi604

https://www.boards.ie/discussion/comment/120116309#Comment_120116309

if they are getting a percentage, will they not just try and do the best for themselves as opposed to the client . if they pick mortgage X, they get more money for themselves but not necessarily better for the client. maybe im being over suspicious but when I her of commission etc

DublinDilbert

Based on experience last year, if you have a regular straight forward application don't touch a broker. It is just a numbers game to them, they will string you along and only a certain number will get across the line. They weren't even offering advice on different options and green mortgages etc.. Definitely not worth the added stress. A bank has a reputation to try and uphold, mortgage brokers don't really. I have purchased property before and last year was the first time using a broker and never again.

howiya

https://www.boards.ie/discussion/comment/120116309#Comment_120116309

One thing to be wary of here is that banks will claw back commission from brokers if you redeem your mortgage early eg. if you switch within two years of drawdown. Consequently brokers may have it written into their terms of business that they can pursue you for the forfeited commission. In the case of the broker we used its first three years but our fixed term is longer than that and we've no plans to switch any earlier than the end of the fixed term so not an issue for us.

JohnnyChimpo

https://www.boards.ie/discussion/comment/120116370#Comment_120116370

Quite right, in our case it was 2 years. I wouldn't use a broker if you're planning on some sort of rapid-switching shenanigans.

To the other point, yes it's clear that there are perverse incentives at play here and brokers may indeed be incentivised to drive you towards certain lenders. But it's a regulated market and they're required to provide you options, as well as a "Reason Why" letter. No doubt there are underhanded or waste-of-space brokers out there. Like I said in my previous post, I approached the broker knowing exactly what rate I already wanted and had a spreadsheet tabulating all the pros and cons and amortising cashback into the percentages, etc., which probably helped me not get the run-around from the broker. I would advise anyone to do similarly, since this is the largest financial transaction you'll probably ever make you maybe shouldn't just completely outsource it to an intermediary and assume everything will work out in your best interests.

But again, I did my homework, and the broker was convenient, helpful, and a useful intermediary with bank and solicitor to keep the whole show on the road. You still have to chase everyone involved.

squidgainz

https://www.boards.ie/discussion/comment/120116337#Comment_120116337

All the banks give the same commission.

o1s1n

https://www.boards.ie/discussion/comment/120116348#Comment_120116348

Sorry you had such a bad experience, that sounds awful.

I suppose the thing is if you're going straight to a bank you have to be somewhat clued in on what the best current offers are. Some folks might be up to the task, others might not be so much.

A good broker really is a brilliant thing to have - major emphasis on 'good' though. Recommendations are the name of the game here. I'd say a bad one could really lead you down the wrong path alright.

Brego888

Used a broker for my first house purchase as didn't feel massively confident in doing it myself.

Bought subsequent house and moved mortgage a few times without once since.

obi604

https://www.boards.ie/discussion/comment/120116309#Comment_120116309

would one be as well off just paying them a fee?

GuinnessSupper

https://www.boards.ie/discussion/2058279515/mortgage-use-a-broker-or-not

I went with option a). Rather than ringing around, I recommend just going on a comparison website (e.g. bonkers) and see what are the best rates going for your circumstances - it will take into account things like LTV, BER rating. Once you've determined the best rate, I would get in contact with that lender.

I would caveat that it was AIB who were cheapest when I applied, and they were a dream to deal with directly. Very responsive, and I never had to meet them once in person as everything is managed through an online portal, of if you've a question you can pick up the phone and chat with someone. However I've heard that BOI are not at all good to deal with and can be unresponsive, which is where a broker can come in handy. But overall I wouldn't recommend a broker, on the basis it is adding an extra layer of complexity to an already stressful process.

o1s1n

https://www.boards.ie/discussion/comment/120119484#Comment_120119484

Kind of missing the point of a broker though - it's to take some of the stress out of the experience, the very opposite of adding extra layers of complexity.

You give them all the information for the process and then they go and find you the best deal and work with the bank to finalize the deal, you don't have to worry about any of it.

Honestly it's the biggest financial decision a lot of people will make in their lives, to have someone to support you through it (and for free) seems like a bit of a no brainer.

GuinnessSupper

https://www.boards.ie/discussion/comment/120119776#Comment_120119776

If you are a straightforward application - FTB, full time worker, not looking for exemptions - then finding the best deal for you can be done in 10 minutes online. And that saves you having a middle man for contact with your lender throughout a possibly year long process. As I said, my lender was very efficient in responding and keeping me in the loop. If for every contact made, I had to get onto a broker, they get onto my lender, and I've to wait for them revert back to me, that is what I mean by extra layer of complexity, though perhaps I should just said it is less efficient. And this is assuming your broker acts immediately on any queries or requests, which they probably won't if they have multiple clients.

All that said, it really depends on the OP's circumstances.

jaffaD

Some lenders are only available through brokers. Pretty sure Avant are only available through a broker

herbalplants

https://www.boards.ie/discussion/comment/120120613#Comment_120120613

Yes Avant only through brokers.

obi604

https://www.boards.ie/discussion/comment/120122370#Comment_120122370

is there something special about Avant?

JohnnyChimpo

https://www.boards.ie/discussion/comment/120122404#Comment_120122404

They're a newer entrant to the Irish mortgage market, backed by a Spanish bank. In the last few years, they've had probably the most competitive rates, and they do so by de-risking their mortgage portfolio - they only work with selected brokers, they don't give out salary exceptions (I think), and are more stringent in how they stress-test the buyer's ability to repay.

Suit of Wolves

https://www.boards.ie/discussion/comment/120115073#Comment_120115073

But I'm told the broker will find the bank that will give you the best interest rate, even if you are a bog standard PAYE worker?

Suit of Wolves

https://www.boards.ie/discussion/comment/120115912#Comment_120115912

So is a no-fee broker better than a fee broker? Are no-fee brokers doing some sort of community service or something?

Suit of Wolves

https://www.boards.ie/discussion/comment/120116209#Comment_120116209

How much did the broker cost?

Suit of Wolves

https://www.boards.ie/discussion/comment/120116348#Comment_120116348

Heard a 'ask the expert' piece about mortgages on Pat Kenny recently, and the dude was pushing for people to go to a broker. I suppose the idea that they're better is that they're in communication with lots of private banks, so have a huge number of options to choose from in order to find what's best. But that doesn't mean you've any idea why they come to choose one particular bank.

Suit of Wolves

https://www.boards.ie/discussion/comment/120116420#Comment_120116420

How much did the broker make out of it?

And how much did the solicitor make? 1-2% of the total value of the house?

Suit of Wolves

https://www.boards.ie/discussion/comment/120115263#Comment_120115263

So a no-fee broker charges the bank commission in return for bringing a new client to that bank, and therefore the client doesn't need to pay the broker?????

extra-ordinary_

yes

SharkMX

Used a broker. They moved everything on and kept the show on road when things started to get wobbly and all we had to do was just get what we were told, when we were told.

They didnt charge us a fee. They got commission from the bank we ended up going with. We had already looked at the choice of banks and rates at the start before we went to the broker and then they got us the one we asked for.

They did sell us mortgage protection insurance, so im sure they got a commission for that too, but I had already looked around and they still had the best offer on that so went with them.

dubal

My experience with a broker was mixed, its great if they do multiple applications for you, but they don't like to do too many - as its double work and they only get one commission. Though the second one was much easier as they had records already.

When we were under pressure for time, putting pressure on a broker to put pressure on the bank was more problematic as we were one step removed. We found on a few occasions the message to the bank got muddled going via a broker.

Originally we were going with Avant who were broker only, so we had no choice anyhow.

In the end we were a fairly simple case and if we didn't need to use Avant we would go direct again.

JohnnyChimpo

https://www.boards.ie/discussion/comment/122385763#Comment_122385763

That's mostly a matter for the broker and the bank to figure out but I think it's usually around 1%.

Solicitor idk I think I paid like €1500, it doesn't really scale linearly with the cost of the house

Luckylow10

I have used a broker, and I regret doing so. I went on the recommendation of a family member. I stuck with them as I didn’t want to start the process again and delay matters further.

I naively thought they shop around for the best offer or for special rates, and got things done faster, etc, but all they did was provide me with the different interest rates of all the banks and ask me which one I’d like to apply for and how much I could ask for mortgage wise.

I found it just adds to delays, everything has to go through them, all document uploads.

if the broker looking after your file is out sick or on annual leave or works part time, well nothing will be done on your file. For example, they asked me to upload a statement, I do it straight away, but they wouldn’t send it on to the bank for a few days. This can add to significant delays especially if the banks keep coming back looking for more information.

in the future I’d cut out the middle man completely and go direct to the bank.