What do you get from a mortgage broker?
More and more people are turning to intermediaries to help them find the right home loan. But both fees and standards of service can vary hugely
Sunday 06 August 1995
Long gone are the days when you could walk down any high street in the country and find that virtually all building societies and banks offered the same rates of interest on the same terms. Now the choice is overwhelming.
The same survey showed that eight out of 10 first-time buyers were confused by the range of mortgages. Only half the 1,667 borrowers questioned knew what a repayment mortgage was, while six out of 10 understood the difference between endowment and repayment mortgages.
No less than 72 per cent confessed to not really knowing what was going on when taking out a mortgage. Barclays' mortgage supremo, Gary Skelton, said the survey's figures were "worrying and that the whole industry needs to sit up and take notice".
Borrowers are also worried about the risk of being locked into loans by stiff redemption penalties if they take up the many special offers available, and about the possibility of losing their jobs, falling ill or finding themselves in negative equity.
The situation should be tailor- made for mortgage brokers, who should be able to cut through the verbiage and help clients to get the best deal available.
One of the few building societies to work only through intermediaries is the Surrey-based Mortgage Trust, which was recently acquired by the First National Building Society of Dublin, Ireland's largest and oldest building society.
Chris Heard, Mortgage Trust's managing director, emphasises the importance of having "independent advisers who have the experience and dedication to work tirelessly on a person-to-person basis to successfully negotiate a mortgage which meets all the requirements of the borrower. Buying a house can still be one of the most traumatic transactions we ever undertake, and arranging the mortgage is a major aspect."
He explains that Mortgage Trust sets about finding its professional mortgage advisers by "checking they are authorised by the personal finance services watchdogs or, where accountants and solicitors are used, by their relevant registered professional institu- tions. We also conduct our own investigations into the backgrounds of our potential business advisers.
"What we require are professional mortgage advisers whose integrity and ability have been thoroughly checked out and tested, and will therefore be able to give borrowers the specialist help and guidance that they so sorely need now."
Barry Edwards of Reeves Financial of Horsham, West Sussex, says that mortgage brokers will charge a fee for arranging a repayment mortgage where no commission is payable. That reflects a rapidly growing trend now that commissions have to be disclosed. "The fee is negotiable," he says, "and will depend on the amount of work involved. But a straightforward search for the best repayment mortgage available, relevant to the borrower's financial criteria, and making all the arrangements could cost as little as pounds 250.
He adds: "It could eventually save a lot of heartache and perhaps even the roof over the borrower's head."
Investment-type mortgages, such as those linked to endowment policies or PEPs, pay a commission charge. But even here, Mr Edwards reports a growing tendency to negotiate.
Top Un: North Korean dictator Kim Jong-Un is Maverick as he poses with all-female pilot crew of the Anti-Air Force Unit
Belle Knox: How the porn star student from Duke University became bigger than Justin Bieber
Top 10 most expensive cities in the world: Singapore named costliest place to live – but what about London?
Oscar Pistorius trial: Athlete 'cheated on me' with Reeva Steenkamp, former girlfriend Samantha Taylor tells Pretoria court
Channel 4 announces two-hour TV show to be broadcast 'Live from Space' later this month
Apple's Tim Cook: Business isn’t just about making profit
Thousands of young people forced to go without food after benefits wrongly stopped under 'draconian' new sanctions regime
Ukraine crisis: New navy chief 'defects' and surrenders Crimean HQ as Putin claims ultranationalists forced intervention
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Ukraine crisis: Russia dismisses '3am ultimatum' as 'total nonsense'
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
- 1 The future of sex: The first female condoms were derided, mistrusted and shunned - but will their modern counterparts catch on?
- 2 South African rhino finally put down after roaming Kruger park for days with horn hacked off and bullet in brain
- 3 Italian pensioner hires an escort who turns out to be his son's girlfriend
- 4 Orgasm machine to deliver climax at the push of a button
- 5 Liam Neeson turned down James Bond role to marry Natasha Richardson
iJobs Money & Business
£12000 per annum: Inspiring Interns: The company works with Tier 1 FTSE 100 Ba...
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...