Key Post Advantages and disadvantages of using a mortgage broker

Brendan Burgess

Brendan Burgess

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Draft post - to be updated based on feedback

Reasons for not using brokers

Brokers no longer have access to the cheapest mortgages

The lowest mortgage rates are from AIB which does not make these rates available to customers who apply through brokers:
Which is the cheapest lender?

So, if you meet AIB's criteria, you should apply to them directly.

Some brokers charge a fee
If they charge you a fee and give you the best advice, then that is fine. But do you really need advice?

Some brokers have a clause that if you switch within [5] years, you must pay them a fee
If your broker arranges a mortgage with, say, KBC and you later switch, the broker will have to refund part of the commission they have earned. The broker's contract with you may specify that you must reimburse the the refunded commission to the broker.

Some brokers may not act in your best interest
A broker may well recommend a lender based on the commission that they earn and not on what is your best interest.

Some brokers are not very good
They might be honest, but they don't really understand the market.

Some are just as easily conned by the Bank of Ireland's 2% cash back as many punters are.


Reasons for using a broker

A broker is most useful if you are a borderline or a difficult case
If there is a chance that you might not get a mortgage, a broker is well placed to advise you not to apply just yet. They may help you to plan for an application in 6 months or a year.

Pepper deals only through brokers.

A broker can help you with the paperwork.
But they can also just add an extra layer of bureaucracy. You send the stuff to a broker and they don't get around to sending it on to the lender.


Conclusion for most people - apply directly to AIB and only use a broker if AIB turns you down.
 
Hi Brendan

I have had a very positive experience with a broker. The advice that he was able to provide regarding preparation for the application. Access to the banks' internal mortgage calculators. Having an advocate between me and the bank. Plus I'm busy and don't have time to do the legwork. And ultimately, I don't pay him...the bank do.

Regards

Gordon
 
Is it not a bit strong to describe the BOI cash back offer as a "con"?

The terms of the offer are transparent and I would imagine it suits a lot of applicants that are struggling to meet deposit/LTV requirements or the various other costs associated with purchasing, renovating and/or furnishing a property.
 
I also have had a very positive experience with using a Broker and a very negative experience in 30 years banking with AIB

I have never been able to get a mortgage with AIB, been refused twice, and have since got Mortgages with other banks
 
Sarenco said:
Is it not a bit strong to describe the BOI cash back offer as a "con"?

The terms of the offer are transparent and I would imagine it suits a lot of applicants that are struggling to meet deposit/LTV requirements or the various other costs associated with purchasing, renovating and/or furnishing a property.
Click to expand...

I think that this comment shows the problems in using brokers.

If I were a broker, I would not let any customer deal with Bank of Ireland, if they had a choice.
If Sarenco were a broker, he would be happy to recommend them.

One of us is wrong. If you go to a broker, you will get no second opinion. The benefit of going directly and checking your ideas on askaboutmoney is that you can get the diversity of opinions.

So as not to take this thread off topic, I have copied your comment on BoI to this thread, where we can discuss the substance of the issue.

Evaluating the Bank of Ireland 2% cash back
 
Should this thread be updated to use EBS instead?

Maybe even replace the bank name with a link to the best buys thread that stays updated.
 
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