Broker Queries

[ThatNewGuy]

Hi all,

Looking at FTB >80% mortgage, possibly via broker, and just have a couple questions if anyone knew the answer;

- For brokers whose fees are paid by the bank and not by you, are these a common level of fees across all banks or does it vary by bank to bank, or even by broker to broker? i.e. would a broker be "incentivised" to go with one bank over another based on fee rates, or do they publish what they're getting from where?
- Are fees typically based on the face value of the loan, or on the cost of the loan which includes interest rate i.e. could they push you to a higher interest rate with another bank based on other perks, but they themselves are getting more from a higher cost of loan?
- I think I read BOI don't currently go through lenders, but might do sometime this year. Is this true, and are there any other lenders that also dont use brokers? Or more directly, which banks can brokers get a mortgage with?
- Would they be affiliated with any banks or do they tend to treat all bank entry channels the same?
- Anything else to watch out for?

I guess the only other question is whether it is worth using a broker if BOI isn't offered given their current relative attractiveness for FTB vs all other banks?

Thanks

 

[RedOnion]

Fee is based on a % of drawdown value.

There is a difference between banks, and some will have volume incentives (e.g. 0.5%, increasing to 0.75% if more than 5m new loans drawn).

When you first speak with a broker, ask them which banks they deal with.

All banks, except BOI, deal with brokers, but not every broker. BoI will re-enter the broker market this year, but have not announced a date. Again, a broker might be able to tell you as they'll have communications from BoI.

I know some people go to a broker, and separately to BoI directly.

Given that interest rate changes are happening quickly, this might be a good approach, so you've approval for whatever best rate is when you get to draw down.

 

[ThatNewGuy]

Thanks, that's very helpful. Sort of compromises a broker's Independence really if that's the case! I would still value their wider knowledge and advice in going through the process so will explore that avenue anyway, but hadnt thought of the dual strategy so might look into that as well.

 

[Blackrock1]

Mortgage applications arent that difficult and you will get decent advice on here comparing offers, unless you have very specific circumstances brokers arent really necessary.