Looking for a Mortgage

[belly]

re-mortgaging isn't a get out clause. It's simply another debt being added onto the one u already have(whether competitive or not!), a bit like taking out a loan or having a credit card bill u really can't afford!

 

Not necessarily true, it is about finding the best rate for the mortgage you already have. My mortgage rate is changing from what I am currently on to 7%, just got a remortgage with no increase in funds or length of mortgage, and the rate is 5.84% fixed for 2 years.

[gavsmith]

Not if the broker doesn't charge a fee

 

I get the feeling this could be tit for tat here

 

There is mutiny on the bounty in mortgage broker land about lenders now offering different priced deals to direct customers compared to brokers as they see it as a threat to their jobs.

 

The fact that a broker does not charge a fee does not make any difference as the deal the lender offers the direct customer does not pay commission.

 

The FSA's view on this is that it does not think there is anything wrong with it however brokers need to make each client aware that there may be cheaper equivalent deals by going direct to the lender.

[gavsmith]

Love it, if it means clients get treated more fairly then I'm all for it mate.

 

But you could have just called it TCF

 

*Edit* Just found the report if anyone's interested http://www.fsa.gov.uk/pubs/discussion/rdr_interim_report.pdf

 

You love it? That's interesting as it's received a lukewarm reaction (at best) from most people.

 

IMHO, in principle it sounds good, higher qualified intermediaries (it will see a significant rationalisation of the number of companies), however more significantly it will see the end to commission being paid to the intermediary from financial institutions.

[LizzyHearts2]

Thanks for that. The thought never occured to me.

 

 

Love the sarcasm! If u had to deal with what i deal with on a daily basis, u wudn't be so! And yes, i have become very cynical and harsh over the last few months and it angers me that people who take out mortgages that can't afford them are prepared to put their pride before their families....e.g young children...i see it every day and these people don't care...and i mean really don't care!!!

[The Old Tolbooth]

You love it? That's interesting as it's received a lukewarm reaction (at best) from most people.

 

IMHO, in principle it sounds good, higher qualified intermediaries (it will see a significant rationalisation of the number of companies), however more significantly it will see the end to commission being paid to the intermediary from financial institutions.

 

I'm not quite sure how you work out that we wont be paid by life companies for introducing biz to them Gav to be honest

 

As for TCF rules and regs, anything that means people get a fairer deal is good in my book, as it means they are being properly advised etc

 

If I cant do something for somebody, then I either walk away, or tell them where to go for what they are looking for, then I write to them explaining what I've done and why I've done it. I hear some horror stories Gav, and to be honest I don't like it one little bit. I hate to think of someone in my line of work ripping off someone else for the sake of a few quid in their pocket, because it taints the rest of us who don't go there.

 

In some instances there are cheaper deals out there for people who go direct to lenders also, deals that I don't have access to because it might be a specific branch exclusive rate that they are promoting for a week or two, however I do have access to deals that branches cant match also, because were part of mortgage clubs who negotiate these deals on our behalf for us, and all we do is join them and take advantage of their rates (which are pretty pants nowadays to be honest). I'd probably say it was swings and roundabouts to be honest mate.

 

So out of interest, what is your line of work Gav?

[LizzyHearts2]

Not necessarily true, it is about finding the best rate for the mortgage you already have. My mortgage rate is changing from what I am currently on to 7%, just got a remortgage with no increase in funds or length of mortgage, and the rate is 5.84% fixed for 2 years.

 

Where i work, it is simply another debt...especially if you are several months in arrears!!! Especially if the second charge is also looking to repossess the property!

Fixed rates mean nowt especially if sumone has several mortgages and i am not talking about 1 or 2!!! I can go on and on, on this subject but it just enrages me that there r so many people out there that r selfish and just do not want to admit they have failed. Don't get me started as i will be here all nite!!!;):p

[The Old Tolbooth]

Where i work, it is simply another debt...especially if you are several months in arrears!!! Especially if the second charge is also looking to repossess the property!

Fixed rates mean nowt especially if sumone has several mortgages and i am not talking about 1 or 2!!! I can go on and on, on this subject but it just enrages me that there r so many people out there that r selfish and just do not want to admit they have failed. Don't get me started as i will be here all nite!!!;):p

 

Oh go on, start, you know you want to

[LizzyHearts2]

Oh go on, start, you know you want to

 

Nah, coz there are those who are in arrears with their mortgage that will never admit it, and will always blame others!, will always beg, and will always promise they will never do it again....my thoughts....AYE RIGHT!! :wacko:

[gavsmith]

I'm not quite sure how you work out that we wont be paid by life companies for introducing biz to them Gav to be honest

 

As for TCF rules and regs, anything that means people get a fairer deal is good in my book, as it means they are being properly advised etc

 

If I cant do something for somebody, then I either walk away, or tell them where to go for what they are looking for, then I write to them explaining what I've done and why I've done it. I hear some horror stories Gav, and to be honest I don't like it one little bit. I hate to think of someone in my line of work ripping off someone else for the sake of a few quid in their pocket, because it taints the rest of us who don't go there.

 

In some instances there are cheaper deals out there for people who go direct to lenders also, deals that I don't have access to because it might be a specific branch exclusive rate that they are promoting for a week or two, however I do have access to deals that branches cant match also, because were part of mortgage clubs who negotiate these deals on our behalf for us, and all we do is join them and take advantage of their rates (which are pretty pants nowadays to be honest). I'd probably say it was swings and roundabouts to be honest mate.

 

So out of interest, what is your line of work Gav?

 

One of the key things in the RDR is that intermediaries will not receive commission from any financial institutions, the intermediary will instead negotiate a fee with the client for the services offered.

 

The reason for this is that the FSA wants to make things more transparent as often the price of a product just now is affected by what commission is paid as each institution needs to make money. The FSA wants to remove the element of doubt that intermediaries can be swayed by who offers the most commission - this does happen and hopefully it's a small proportion of intermediaries however the FSA wants to eradicate this type of practise and it feels that negotiating a fee with a client is the way forward. The removal of commission being paid from an institution to an intermediary should (in theory) make the product more competitive than it was prior to paying commission.

 

The RDR is only at the discussion stage at the moment, so it's not a done deal .......yet!!!

 

Re cheaper deals for going direct, this is happening more and more especially since the credit crunch, a quick mooch through Mortgage Strategy gives you a good idea of the situation and how angry intermediaries are regarding this - comments like 'the lender are biting off the hand that feeds them', 'it's illegal','my livelihood is at stake' are common place. Indeed there has been several petitions/lobbying being done to change this practise. As I said the FSA are comfortable with the situation. These cheaper deals are not necessarily 'branch exclusives' and are across their branch network e.g. HSBC and their 'rate matcher' offering.

 

As for my line of work.........financial

[70's Throwback]

I'm not quite sure how you work out that we wont be paid by life companies for introducing biz to them Gav to be honest

 

As for TCF rules and regs, anything that means people get a fairer deal is good in my book, as it means they are being properly advised etc

 

If I cant do something for somebody, then I either walk away, or tell them where to go for what they are looking for, then I write to them explaining what I've done and why I've done it. I hear some horror stories Gav, and to be honest I don't like it one little bit. I hate to think of someone in my line of work ripping off someone else for the sake of a few quid in their pocket, because it taints the rest of us who don't go there.

 

In some instances there are cheaper deals out there for people who go direct to lenders also, deals that I don't have access to because it might be a specific branch exclusive rate that they are promoting for a week or two, however I do have access to deals that branches cant match also, because were part of mortgage clubs who negotiate these deals on our behalf for us, and all we do is join them and take advantage of their rates (which are pretty pants nowadays to be honest). I'd probably say it was swings and roundabouts to be honest mate.

 

So out of interest, what is your line of work Gav?

 

I'm sure the report you provided the link to detailed how it will work and at this stage Gavsmith is spot on in what he says. As for cheaper deals, you've more or less said what we covered last night but in more detail. However, as Gav says, direct deals are on the increase within the current climate - much to the dismay of a large number of intermediaries.

[The Old Tolbooth]

One of the key things in the RDR is that intermediaries will not receive commission from any financial institutions, the intermediary will instead negotiate a fee with the client for the services offered.

 

The reason for this is that the FSA wants to make things more transparent as often the price of a product just now is affected by what commission is paid as each institution needs to make money. The FSA wants to remove the element of doubt that intermediaries can be swayed by who offers the most commission - this does happen and hopefully it's a small proportion of intermediaries however the FSA wants to eradicate this type of practise and it feels that negotiating a fee with a client is the way forward. The removal of commission being paid from an institution to an intermediary should (in theory) make the product more competitive than it was prior to paying commission.

 

The RDR is only at the discussion stage at the moment, so it's not a done deal .......yet!!!

 

Re cheaper deals for going direct, this is happening more and more especially since the credit crunch, a quick mooch through Mortgage Strategy gives you a good idea of the situation and how angry intermediaries are regarding this - comments like 'the lender are biting off the hand that feeds them', 'it's illegal','my livelihood is at stake' are common place. Indeed there has been several petitions/lobbying being done to change this practise. As I said the FSA are comfortable with the situation. These cheaper deals are not necessarily 'branch exclusives' and are across their branch network e.g. HSBC and their 'rate matcher' offering.

 

As for my line of work.........financial

 

It's funny you should mention HSBC, I lost out on one to them today, they told the client that he had until midnight last night to accept the deal offered or he would lose out, which was a load of pish.

 

If the FSA want to look at bad or poor practice, they should also look at things like that too because I would construe that as misleading the customer to seal the biz.

 

I hope I'm wrong, but I cant see the FSA getting their way with the commission structure being taken away, and then us having to charge clients a fee, there would be some major uproar if that happened within the industry.

 

I totally agree with you regarding brokers choosing certain companies who pay more commission, simply because of the remuneration they offer, it's wrong. The only time I favour particular life companies are when people have health problems, and some companies have a more flexible underwriting criteria.

 

We have a system in place whereby if we place more than 20% of biz with one company, then we get investigated as to why we have done that too, which I think is a very good way of making sure that your doing your research properly.

 

Cheers for your thought and views on certain issues though Gav, it's always interesting to speak to others who work in the industry, although you played it cagey by answering only "financial"

[gavsmith]

It's funny you should mention HSBC, I lost out on one to them today, they told the client that he had until midnight last night to accept the deal offered or he would lose out, which was a load of pish.

 

If the FSA want to look at bad or poor practice, they should also look at things like that too because I would construe that as misleading the customer to seal the biz.

 

I hope I'm wrong, but I cant see the FSA getting their way with the commission structure being taken away, and then us having to charge clients a fee, there would be some major uproar if that happened within the industry.

 

I totally agree with you regarding brokers choosing certain companies who pay more commission, simply because of the remuneration they offer, it's wrong. The only time I favour particular life companies are when people have health problems, and some companies have a more flexible underwriting criteria.

 

We have a system in place whereby if we place more than 20% of biz with one company, then we get investigated as to why we have done that too, which I think is a very good way of making sure that your doing your research properly.

 

Cheers for your thought and views on certain issues though Gav, it's always interesting to speak to others who work in the industry, although you played it cagey by answering only "financial"

 

Yea it's a bit dog eat dog at the moment in the finance industry and there is poor practise across the board from institutions and intermediaries alike.

 

Your 20% rule is commonplace, however like everything it's pretty easy to get around - client circumstances/speed of service blah blah blah.

 

The FSA have not just made the rules of the discussion paper up off their own back John, they have consulted major blue chip companies and intermediary firms. Each of them has differing views of what they want the RDR to look like, funnily enough as they want it to best suit their own business model!!

 

As I said, it might change, but the current thought is that commission will be a thing of the past and the intermediary will negotiate a fee with their client, whether it's for one off advice or ongoing. On the face of it, it makes sense as it means all products in the marketplace will be on a level playing field as the products will be priced without any commission incentives. Essentially what is happening now John is that the customer is essentially paying for a cheaper/better product that they otherwise could have purchased as the commission is built into the price.

 

I guess what I'm trying to say is that the customer may not be any better or worse off if they pay the intermediary a fee as the product will be better priced so the net effect might be the same. However the FSA will be more comfortable as the client has paid you for a service that you have provided them and there is not the issue of commission clouding judgement as all providers will be offering non commission based product.

 

Hope my ramblings make sense!!

 

Gav

[The Old Tolbooth]

Yea it's a bit dog eat dog at the moment in the finance industry and there is poor practise across the board from institutions and intermediaries alike.

 

Your 20% rule is commonplace, however like everything it's pretty easy to get around - client circumstances/speed of service blah blah blah.

 

The FSA have not just made the rules of the discussion paper up off their own back John, they have consulted major blue chip companies and intermediary firms. Each of them has differing views of what they want the RDR to look like, funnily enough as they want it to best suit their own business model!!

 

As I said, it might change, but the current thought is that commission will be a thing of the past and the intermediary will negotiate a fee with their client, whether it's for one off advice or ongoing. On the face of it, it makes sense as it means all products in the marketplace will be on a level playing field as the products will be priced without any commission incentives. Essentially what is happening now John is that the customer is essentially paying for a cheaper/better product that they otherwise could have purchased as the commission is built into the price.

 

I guess what I'm trying to say is that the customer may not be any better or worse off if they pay the intermediary a fee as the product will be better priced so the net effect might be the same. However the FSA will be more comfortable as the client has paid you for a service that you have provided them and there is not the issue of commission clouding judgement as all providers will be offering non commission based product.

 

Hope my ramblings make sense!!

 

Gav

 

It makes perfect sense to me Gav, and I agree with everything you say.

 

The only thing that worries me is that if people are forced to pay fee's for financial and mortgage advice, then it could be the end of the advisory role as we know it, and people will just go direct, which will also result in people getting into a financial mess because they have less clue of what they should be doing with certain products, or how to set them up properly.

 

Take income protection for example, how many ordinary punters know that they can only insure up to 65% (typically) of their annual income, and what deferment period to put on it as a result of what their employer would pay them if off sick for a long period of time etc, it could get messy, with a lot of people having products they cant claim on, or not having products which they actually need because there was no one there to advise them properly in the first place because they think they can save money by going direct.

 

I hope my ramblings are making sense now!

[portobellojambo1]

The only thing that worries me is that if people are forced to pay fee's for financial and mortgage advice, then it could be the end of the advisory role as we know it, and people will just go direct, which will also result in people getting into a financial mess because they have less clue of what they should be doing with certain products, or how to set them up properly.

 

Think the saving grace there John may be that a lot of companies are still loathe to do business with clients on an "execution only" basis, they prefer to deal with clients who have sought the correct advice, and have the business placed through an adviser.

 

Think what gavsmith is talking about, i.e. removing the commission element is the way forward, across the whole financial services sector, and those who are good at their jobs will survive, because clients will use them. Those who are in it to simply churn business will quickly be found out I think, this could prove to be a good opportunity for the smaller players at the moment who are struggling to compete with huge companies, makes the playing field more even i think.

 

From a providers point of view it will also sort out the companies who have survived based on poor products on offer, but good commission rates. In the future the quality of the product, and the quality of advice will be the driving factors, both of which should suit the client.

[gavsmith]

It makes perfect sense to me Gav, and I agree with everything you say.

 

The only thing that worries me is that if people are forced to pay fee's for financial and mortgage advice, then it could be the end of the advisory role as we know it, and people will just go direct, which will also result in people getting into a financial mess because they have less clue of what they should be doing with certain products, or how to set them up properly.

 

Take income protection for example, how many ordinary punters know that they can only insure up to 65% (typically) of their annual income, and what deferment period to put on it as a result of what their employer would pay them if off sick for a long period of time etc, it could get messy, with a lot of people having products they cant claim on, or not having products which they actually need because there was no one there to advise them properly in the first place because they think they can save money by going direct.

 

I hope my ramblings are making sense now!

 

I think there will be different 'tiers' for advice John. Make no mistake though the RDR will change the advisory role significantly. The different tiers will categorise the type of client and you will be restricted to what advice can give them and ultimately restrict what your earning potential will be. You will have different levels of intermediary qualifications for each tier as well.

 

If your doing wealth management/holistic advice and are at the suitable minimum qualification level then you will make good cash!

 

I can't remember the different tiers off the top of my head, however it started with your bottom feeders oops sorry the less financially viable people and the type of advice would be akin to the CAB and the level of qualification required for the intermediary will be the lowest and you won't earn much off them and it ends up at the wealth management end of the spectrum.

 

To summarise, everyone type of consumer will be catered for, just at different levels with the appropriately qualified intermediary.

[The Old Tolbooth]

Think the saving grace there John may be that a lot of companies are still loathe to do business with clients on an "execution only" basis, they prefer to deal with clients who have sought the correct advice, and have the business placed through an adviser.

 

Think what gavsmith is talking about, i.e. removing the commission element is the way forward, across the whole financial services sector, and those who are good at their jobs will survive, because clients will use them. Those who are in it to simply churn business will quickly be found out I think, this could prove to be a good opportunity for the smaller players at the moment who are struggling to compete with huge companies, makes the playing field more even i think.

 

Aye I see what your saying Iain, however I probably didn't put my point over clearly enough to be fair.

 

If people think that something is going to cost them, then they simply wont do it, it's the publics mentality, whereas if you don't charge your clients a fee and tell them that you get paid commission by the lender (which we have to do anyway), they aren't actually parting with any money to pay for the service, other than a slightly higher premium which is like paying for the advice on tic so to speak, but it's not a large chunk of cash that they need to part with which is highly off putting for most clients.

 

I think this is where the whole thing could fall down and I see it as an obvious weak link in the chain, I'd better get my taxi brief pretty soon eh

[gavsmith]

Think the saving grace there John may be that a lot of companies are still loathe to do business with clients on an "execution only" basis, they prefer to deal with clients who have sought the correct advice, and have the business placed through an adviser.

 

Think what gavsmith is talking about, i.e. removing the commission element is the way forward, across the whole financial services sector, and those who are good at their jobs will survive, because clients will use them. Those who are in it to simply churn business will quickly be found out I think, this could prove to be a good opportunity for the smaller players at the moment who are struggling to compete with huge companies, makes the playing field more even i think.

 

From a providers point of view it will also sort out the companies who have survived based on poor products on offer, but good commission rates. In the future the quality of the product, and the quality of advice will be the driving factors, both of which should suit the client.

 

Well summed up PJ1!

 

Not so sure about the small companies though, I think they will get bought up/merge with large companies that offer a similar service to similar type of client as they will achieve better economies of scale.

[The Old Tolbooth]

Good point re IP John. I'm in the same game albeit mainly corporate clients and it never ceases to amaze me that employees either don't know they have this type of benefit (PHI, Life Cover etc), or if they do they have no idea of levels of cover etc.

 

I agree with you on TCF and am all for it (mainly because I am sick of punters thinking all we and providers do is rip them off) although you could argue that the ridiculous amount of paperwork we have to issue to clients is not in keeping with TCF either - no-one is going to read or understand all that nonsense - the sooner we have one easy to read document the better.

 

Amen to that BB, it sometimes confuses the hell outta me, never mind the client!!

 

There's so much more you need to put into you files these days since TCF.

[portobellojambo1]

Well summed up PJ1!

 

Not so sure about the small companies though, I think they will get bought up/merge with large companies that offer a similar service to similar type of client as they will achieve better economies of scale.

 

It is a possibility that it will also go that way, but I would hate to see it.

 

There are some really good small firm advisers out there who don't deserve to be lost amongst the big players.

 

Everyone is in it to get their slice of the pie, but in the end the real winners should be the clients, after all it is their investment.

 

Working in the industry I agree with what John says, there are a lot of individuals (clients) out there who think they are clued up, but in reality they haven't got a scooby about financial products, don't realise the vast array of different products available to them, don't realise what most of them are, and/or offer, and end up in a total mess.

[gavsmith]

It is a possibility that it will also go that way, but I would hate to see it.

 

There are some really good small firm advisers out there who don't deserve to be lost amongst the big players.

 

Everyone is in it to get their slice of the pie, but in the end the real winners should be the clients, after all it is their investment.

 

Working in the industry I agree with what John says, there are a lot of individuals (clients) out there who think they are clued up, but in reality they haven't got a scooby about financial products, don't realise the vast array of different products available to them, don't realise what most of them are, and/or offer, and end up in a total mess.

 

I agree with you re the smaller companies but I suspect that it will end up being the case.

 

The RDR will not ignore the financially unaware people, it will just segment them - god knows how you will do that though!

[flecktimus]

Aye I see what your saying Iain, however I probably didn't put my point over clearly enough to be fair.

 

If people think that something is going to cost them, then they simply wont do it, it's the publics mentality, whereas if you don't charge your clients a fee and tell them that you get paid commission by the lender (which we have to do anyway), they aren't actually parting with any money to pay for the service, other than a slightly higher premium which is like paying for the advice on tic so to speak, but it's not a large chunk of cash that they need to part with which is highly off putting for most clients.

 

I think this is where the whole thing could fall down and I see it as an obvious weak link in the chain, I'd better get my taxi brief pretty soon eh

 

Sorry but i must disagree with you there. As someone who is seeking financial advice on a regular basis i would rather pay my adviser and then it would make me 100% confidant in the advice i am receiving.

 

I have a good advisor, but where money is involved you can never be sure

[flecktimus]

You are in the minority Flecktimus, all I hear from employees is 'I'd like some advice on blah blah blah'. When I mention that a fee would be payable they say 'oh I didn't realise I would have to pay' and back off.

 

this happens weekly at least. I am sure they wouldn't expect their company to give me something for free but it doesn't seem to translate the other way around!

 

Lots of people are prepared to pay fees but they tend to be financially 'sophisticated' which is always refreshing to hear.

 

Most folk think they have a good pension becuase it's with a well known insurance company rather than thinking about the amount going in, investment fund choice, or what they might get out of it at the end of the day.

 

Some people are in for a big shock when they retire!

 

PS - need a good adviser?

 

Always:)

[The Old Tolbooth]

Sorry but i must disagree with you there. As someone who is seeking financial advice on a regular basis i would rather pay my adviser and then it would make me 100% confidant in the advice i am receiving.

 

I have a good advisor, but where money is involved you can never be sure

 

BB is spot on in his reply, you are most definitely in the minority Flecktimus, I only wish more people were like you to be honest.

[flecktimus]

BB is spot on in his reply, you are most definitely in the minority Flecktimus, I only wish more people were like you to be honest.

 

Its from my days selling cars, i used to hate not always giving the customer the best financial deal.We had to use the company that was giving the best commission.

 

So when i have a financial adviser in front of me,half the time i am thinking "is this person giving me good advice or is it just commission based advice"

[70's Throwback]

Its from my days selling cars, i used to hate not always giving the customer the best financial deal.We had to use the company that was giving the best commission.

 

So when i have a financial adviser in front of me,half the time i am thinking "is this person giving me good advice or is it just commission based advice"

 

Which takes us aptly back to the purpose of the RDR