Mortgage Advice list questions that borrowers should ask post-'Mortgage Day'
Mortgage Advice Bureau has said that the range of advice and other aspects of service offered by brokers will vary considerably after 'Mortgage Day'. This is despite the fact that FSA regulation means that mortgage sales will be governed by legally enforceable rules and thus customers can be confident that they can identify a reputable broker.
Mortgage Advice Bureau says that the choices that different brokers have made ahead of M-Day, such as whether they are directly authorised with the FSA, have joined a network as “appointed representatives”, or have created their own panel of lenders, means that the range of products and borrower circumstances that they can advise on will vary tremendously, as will fees and service. All of this affects the choice that borrowers have access to.
Q1. Can you access all lenders in the UK? : Under regulation, brokers can claim to access the “whole of market” but in reality this may simply mean a limited range of lenders on a panel. However the majority of panels will cover 20-30 lenders, which is generally representative of the choice of products available. However lenders may also be able to offer specific products not from the panel to suit individual requirements, as there are over 100 lenders to choose from.
Q2. Do you cover all customer categories? : As the mortgage market becomes increasingly sophisticated, it is important to have advice from someone who understands the range of options available to you – from first time buyer to remortgage, to buy to let and property investment, to equity release, overseas purchase, and non-conforming loans. Many borrowers have needs that can only be identified and met by a broker that understands the entire marketplace. Consumers need to make sure that the broker they talk to is genuinely experienced in advising on their particular circumstances.
Q3. What are your fees and what do they cover? : Fees have to be disclosed after M-Day. It is important to understand exactly what your broker is charging and what they are doing for that fee; don’t assume that if you are paying a high fee it necessarily means that you will get a better service.
Peter Brodnicki, CEO of Mortgage Advice Bureau commented: “Consumers will undoubtedly benefit from the increased protection that FSA regulation of the mortgage industry brings. However, our message is that consumers should still be alert to certain differences in the quality of service available to them. By asking our three key questions, they will be able to make an informed choice regarding which broker they choose to use.”