If you have never bought a house then all the talk you will hear about mortgages might be fairly confusing and even frightening. Back in the olden days when I had a personality (the mortgage industry eventually strips you of that) I was training up as a mortgage advisor and even though it was all I did the whole day through every day of the week it took me a long time to become a Professional Broker, that and examinations such as the Mortgage Diploma. So I can only imagine how it must feel for people who are looking for a mortgage and looking to get straight talking advice. Who do you trust? How can you be sure that you are not being ill advised or ripped off?
In this post I will give you a few quick ‘checks’ you can do to ensure you are dealing with a professional broker. Firstly, you can ask the broker if they are regulated by the Financial Regulator and if you are the suspicious type you can ask to see their certificate of Regulation. Most Brokers will be delighted to show you this as its our industry mark of approval from the regulator, some folks might be mildly offended because in a way its like asking a doctor to see their degree from Med School. Anyways, if you want to be sure then always ask. If this isn’t your style you can always ring the Financial Regulator on 01 410 4000 and ask them if the person or company you are dealing with are regulated, they have a registry and they can let you know.
Assuming your mortgage broker is kosher in terms of regulatory status the next check is to ask them how many agencies they have. You can be called a ‘Broker’ even though you only deal with one institution/lender, people who operate on this basis are called ‘tied agents’ and you can be a tied agent for mortgages (e.g. A broker who can only place business with IIB for instance) or on the Life/Pension side of a business (such as brokers who operate via OnceSource – that means they are tied to Irish Life). We personally feel, and the industry voices feel that dealing with a broker with a good selection of agencies is the best way forward. Ideally your broker should have EVERY agency going that way they can advise you on any option out there, most however will aim to have agencies with the lenders or insurers most suited to their business model.
Here at Irish Mortgage Brokers we have every major lender (that means we have all of the 15 main banks/building societies etc. on our list of agencies) and we also have every major Insurance Provider, that means you are getting totally independent advice at all times. Our advice is that you should ensure your broker has a similar level of choice for you as a client, and certainly we would not advocate considering any broker ‘independent’ if they had less than 10 agencies although to use the term ‘independent’ you don’t need to have any more than five.
Another test is to check out the companies website, if a company doesn’t have a website at all that would concern me, if it looks like something that was put up in 1998 its better than nothing at all. Mortgage brokers deal primarily with people and often use word of mouth as their means of getting clients, so they don’t always put much effort into technology any more than there are websites for carpenters, however, no website at all, in this day and age, to me screams ‘behind the times!’ and if you are behind the times on your technology what does that say about your customer service?
Finally, make sure that your Mortgage Broker or Insurance Broker is a member of an industry professional body, PIBA (Professional Insurance Brokers Association) is the largest in the country by membership and it covers Mortgage Brokers as well as Insurance Brokers -despite the name. It has over 950 members. The IBA (Irish Brokers Association) has about 490 members and they are primarily in general insurance, lastly there is IMAF (Independent Mortgage Advisers Federation) and they have a specifically mortgage based slant and they have about 80 members. We feel that the industry voice is that of PIBA but being a member of any professional body is a good sign because all of the organisations vet their membership and they are very quick to condemn and seek out any member who may tarnish the name of the group.
So when you are choosing a Mortgage or Insurance Broker in Dublin or around the country remember the list:
1. Are they regulated? (see paragraph 2)
2. What agencies do they have? (covered in paragraph 3)
3. Check out their website (paragraph 4)
5. Are they a member of a Professional Body? (paragraph 5)
If you do this then you can be certain that you are dealing with a reputable broker. Its important to realise that 99% of Brokers are hard-working honest individuals who’s advice has probably helped hundreds of people in similar situations to your own, by taking the precautionary steps listed above you will be able to avoid the 1% who don’t.
Of course you – and other brokers – don’t deal with NIB – therefore ruling out the lowest rate mortgages for all borrowers with less than 80% LTV.
Hi Joe, actually Halifax have a rate of 4.4% for 12 months which then goes to 4.6%. The very best NIB Rate is only 4.6% and to avail of it you have to have a loan of less than 55% to avail of it, so while your point about brokers not dealing with NIB is true the rest of it is wrong. Brokers can still place business with huge savings. And NIB will not do you any special deals on house insurance or mortgage protection either, something which a broker can do, you have to look at the total cost of a loan to get a truly accurate picture of expense although rate is indeed the biggest deciding factor.
just talk show me the rates, the fees if any,which bank offers what, for how long , what deposit is now needed, where is the best deal, where to find it. you have given good advise,generaly , what is the nib. you at least need to put in the full name once as people abroad may need to read ur artical.
The NIB is National Irish Bank. Regarding rates etc. if you want to research rates there are plenty of sites just do a google on ‘irish mortgage rates’, if you want to get into finding the best deal for your LTV etc. then I would suggest you find a broker whom you are comfortable dealing with and liase with them, hopefully thats us, but if not there are plenty of quality brokerages in the city.
Hey Karl
Your reply to Joe is inaccurate and misleading in relation to the NIB LTV product.
The Halifax rate you quote (disc 4.4% going to 4.6%) is only available to those on LTV of 50%. The APR quoted for this rate is actually 4.67% APR. on the Halifax web-site.
http://www.halifax.ie/index.jsp?1nID=94&2nID=104&3nID=109&pID=104&nID=278#tab1
Also, you quoted the APR Rate (4.6% APR) for the NIB LTV product.
This is based on a 50% LTV at a nominal 4.5% (ECB +0.5%).
Also, for mortgages above 50%, the rate is tiered, so that the portion under 50% attracts the ECB +0.5%.
So, to summerise, the NIB rate for a 50% LTV Mortgage is 4.6% APR, whereas the Halifax rate would be 4.67% APR.
You should compare like with like, and not mislead the readers.
Irishpancake: NIB changed their rates as of the 14th of April, the ones you are quoting didn’t exist on the day you wrote that post, the margins have since risen significantly on NIB loans and everybody elses, I suppose that when the world changes it changes quickly!
Because of teh LTV tiering it looks like (assuming that bit to be correct) I was wrong in the calculations.
Even a know it all like me doesn’t know everything!
Karl
I was referring at all times to NIB’s LTV Mortgage product.
AFAIK, this has not changed (yet)!!
The point I was making was that you were comparing one bank’s(NIB) APR rates with the nominal rates quoted by another Bank (Halifax).
This will obviously have the effect of making the NIB rates look higher than those for Halifax. This I still believe is misleading to make an unfair point, i.e. “there are rates out there which are cheaper than NIB’s LTV rates”
This is now and was then untrue.
I don’t claim to know everything my self, but I do know that NIB LTV Mortgage rates are still the same.
For LTV’s of =<50% it is ECB +0.5%
LTV’s 50%-60% is ECB +0.6% on that portion
LTV’s 60%-80% is ECB +0.8% on that portion
So, for a mortgage on a 50% LTV property the rate is 4.5% (4.60% APR) and on an 80% LTV it will be 4.59% (4.69% APR)
see here http://www.nationalirishbank.ie/Link/PersonalMortgagecalculate
NIB changed their rates in the meantime, so, like I said, I was wrong at the time of print.
Interesting point would be: how many people are on the NIB variable? Because it’s one of the worst in the market, if over 70% of mortgages are on variables then they are using one part of their client bank (clearly the less financially savvy ones) to suppliment the ones tracker portion?
And NIB won’t let you consolidate any debts, and their underwriting criteria was prohibitive compared to other banks, so I suppose that if you fit every box going you’ll do well with them. For the 95% (that is if NIB even have 5% of the market) of the population who don’t deal with them then it may be a good time to look their way?