Confused about mortgage rates.

[imaeasteregg]

Hello,
FTB here & after speaking to L&C have a rough idea of what we can borrow & deals available. However looking at money supermarket comparison calculators the % is quite a bit lower. I assumed brokers had access to the best deals & that L&C were competitive. Should I try & do it myself?

[quote imaeasteregg]@Cocomarine varies, am I correct in thinking you add that on & work out if the fee actually means it's more expensive? [/quote]
Yes, the fee usually gets added to the total borrowing - and then you’re paying interest on that for the lifetime of the mortgage!
You can pay it upfront too.
So what you’ll often see, if a mortgage with slightly cheaper interest rate BUT (say) a £2K added on. Which over time can cost as much as taking the fee-free slightly higher rate in the first place.
There are lots of calculators on line that show you exactly what you’d pay back.

L&C are independent so you don’t need to worry about that.
They won’t have access to the whole market per se as some lenders and products are not for the broker market.
You need to compare the same LTV the same fixed length and the total cost of borrowing: a product may have a lower rate but a high product fee and may cost more overall. Also some products have different incentives - cash back, legal fees included, valuation fees included.
I worked for a well know high street lender that had a separate company that lent solely to brokers. To be honest I’d always go for the broker as things tend to run smoother - a larger company like L&C will put a lot of money their way so they like to keep them happy and so they often get dealt with quicker.

[quote imaeasteregg]@LittleBearPad I didn't think of that. What would be reasons for different criteria (I had put in we are FTBs & our deposit)? [/quote]
Credit scores - some lenders are stricter than others
Amount of borrowing - some rates will only apply up to a certain amount of borrowing or over a certain amount.
Salary vs mortgage - how many times your salary you need to borrow.
You might need to already have a current account with the lender
Profession even - we had one that was only open to specific professions at one point (law, accountancy etc)

The easiest thing would be to send L&C a copy of the rates you've found and ask why they haven't been recommended to you.

I used to work for an independent broker and customers used to do this fairly often, we were always happy to explain why the products weren't suitable.

As others have explained, there are usually a couple of main reasons for this.

1. Often the lower rates have higher product fees, depending on the mortgage amount and product term, it's not always cheaper to go for the lower rate, your broker will work out which is the cheapest option for you.

1. Criteria varies between lenders (and changes frequently) so some of the lenders/ products you've found are unlikely to be available to you. Lenders have quite a lot of criteria so there are many possibilities as to why a lender may not accept you. Your broker will be happy to tell you if you don't meet the criteria for a certain lender or product.

Hope you get it all sorted!

Brokers usually have a lender panel and the only deals they cannot get are those you can only get directly from a lender. If you go to a lender directly, that would be restricted as they can only advise on their own mortgages.
I usually see clients showing me great rates and asking why I didn’t offer them this rate when I have the lender on my panel.
Because that lender has a limit of 85% loan to value on flats.
Or because that lender doesn’t lend on flats in buildings with more than 4 floors!
Or because that lender will not lend more than 75% LTV to the self-employed.
It is not difficult to do yourself - you just need to put some research into it. A broker should already know all this or at least find out before applying.

As previous poster said, feel free to contact your broker and say that youve seen xyz product can you explain why this isn't suitable. Usually it will be product fees that make the difference.

I know the broker you have spoken to are well recommended, just remember there will also be independent brokers in your local town providing just as good a service, not charging you a fee that do not have the same advertising budget!