So the time has come to get a mortgage, you’ve looked at the house, and your bank balance and the decision has been made.
You need to get a mortgage, but there are so many. Years ago you would just get one from your Bank (e.g. AIB), but these days things are more competitive, it’s worth shopping around.
Indeed you may have seen new shops opening on the “highstreet” called Mortgage Brokers. Now, the term Broker at first sounds dated, redundant, it calls forth memories of the Insurance Broker which has now been largely abandoned by the plugged in in favour of Direct Insurers. Indeed the word Broker is so associated with insurance in Ireland that the Irish Brokers Association describes itself as “the… professional body of Insurance Brokers”.
Does the Mortgage Broker have anything to offer? Well, they can definately save you the time of manually obtaining rates from the various lenders and comparing. But at what cost? The lenders pay commissions to mortgage brokers for each client referred. Typically the commission is 0.5%- to 1%. Because this is a percentage and not a fixed figure it may not sound like much, but if you consider the average Irish mortgage is EUR 375,000 loan then it equates to as much as much as EUR 3,750.
Mortgage brokers of course do deserve some fee just like any other service provider, for example an auctioneer may sell a house and take a cut. However, an auctioneer clearly works for the seller of the house, they aim to get as a high a price as possible, and this is understood by the buyer. This is widely understood.
Some mortgage brokers will charge even charge you a fixed fee and still get a commission from the lender! Now you might understand why so make brokers have appeared on the highstreet.
I recommend you seek a broker that charges a fixed fee, but also refunds their commission from the lender to you. Continue reading ‘How to deal with Irish Mortgage Brokers’
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