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Do you have a Mortgage? Does this sound like a good idea?

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At the moment most mortgage advisors charge a fee for their service. If you were told that if you were to review your life cover and mortgage through the same company you would not only not be charge… Read More
Greg Thomson Avatar
7y, 11m agoPosted 7 years, 11 months ago
At the moment most mortgage advisors charge a fee for their service. If you were told that if you were to review your life cover and mortgage through the same company you would not only not be charged a fee but you would get all of the commision for the mortgage paid back to you (equating to about £525 cashback on a £150,000 mortgage). Do you think that this would be something that was

A/ Very hot
B/ Pretty hot
C/ Warm
D/ Cold

Answers are much appreciated. :thumbsup:
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Greg Thomson Avatar
7y, 11m agoPosted 7 years, 11 months ago
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(17) Jump to unreadPost a comment
Comments/page:
#1
Why don't you try the free so called independent advisors first and see what they come up with?

I've just paid £99 for an independent advisor and didn't receive any better service than 2 previous free brokers over the years.

Has that company told you what your rate is, how long, etc. Without knowing what the deal is you could be getting £500 back for a morgage at 6.5% rate. If that was the deal i'd vote it cold.
#2
Afternoon mrsj2008, Im just trying to get an idea of interest on the idea at the moment. Ok so youve just taken out a mortgage and paid £99 for the service. What if you had got exactly the same deal, not had to pay the £99 and got an average of £525 cashback on the provider that you reviewed your life and critical illness cover with the same advisor. Would that have been something you would have done, thought about, jumped at the oppertunity??
#3
vinylandtrinkets
if you use a banks advisor they wont charge anything, just means you would need to shop around for the best rates you want then make an appointment in the bank you want to use


The banks advisors are free but they only offer mortgages from that bank. We are on about free independant advice with the main part being the massive cashback which is something no where else offers at the moment.
#4
So how would you make any money?

I thought the advisors make money by the cashback from the mortgage?
#5
So long as you can cancel your life cover straight away and get a decent priced one the sounds great
#6
vinylandtrinkets
are you by any chance the mortgage advisor offering this premotion?
would you need to change your critical illness and life cover to benefit this offer?


No im not offering this promotion but is something im considering. I really want to find out if this interests people before I spend a load on advertising etc. If its not of interest then what would be?? (obviously within reason). Thanks.
#7
Ok so the first part of the deal would be that you would have to take out the life cover to get the cashback on the mortgage. Unfortunately its a business not a charity. The advantages are that the life cover advice is also independant so would be able to get the cheapest on the market and not some overpriced policy. The life cover would have to be maintained for a minimum of 2 years (otherwise the advisor would get any commision from this withdrawn and again would have done the work for nothing).
#8
ha, ha, got ya. i'd think about it.

I didn't get cashback this time but did get a free survey so it kind of evens it out against your offer.

In all honesty cashback deals have never rocked my boat, I prefer to look at the long term saving and interest rate.

On impression your thing sounds good but they could charge me more than other companies so i'd still do my own research to see who is more competitive.
[mod]#9
Depends on the product itself. What if the interest rate was 15%?
#10
vinylandtrinkets
if i didnt have to change my critical illness or life cover just obtain a quote then it would be a good offer.
If you use the bank i did say you'd have to shop around


sancho1983
So how would you make any money?

I thought the advisors make money by the cashback from the mortgage?


DAMNOME
So long as you can cancel your life cover straight away and get a decent priced one the sounds great


vinylandtrinkets
so yes i would have to take out both with you to benefit from the offer.
hmm, some independant life cover isnt always the cheapest or the best so that might be a problem, same with illness cover.

this offer sounds good in theory as most people dont change the life cover provider often, but with the current market the way it is i know of a lot of people who have not added or cancelled the life cover & critical illness cover until they can afford to pay them again

When i took out my current mortgage( HSBC) i had a free survey but with the one before that i had a free survey and £500 cashback, and legal fees paid this one was with Abbey
have to agree with Mrsj2008 , plus lots of people these days are doing thier own seaching for cheaper mortgages, personally i would never use an independant advisor had to many tell me one thing only for me to go online and find a heck of a lot cheaper and better.


Thanks for the replys. Maybe this starts getting a little more complicated now but when I am on about cashback I am on about something in addition to what the lenders were offering. ie the lender may offer £250 cashback and a free valuation - pretty standard for remortgages. This is literally the mortgage advisors commision that I am on about refunding. That way the mortgage advisor would earn nothing out of the mortgage however would earn from the life cover which im sure we will all agree is a very valuable product in itself.

You are right a lot of people dont change their life cover often and historically it has been increasing in cost which probably explains why. However, over the last 3 to 4 years the cost for life cover has reduced and as such more and more people are reviewing their policies.

As the vast majority of people in the uk take their mortgage through an advisor rather than directly with a lender I had thought this would have been a very appealing option to everyone but I may be wrong. If im wrong then can anyone please tell me what would apeal to them :thumbsup:
#11
magicjay1986
Depends on the product itself. What if the interest rate was 15%?


The advise would be totally independant so you would get the best rate currently available. Luckily there are no rates at 15% at the moment!
[mod]#12
Greg Thomson
The advise would be totally independant so you would get the best rate currently available. Luckily there are no rates at 15% at the moment!


If that is the case then yes, that sounds good.

Although, Halifax had a promotion where they would pay your council tax for a year. That would save you more than the initial amount per £150,000 mortgage.
#13
magicjay1986
If that is the case then yes, that sounds good.

Although, Halifax had a promotion where they would pay your council tax for a year. That would save you more than the initial amount per £150,000 mortgage.


Ok thanks for your thoughts. Only problem with the halifax ones is again that the council tax promotion would mean you would have to go with halifax (maybe when there were some cheaper deals with other lenders available for you). This would be cashback no matter who you went through.
[mod]#14
vinylandtrinkets
when i looked for our mortgage i looked for one with the best rates and lowest admin charges not what they were offering in addition, how would you make money if you are offering the cashback?


The OP isnt offering cashback...what do you mean?
[mod]#15
vinylandtrinkets
yes he is
quote:

(equating to about £525 cashback on a £150,000 mortgage).


No he ISNT. He is being offered cashback for missing out the broker and taking their fee.
#16
The broker normally gets cashback from the lender, which he will pass on to the customer instead

I think
#17
vinylandtrinkets
yes he is
quote:

(equating to about £525 cashback on a £150,000 mortgage).


magicjay1986
No he ISNT. He is being offered cashback for missing out the broker and taking their fee.


magicjay1986
The OP isnt offering cashback...what do you mean?


Sorry let me just clarify this for you. Normally what would happen is an independant advisor would search the whole market and advise (you) the customer on the best available deal currently available to them. Just to clarify you would then get the best available deal from the lender including any special offers they have ie they may also offer a free valuation, free legal costs etc. The broker then normally earns his money from commision from the lender and sometime a fee as well (depending on how much commision there is).


To give some really rough examples so you can get an idea of the figures involved based on a £150,000 mortgage.

So the mortgage advisor would earn around £525 from the mortgage lender in commision. This is paid by the lenders as they dont have to employ their own advisors to advise on the mortgages

The advisor then may charge a fee for their advise also and these average at around £400 for a proper independant financial review.

If an advisor also arranged some life and critical illness cover for the client then they would also get paid some commision from the insurance company meaning they have been paid twice.

If the customer then took out life and critical Illness cover and lets assume a figure here of it costing about £50 a month for an average couple then the advisor would earn about £500 in commision for this.

What I am looking to get your thoughts on is what about if the advisor said that actually if you take the mortgage, life and critical illness cover then they would offer a special offer. They would refund you the £525 for the mortgage, not charge you the £400 fee and instead just work on the commision from the insurance company for the life and critical illness cover.

On the base of it the advisor will only be earning £500 per deal rather than £1425 however if it was likley to be of great interest to people and they could do 3 or 4 times the amount of business and cut down their normal advertising costs then it will be a worthwhile promotion.

I hope this has clarified a few points, let me know if there is anything you are unsure on. :thumbsup:

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