Could we save brokers' fees by approaching the lender direct?

Q My partner and I are first-time buyers. I, quite randomly, chose a financial adviser working for Mortgages Direct and linked with Haart Estate Agents.

He has just arranged an agreement in principle with Nationwide for us. We have not yet paid him any fees, these will become due on purchase I believe, but I am quietly wondering what benefits we receive going through him rather than Nationwide directly.

I don't know if the loan he has secured for us is preferable to what we could get by approaching Nationwide directly and thus saving his fees. I could ask him, but he has already put in a few hours' work for us. Any ideas?

AM

A If the Mortgages Direct you are talking about had been www.mortgages-direct-uk.com (phone 08456 44 88 23) based in Hampshire, I would have said that you had struck lucky with your random search for mortgage advice. That's because this firm of mortgage brokers claims to select mortgages from the whole market and - according to its website - charges "no broker fees under any circumstances".

As it is, the Mortgages Direct (based in Colchester in Essex) that you are dealing with is able to select mortgages only from a restricted panel of lenders (so not the full range of mortgages available from all lenders - and your adviser should have explained this) and charges a fee of up to 1.95% of the mortgage amount once the mortgage goes through.

So, given that the range of mortgages that your adviser can recommend is limited, and given the fee (which could amount to just short of £2,000 on a £100,000 mortgage), I'm not surprised that you are wondering whether it's advice worth paying for. I have also checked with the Nationwide which tells me that the loan that the adviser has recommended "will not be preferable to those available by approaching Nationwide directly". However, the Nationwide quite rightly points out that if you were to go to them directly they'd only be able to make recommendations from their own range of products. But you may not feel that this is a problem if you are happy with the Nationwide as a prospective lender.