Why use a mortgage broker? Save time, money, and hassle

With the average UK house price now over £280,000, getting a mortgage is the most significant financial commitment most people will ever make. But with so many different lenders and products on the market, it can be difficult to know where to start. This is where a mortgage broker can help.

Statistics:

• According to a recent survey by the Financial Conduct Authority, 79% of mortgage borrowers used a broker in 2022.
• A study by the Council of Mortgage Lenders found that borrowers who used a broker were more likely to get their mortgage application approved than those who went directly to a lender.
• Borrowers who used a broker were also more likely to get a better interest rate on their mortgage.

Getting a mortgage involves a long-term commitment – and one that is not to be taken lightly. Making the wrong decision might leave you not only with an unsuitable mortgage but one that leaves you seriously out of pocket. Before taking the plunge, therefore, you might want to take the most appropriate mortgage advice you can find.

In this article on “Why use a mortgage broker” we will discuss the advantages of using a mortgage broker and why it makes sense to seek professional advice when making such a significant financial decision.

Post Topics

What are the potential advantages of mortgage brokers versus lenders?

Additional benefits in consulting a mortgage adviser

How do I find a mortgage broker near me?

Preparing to meet your mortgage broker – and the documents you will need

Next Steps

FAQs

 

What are the potential advantages of mortgage brokers versus lenders?

You might be wondering if it’s worth going to a mortgage broker instead of going straight to a lender. After all, lenders are everywhere on UK high streets.

Yes, you can go directly to a lender to get a mortgage. But this means you’ll need to know what type of mortgage you want, how much you want to borrow, and what rate you want. The answers to these questions can be complex.

If you go directly to a lender, you’ll also be giving up some legal protection. The Financial Conduct Authority (FCA) says lenders must warn you about this.

That protection comes from the fact that if you arrange your mortgage without advice, the mortgage product you choose is entirely your responsibility. If you get advice from a mortgage broker, on the other hand, they’ll have recommended a mortgage to you. If you later believe that their advice was wrong, you can complain to the Financial Ombudsman Service and get compensation if you’re successful.

In short, using a mortgage broker gives you access to a broader range of products, better advice, and potentially vital protection.

Additional benefits in consulting a mortgage adviser

It is not only vital protection you lose by passing up the opportunity to consult a mortgage adviser. A mortgage adviser or broker is an expert in what he or she does.

Your broker is familiar with all the mortgage products across the breadth of the mortgage market and, so, is well-placed to match your particular needs and circumstances with the options available.

In looking for that match, your mortgage adviser searches the market on your behalf and can shop around for the most competitive deals available. In that quest, the independent mortgage adviser is guided entirely by whatever is in your best interests.

Some mortgage deals may be available only when you apply through a mortgage broker – they are not an option when you approach the bank or building society directly. The professional mortgage broker may have access to products at wholesale mortgage rates, for example, which you would not secure through a direct application and which grants you the benefit of an especially competitive interest rate.

They will also help you with the finer details, such as completing your mortgage application and ensuring you have the correct documentation.

How do I find a mortgage broker near me?

If you are wondering, “How do I find a mortgage broker near me?” then you have several options. You can ask friends, family and work colleagues for recommendations. Or, you can go online and use a broker directory service.

Look for a whole market mortgage broker. These are mortgage advisers who are typically not tied to any particular lenders or building society, so they can search the whole market to find the most suitable mortgage lender, product and interest rate to suit your own unique financial circumstances.

Preparing to meet your mortgage broker – and the documents you will need

Making the most of the help and guidance a mortgage advisor can offer depends on the relationship you establish – a relationship built on mutual understanding, trust, and confidence.

Expect your mortgage broker to ask you plenty of questions about the type of home you are looking for, whatever you understand about the types of mortgage that might be available, your budget, any loans or lines of credit you currently manage, and your credit history. Expect a thorough interview to understand your goals and ambitions concerning property ownership.

To make sure the ball starts rolling promptly, take along to your first meeting the documents your mortgage broker is likely to need. We have listed these elsewhere – and they include things such as proof of your identity (your birth certificate, passport, or driving licence), and proof of income (by way of payslips or tax returns, for example).

Next Steps

Once you have selected a mortgage broker and gathered the relevant documents, you should schedule an appointment to discuss your home loan needs. Make sure to ask plenty of questions and cover any doubts or concerns you may have before proceeding. Your mortgage broker will be able to provide more information on interest rates, repayment terms, and other important factors that can influence your decision. Once you have made a selection, your mortgage broker can help you with the application process and guide you through to a successful completionThe point at which a property purchase is finalized and owne....

FAQs

What Are the Benefits of Using a Mortgage Broker?

Utilising the expertise of a mortgage broker can significantly streamline the home-buying process. A broker acts as an intermediary between you and potential mortgage lenders, offering a wider range of mortgage products than you might find on your own. They have market access to exclusive deals and can provide tailored mortgage advice, ensuring you find a suitable mortgage deal that aligns with your financial circumstances.

• Brokers have access to a wide range of products and exclusive deals.
• They provide personalised mortgage advice to suit your individual circumstances.
• Brokers can streamline the mortgage application process.

What Are the Potential Drawbacks of a Mortgage Broker?

While there are many advantages, there are also potential drawbacks to consider. Some brokers may charge a mortgage broker fee, which can vary depending on the service provided. Additionally, not all brokers have access to the entire mortgage market, which means you might miss out on certain deals. It’s also worth noting that some brokers may be incentivised by commissions from lenders, which could influence their recommendations.

• Brokers may charge fees for their services.
• Not all brokers have access to the entire mortgage market.
• Some brokers receive commission from lenders, which could influence their advice.

How Do Mortgage Brokers Earn Their Income?

Mortgage brokers typically earn their income in two ways: through fees charged directly to the client or through commission from the lender. The mortgage broker fee can be a flat rate, an hourly rate, or a percentage of the mortgage loan. Commission from lenders is earned when the broker successfully secures a mortgage deal for a client. It’s important for clients to understand how their broker is compensated to ensure transparent and unbiased advice.

• Brokers can charge a flat fee, hourly rate, or a percentage of the loan.
• They may also receive a commission from lenders upon successful deal closure.
• Understanding a broker’s compensation model is crucial for transparency.

Is It Preferable to Work with a Mortgage Broker or a Bank?

Choosing between a mortgage broker and a bank depends on your personal circumstances and preferences. A broker can offer a wider range of mortgage products and independent advice, potentially securing a more suitable deal for your situation. Banks, on the other hand, can only offer their own products, which might be limiting. However, if you have a strong relationship with your bank and are satisfied with its offerings, it could be a convenient option.

• Brokers offer a wider range of products and independent advice.
• Banks provide direct deals but with a limited range of products.
• Your personal circumstances and relationship with your bank are key factors in this decision.

What Should You Expect When Consulting a Mortgage Broker?

When you consult a mortgage broker, they will assess your financial situation, credit history, and mortgage needs. They will conduct a credit checkA check of a borrower's credit history, which is used by mor..., review your income and outgoings, and discuss the types of mortgage that might be suitable for you. The broker will then search the mortgage market, using their comparison tools and market knowledge to find a suitable mortgage deal. They will assist you throughout the entire mortgage application process, from the initial mortgage in principle to securing a mortgage offer.

• Brokers assess your financial situation and credit history.
• They search the market to find a suitable mortgage deal for you.
• Brokers assist throughout the entire mortgage application process.