With so many mortgage deals available, how can you ensure you find the right one for you?
You could decide to go direct, searching the market yourself and approaching a lender directly for a specific mortgage deal. Lenders may provide advice, but only on the products they offer. Going direct could save you money as you’re not charged fees that some brokers charge for mortgage advice, but only if you know what mortgage is best for you. You could arrange a new mortgage with your existing bank or building society, but you could be limited solely to their own mortgage products, significantly restricting the deals available to you.
What is a mortgage broker?
A mortgage broker is a person or company that arranges a mortgage between you (the borrower) and a mortgage lender.
They will:
- Help you assess your financial situation
- Recommend the most suitable mortgage for your needs
- Search the market to find deals that match your criteria
What are the benefits of using a broker?
- Convenience - if you’re not sure what you’re looking for and aren’t clear on the mortgage markets, or just don’t have the time to search for deals and speak to lenders, then a broker can be very useful. They could save you a considerable amount of time.
- Access – mortgage brokers will usually have access to a wide range of lenders, with deals that aren’t always available if you go direct. This means they have a wider choice of options to recommend from.
- Expertise – if you’re not familiar with the different types of mortgages available, knowing where to start can be overwhelming. For such an important financial decision, having an expert who can provide impartial advice and explain things, will make the whole process clearer.
What are the disadvantages?
- Cost - some mortgage brokers don’t charge a fee and receive commission from the lender, others charge a fee for their services. This can be charged an hourly or 'flat fee' basis and can either be charged up front or on completion of your mortgage.
- Limitations – not all brokers have independent access to the mortgage market, some only use certain lenders. You should ask how many lenders a broker uses and if they have any preferences. Not all mortgage deals offered by banks and building societies are available through brokers.
- Quality - getting a mortgage is one of the biggest financial decisions you’ll make, so it’s important to make sure you choose one carefully and get recommendations where possible
What types of mortgage brokers are there?
- Brokers who only offer mortgage from a single lender
- Brokers who offer mortgages from a limited number of lenders
- Brokers who offer a comprehensive range of mortgages from across the market.