Looking for the right mortgage can be difficult. It’s something that most of us only do a few times in our entire lives, and thus it’s tricky to get a feel for what works and what doesn’t. You might look to friends and relatives for advice, and try to benefit from their experiences. But there’s another way: talk to someone whose business it is to shop for mortgages – all day, every day!
What is a mortgage broker?
A mortgage broker is a sort of middleman between you and the lender. It’s sometimes a single person, but it’s often an entire organisation.
How can a mortgage broker help with a mortgage application?
A mortgage broker will be able to point you toward the best available mortgage deal. They may even be able to help you out if you’ve been rejected by other would-be lenders – which, given that we’re in a recession, may be a problem.
Mortgage brokers are an established part of the financial services industry, and are regulated by the Financial Conduct Authority. With that said, you’ll still want to do your own research, and seek out the most reputable available broker. If you do receive bad advice, then it might be that you can pursue a claim of financial negligence.
Why use a mortgage broker?
There are several upsides to using a broker.
First, you’ll benefit from their expert knowledge of the market. They’ll know not only where the best deals are, but which of those deals are appropriate for your circumstances. Using a broker can save you time and provide helpful information on the current mortgage market.
Some charge a fee, whilst others get their commission from the mortgage lender, so the advice isn’t always for a fee.
You might think that ‘middlemen’ in general are to be avoided. But in practice they provide a valuable service. After all, most of us visit the supermarket every day, rather than visiting dozens of different food producers. The time and energy saved, and the discounts negotiated, make the middleman worthwhile – even if they do take a cut. The same applies here.
Why might you not use a broker?
Using a mortgage broker isn’t for everyone. If there is a fee, you could avoid this by going to a lender direct. It might be that the solution to your mortgage-related problem is obvious – in which case, you’d just be paying the broker to tell you something you already know.
It should also be noted that not all brokers are equal. Some of them won’t search the entire market, or only have access to certain lenders and deals.
What’s more, not all lenders will deal with mortgage brokers. They might offer a discount if you approach them directly, or they might not even consider dealing with you if you’re going through a broker.
In the end, brokers serve a vital function in the modern property market. But the services they provide aren’t a great fit for everyone. Do your research before securing a lender.