If you are struggling with the idea of looking for a mortgage, it might be worth using a mortgage broker. If you are unsure about how they can help, read on.
What is a mortgage broker?
A mortgage broker is an individual or a company that will act as an intermediary between you and the lender.
A mortgage broker gives professional advice on what type of mortgage would suit you. They do this by assessing your personal circumstances, such as your finances and employment.
They search the market for the best deal that matches your requirements and will help you with your application.
They are also on hand to help you understand how mortgages work and things to look out for, such as additional fees and charges.
What are the pros and cons of using one?
One of the main advantages is that you have access to an expert that can help you navigate through the mortgage market, which can be difficult to understand.
If you are time poor or not financially savvy, a mortgage broker can help you get the relevant information quickly and easily. They also have the most up-to-date information on interest rates and the latest deals.
The main disadvantage is the cost. It’s likely that you’ll need to pay a fee for their services, which can vary.
Also, the quality of service can vary, and if you are unfamiliar with the market, you won’t necessarily know whether the service you are getting is good or bad.
So, is it better to go it alone?
It depends on your circumstances. Without a mortgage broker, you may not get the best deal on your mortgage.
This could mean paying unnecessary fees or signing up for a mortgage with a less favourable rate of interest. This could cost you quite a lot of money in the long term.
How will I know if I need one?
Anyone can use a mortgage broker, but they are particularly useful if:
Your circumstances could be viewed as unfavourable by a mortgage provider. For example, if you have a poor credit history or an irregular income.
You are uncertain about the type of mortgage you could be eligible for.
Your deposit is small and/or you need a bridging loan.
How can I get one and how much will it cost?
You can find a broker by searching online. When looking for one, make sure they are a whole-of-market broker. This means they recommend mortgages from a selection that represents the whole market, rather than a small panel of lenders.
A broker will usually specify that they are whole-of-market. If they do not, ask them before arranging an appointment.
It is better to choose a broker that works independently of any bank or financial institution. This will prevent any bias towards products from a specific bank.
Brokers usually earn a commission once they have arranged a mortgage. Some may also charge you a fee, which could be a flat rate or a percentage of the amount you are borrowing. These charges should be conveyed before any contract is agreed. Don’t be afraid to ask.
Even if you do decide to use a mortgage broker, it is a good idea to do some preparatory work.
Do some research so you know the basics about how mortgages work. It’s a good idea to check guidance from the Money Advice Service. Our complete guide to mortgages is also a good source of information.
It’s in your best interest to make sure you get the most out of your broker. Have some questions prepared before your appointment.
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