6 Reasons Why it Pays to Use a Mortgage Broker
What does a mortgage broker do that you can’t? And why should you pay for their services when there are already loads of other costs when moving home or remortgaging?
If you’re asking yourself these questions, you might be tempted to ‘cut out the middleman’ and arrange your own mortgage. However, you may want to think twice.
Mortgage advice from an experienced, reputable broker can prove invaluable.
1. A mortgage broker is qualified
There’s a lot to think about when choosing the right mortgage and mistakes can be expensive in the long run. It’s not as simple as just picking the cheapest fixed- rate or tracker mortgage you can find.
Mortgage brokers have to be qualified to give you mortgage advice; you may not get that kind of guarantee if you ring up a lender’s call centre. That said, new regulations mean that all call centre staff need to be advisers or must refer you to someone who is, and if you go in-branch, you’ll be able to arrange an appointment with one of their mortgage advisers.
2. A broker is on your side
An independent mortgage broker will look for the best mortgage for you. They aren’t on the lender’s side, they’re on yours. They will also be able to give you access to far more products than if you went direct to a provider.
You’ll get unbiased advice and be able to choose from a range of lenders and subsequent products, rather than being restricted to the single range of one lender. Furthermore, an independent broker not tied to one estate agent is firmly on your side.
3. They know the industry
Lending criteria have tightened massively over the last few years, with the Mortgage Market Review being the latest, and arguably widest-ranging, development. It’s been designed to ensure borrowers can prove affordability, even in the event of a rate rise, and those extra checks have understandably increased application times.
That’s why it’s so important to stay in the loop and to have a mortgage broker on your side who understands it all. A broker deals with lenders on a day-to-day basis, so they’ll know what the application process is like for each product and can tell you which lender can process your application with minimal delays.
They also know the background criteria that a lender has and can bring this experience to bear when advising you and processing your application.
Then there’s the fact that, because a mortgage broker may direct a lot of business to a particular lender in a year, they can exert influence and chase things in a way you just can’t do by yourself. That can make a huge difference should things get held up.
4. It’s not just about the mortgage
A mortgage broker won’t just advise you about your mortgage. They will also look at any related requirements, such as life insurance, payment protection and even buildings and contents insurance.
They will recommend appropriate insurance for your new mortgage arrangements to make sure you and your loved ones are fully protected in the event of:
- Critical illness (such as cancer, heart attack or stroke)
5. Don’t be put off by a fee
Mortgage advice tailored to your circumstances is a service. In order for the mortgage broker to be able to offer this service, they need to make money. They do this by one or both of the following:
- Charging a fee. This could be a one-off fee for advice or a fee that pays for advice throughout the term of your mortgage (if you need to remortgage, move home, etc.).
- Commission. Lenders and insurers may decide to pay the mortgage broker commission for putting your business their way.
Where can you find out how much your mortgage broker makes?
Mortgage brokers are required to provide you with a Key Facts document about their services that details any fees or commission they charge or earn.
You will also be provided with a Key Facts Illustration (KFI) about the specific mortgage being recommended. Details of your broker’s fees can be found in section 8 of the KFI.
Details of any commission earned by your broker for introducing your business to the mortgage lender can be found in section 13 of the KFI.
6. The value of advice
Mortgages are a lot more difficult than they first appear. Knowing what rate, term, lender, features and insurance to get are all time-consuming and complex matters.
Comparing mortgages on a site like www.moneyfacts.co.uk is a good place to start – it will give you an idea of what’s out there. But choosing a mortgage is a process far more complicated than simply opting for the lowest rate or the best incentives.
A mortgage broker takes into account your whole circumstances before recommending a suitable product It’s that thorough, professional analysis that makes a broker’s advice well worth paying for.
For more information, call BB Mortgages on Newark 01636 674455 or email firstname.lastname@example.org back to all blogs