What does a mortgage broker do that you can't?

If you're looking for reasons to use a mortgage broker - and wondering why you should pay for their services when there are already loads of other costs when moving home or
remortgaging, you're in the right place!

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.

Here's why:

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 mortgage 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:

• Death
• Critical illness (such as cancer, heart attack or stroke)
• Redundancy

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
info@bbmortgages.co.uk