Applying for a mortgage is known to be a stressful process. It’s just another part of the stress-wheel that is buying a house and moving! But it’s a vital part, and one you can’t skip unless you’re buying a property totally in cash. So like it or not, you’ll have to do it. The question you need to be asking now, is do you want to find a mortgage yourself, or do you want to work with a mortgage broker to handle it all for you?
What Is A Mortgage Broker?
A mortgage broker is a professional who helps individuals and businesses to find a mortgage product to suit their needs. They work with lenders, banks, and other financial institutions to provide advice on the most appropriate loan products available in the market. They can help you find a loan that fits your budget and lifestyle, as well as provide guidance on how to manage your finances better. Mortgage brokers are experts in the field of mortgages, so they are perfectly placed to help you make an informed decision about your loan.
Within the general ‘mortgage broker’ category, you have 2 types of brokers:
Direct with Bank / Lender: These usually work for a specific lender (or sometimes multiple lenders), and so they will only offer that lender’s products to clients. They are often working within estate agents or banks, who will only have arrangements with a certain panel of lenders. Sometimes this can be beneficial, especially in terms of speed as it eliminates communication issues between lender and estate agent, but more often than not it just reduces your mortgage options.
Those that offer a broad range: As the name suggests, these brokers have access to a broad range of lenders. This means they can offer a wider range of products that are more representative of the market. They can also use this access to find exactly the right mortgage for each client’s circumstances. Many people who have been turned down by high street lenders go on to find success with these brokers.
Why Use A Mortgage Broker?
Of course, you can apply for a mortgage yourself, without intervention from anyone else. But this means you will need to research each of the lenders individually, work out what kind of mortgage you need, if you’re eligible for it, and spend a lot of time comparing each of their mortgage products to work out who is offering the preferred product. It also means you will have to fill out a lot of paperwork for every mortgage you apply for. In other words, even if you can do it, it’s a bit of a headache!
A mortgage broker is essentially acting as the middleman, and doing all the hard work for you. They will sit with you and ask questions, collect the relevant documentation and gather information from you to determine what kind of mortgage you need, what amount and whether you meet the eligibility criteria. They then go away and find a selection of mortgages that fit your needs. Mortgage brokers can also often get you “intermediary exclusives” mortgages that are not available directly and only available through them! They will then present you with your options, talk through them all with you, and facilitate your application with the chosen lender.
All in all, a broker is an ideal way to make sure you get the most suitable mortgage without having to do the legwork yourself!
How Do Mortgage Brokers Charge?
Most, if not all mortgage brokers will earn a commission from lenders after they arrange a mortgage with you, which they must clearly outline to you before you sign any mortgage contract. This is usually on a mortgage illustration provided to you.
Brokers may also charge you a fee for using their services, which will be either a flat rate or a percentage of the amount you want to borrow. Again, this is something they have to be upfront about and should also be on an illustration provided to you before an application is made. So while every broker charges in a slightly different way, you should never be left unsure of what you will owe once all the paperwork is signed.
3 Tips For Choosing A Mortgage Broker
Look for a broker who uses a broad range of lenders.
We may have alluded to this one earlier, but it’s generally considered more beneficial for you to work with a broker who uses a lot of lenders. You are more likely to find a more suitable mortgage to your situation, when you work with a broker who can access a lot of lenders and a lot of mortgages. On top of that they are completely independent and impartial, so they’re not trying to push one lender or product over another. Their aim is to get you the most suitable mortgage.
Ask about direct-only mortgages
While many mortgages on the market are only available via brokers, there are some that are only available if you apply directly to the lender yourself, without a broker. These are known as ‘direct-only’ mortgages. Make sure you ask your mortgage adviser about any direct-only deals.
Consider which type of broker to use
While most mortgage brokers work with customers in person or over the phone, there’s now a growing number of ‘robo mortgage advisers’ – web-based services that allow you to carry out some or all of the mortgage application process online.
There are a lot of pros and cons to this approach, and of course, as in-person brokers, we prefer the in-person approach! But some of these robo advisers can be beneficial, especially if your needs are straightforward, so it’s worth exploring the option while you’re choosing how to approach applying for a mortgage.
At GP Norgate we are independent mortgage brokers dedicated to saving you time and money, while providing you with peace of mind that you’re getting the most suitable deal possible. If you’d like to know more about our services or have a question about mortgages, just get in touch today, and we’ll be happy to help.
GP Norgate Financial Solutions is a trading name of Easy Street Financial Services Limited which is authorised and regulated by the Financial Conduct Authority. Easy Street Financial Services Limited is a company registered in England and Wales with company number 6430453.
The registered office address is Basepoint, 377-399 London Road, Camberley, Surrey, GU15 3HL. There may be a fee for mortgage advice. The precise amount will depend upon your circumstances.
Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.