For some people, it can be difficult to see exactly why they should use a mortgage broker.
After all, surely if you’re savvy enough, you can cut out the middleman, do your research, and find the best deal for yourself, right? Well, not necessarily.
Here’s everything you need to know about using a broker to secure your first mortgage.
They know their stuff
As much as you might like to think you can sort out your own mortgage and wheel and deal to get the best possible one, the mortgage market is extremely complex, and it can be easy to get a bit lost.
On the other hand, mortgage brokers are all experts in the field and are fully qualified, so you know that you’re receiving the best advice available.
Even if you do think you’ve lined up the perfect mortgage deal, it may be best to see a broker just for a second opinion.
If you are at all unsure about a mortgage broker, check out this guide from Money, on how to interview your mortgage broker to check that they’re properly qualified and capable of helping you find the best mortgage deal.
You have a level of legal protection
If you are worried about the advice you’re being given, it may be reassuring to know that you’re legally protected.
Mortgage lenders have a duty of care to provide you with the best possible advice, and they have to be able to justify why they have recommended a particular mortgage to you.
If they do not do this, and you end up with a mortgage that isn’t right for you, you’re entitled to compensation for the bad advice you’ve been given.
On the other hand, if you go it alone and go direct to your lender, and wind up stuck in a mortgage that you can’t afford, you could find yourself in hot water, without a leg to stand on legally.
They can offer you exclusive deals
Many lenders work together with lenders, and can offer you exclusive deals which you can only get via a broker.
Bear in mind however that some mortgage brokers may be limited in which mortgages they can offer you, and may be tied to certain lenders, so it’s best to find one that is authorised to search the entire market.
They may not take a fee
Of course, the reason many may choose not to bother with a mortgage broker is that they don’t want to pay any extra on top of what they’re already shelling out on their new home.
However, did you know that many mortgage brokers don’t charge a fee at all? So are they just helping you out of the goodness of their hearts?
Unfortunately not, so how does it work? We spoke to Search Mortgage Solutions who explained.
“Mortgage providers such as ourselves who are ‘fee free’ work on a commission basis, which we get from the lender.
“This fee should always be made clear to you before going ahead with anything, and is usually around 0.35% of the mortgage value.”
It’s harder than ever to get a mortgage
A couple of years ago, the Financial Conduct Authority (FCA), carried out a review of the mortgage market and made it a lot harder to secure a mortgage.
You now have to provide much more information about your spending and income when applying for a mortgage, and a typical interview for a home loan can now last a couple of hours.
All this added scrutiny means that it makes even more sense to go to a mortgage broker, as going in without all the necessary information could turn out to be a pricey mistake.
Mortgage brokers are an excellent resource, especially if they don’t charge you a fee, and ultimately it can pay off to do a bit of both, and utilise a mortgage broker but also do your own research as well.