Why use a broker?
Advice is tailored to your individual needs and circumstances meaning that your needs are the most important thing when a broker makes a recommendation. The FCA (Financial Conduct Authority) heavily regulate mortgage products including first charge and second charge mortgages meaning that the advice has to be carefully considered and justified before a recommendation is made. A mortgage Broker can really search the whole of the market for you meaning that they have the expertise in knowing which lenders you may or may not be able to approach saving you potentially hours / days of time, and also assist your credit score by reducing the amount of searches you may have on your file by approaching numerous lenders. A Broker will assess your affordability needs and ensure you are fully protected reviewing your income and also recommending products that can protect you if the worst was to happen.
Setting up a mortgage isn’t just as easy as popping to your local branch and stating how much you’d like to borrow these days, and a lot of thought and preparation needs to go into purchasing the most important asset in your life. Your home.
As a mortgage broker they have a duty to provide professional advice using experience and an understanding of the whole of market which a single tied bank cannot offer. Banks / building societies can only offer products from a single restricted choice of their own products whether this is the correct product for you or not.
An independent mortgage broker will look for the best mortgage for you. They aren’t on the lender’s side, they’re on yours, and they’ll give you access to far more products than if you went direct. You’d get unbiased advice and would be able to choose from a range of lenders and subsequent products, rather than being restricted to the single range of the lender you go to.
Mortgage criteria have been 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.
A broker knows lenders who can accommodate you if you have been employed for less than 6 months, only have 1 year’s accounts or even if you have had adverse credit in the past, a broker will be able to advise you on the most suitable lenders for your needs.
A mortgage broker will look at all aspects of your needs as a client. They will also look at any related life insurance, payment protection and even buildings and contents insurance you have to ensure this is the correct level of protection, meaning that you will receive advice on whether your are over / under insured
They will recommend insurance based on your new mortgage arrangements to make sure you are fully protected in the event of:
- Critical illness (such as cancer, heart attack or stroke)
- Accident, Sickness or Unemployment
Using a mortgage broker means that you can access exclusive deals and rates that you will not be offered going direct to a lender – these are usually a lower rate than what is offered direct to you. A broker will also push the lender to complete your mortgage quickly to ensure you do not encounter any unnecessary delays. A broker can not only access products but lenders too that are not accessible direct for example, Platform (Mortgage division of Co-operative bank) and Accord Mortgages (intermediary division of Yorkshire building society) along with specialist lenders like Precise Mortgages and Kensington Mortgages. Not using a broker could mean that you miss the very attractive rates that these mortgage companies offer and lose out on hundreds of pounds in savings.
Mortgage advice tailored to your situation 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.
The stress and hassle is taken away from you. This is one of the biggest and most time consuming commitments you are ever likely to make in your life. Using a broker means that all the hard work is done for you, and you can, in some cases, have a decision in principle and start the application process in the same day. The mortgage broker will package everything for you, and chase your solicitors right through to completion meaning you don’t have to. This will save you time which, let’s face it, is one of the few things in life you can’t put a price tag on!