Using a mortgage broker can be an invaluable way to get through the mortgage application process. They can save you time and help you to find a great deal.
A good broker should listen. After all their job is to find the right mortgage that suits you. They’ll ask you plenty of questions to make sure that they are looking at the right type of products. But the process also works both ways. You’re just as entitled to ask questions of your mortgage broker. This will help to ensure that your broker is the right one for you.
Are you a whole of market broker?
Some lenders will only work with a selected panel of lenders. This can restrict your choice somewhat.
Where possible, try and opt for a broker that advertises themselves as ‘whole of market’. This means that they have access to a greater range of products. This means you are more likely to find a deal that’s suited to your circumstances.
Are you regulated?
All mortgage brokers within the UK must be regulated by the Financial Conduct Authority (FCA). Alternatively they should be an agent of a regulated firm. Before taking on the services of a broker, you should check their credentials to make sure they are legitimate.
Using a firm regulated by the FCA ensures you receive quality advice. It also provides you with access to the FCA complaints procedures, should anything go wrong.
You can easily check if a broker is regulated by viewing the FCA register.
How are you paid?
Some mortgage brokers charge a fee for their service. This could be a fixed-fee or it will be a small percentage of the amount you wish to borrow. Other mortgage brokers don’t charge at all, instead they are paid a commission from the lender whose mortgage you take out.
Whatever their method of payment, a mortgage broker should tell you this at the outset.
Whilst a no-fee broker may sound appealing, it can come with the worry that they may brush aside impartiality in order to push you towards a loan that pays the highest commission. However, under FCA rules, there are strict penalties for brokers that mis-sell mortgages in this way, so you shouldn’t feel too concerned.
Will I get approved for a mortgage?
It can be a worrying time, wondering if you’ll qualify for a mortgage or not. Whilst a mortgage broker can’t offer a solid guarantee that you’ll be accepted, they can help to find you the products that are the most suited to your circumstances. Applying for a mortgage with no experience could lead to your application being denied. This could then have a negative impact on your credit rating.
Mortgage brokers have expert knowledge of the market. They will generally know the criteria that each lender will expect you to meet. For example, if you have a poor credit rating you may not be eligible for a standard mortgage. A mortgage broker will be aware of the products which you could apply for.
Working with you on the details, a broker can narrow these down to the loans that you are most likely to be accepted for, saving you a lot of legwork in the process.
What can you offer that a high street lender can’t?
It’s easy enough to pop to the high street and find out what mortgages are on offer. A broker should be able to persuade you why you should use their services instead.
Ultimately, there are a number of benefits of using a broker over a traditional high street lender. A lender will only be able to offer you their own products. A whole of market broker will be able to help you select from hundreds of products.
They can also negotiate special deals which wouldn’t necessarily be available direct from the lender.
Using a broker has additional benefits beyond the amount of products available. They can also offer assistance through the application process and will often be able to give you advice on a number of other products in addition to your mortgage.
The above post does not constitute advice – financial, legal or otherwise. The information within this article is the author’s own opinion and do not necessarily reflect the views of SO Media or So Smart Money.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.