Buying a house is stressful whether it is your first time or your tenth.
You want to get the right mortgage deal to make your dream possible but there seems a bewildering number of products and companies all clamouring for your attention.
That’s why finding some advice about mortgages form website such as from Niche Mortgage Info can be an ideal way to get the best deal and reduce stress. Here are 5 things you need to know about mortgage brokers.
1. What does a mortgage broker do?
To start with, what does a mortgage broker do? The answer is that they are a financial advisor who specialises in mortgages and helps you find the right mortgage for your budget and needs. They can use their experience and knowledge to help you get the right product and they have a duty of care to you to mean they need to justify the recommendations they make.
A mortgage broker will help you go through the factors that influence a mortgage such as the amount of deposit you have, monthly payments, interest rates and your own personal details. This information all factors into the decision about which mortgage product is best.
2. Are all mortgage brokers the same?
Mortgage brokers come in lots of different types but there are two main categories to understand:
- Tied or multi-tied – this is where the broker is tied to one or a group of lenders and can only recommend products from their ranges. They do get deals and incentives with these lenders that others don’t, but they are limited in who they can offer
- Whole market – these brokers cover the whole of the market and aren’t tied to any lender or group. This means they have a larger pool of products to look at and there are no ties that make them recommend specific ones. They don’t always cover every single product on the market but usually have a wider range than a tied broker
3. Why use a mortgage broker?
There’s nothing to stop you going straight to a lender and asking them about their mortgage products but there are some strong benefits that make it worthwhile going through a mortgage broker instead.
First, they are trained professionals who know the field and are duty-bound to help you get the right mortgage. This means you don’t end up with an unsuitable product and if something did go wrong, you have the come-back of the Ombudsman to complain to.
They can save you a lot of time by comparing a range of products, especially if they are whole market brokers. This means you get the best deal and don’t have to go through all of your details multiple times. This can also save you money as they often have exclusive deals with lenders.
4. Is there anything to be worried about using a broker?
The first thing to know is that mortgage brokers do charge for their services – that’s how they are in business. Tied brokers will usually get a percentage of the mortgage, normally around 1% which is paid directly to the lender and they also get a commission as well.
Whole market brokers tend to charge a flat fee which is often around £500 but they must be transparent and tell you what the fee is before you commit to anything, so you know how it works. There is also some cross-selling from brokers for other services such as insurance.
Finally, don’t be told you have to use a specific broker by an estate agent – you can use anyone or no-one if you want to go directly. You can’t be pushed into using a broker through an estate agent unless you want to.
5. How do you choose a broker?
Choosing the right broker is often a combination of research, instinct and information. Ask around friends and family to see if anyone can recommend a broker that they have used – or warn against ones they had a bad experience with. Ask the estate agents, banks and anyone in the financial industry.
Online brokers are also a great idea because it doesn’t matter where you are and where they are. You can find brokers online who specialise in different types of mortgage too. Always make sure they are fully qualified, and you can even check the financial services register before committing to be sure.
