What are the advantages of using a mortgage broker?
First and foremost, using a mortgage broker will take the leg work out of looking for a mortgage; they’ll search the market and compare the different deals that are available to you, looking at not only the interest rates on offer but other charges such as booking fees. These may affect the overall cost of your mortgage.
When a mortgage broker makes a product recommendation to a client, he or she gives financial advice. This means that mortgage brokers must have qualifications in order to operate within their field - and that they have a duty of care to their clients to give the best advice possible.
If you take out a mortgage via a broker and it later transpires that you’ve done so based on incorrect information or an error, you’ll have recourse to complain and seek compensation.
That’s unlikely to be the case if you take out a mortgage without seeking advice and later decide it wasn’t the right deal for you.
Some mortgage brokers - particularly those who are experienced - may also have contacts at different banks and building societies that will help to ensure your mortgage application is processed smoothly and efficiently.
Finally, a good mortgage broker should be able to help you with making other financial decisions that are often associated with moving home. You might find they can recommend an appropriate life insurance policy for you, or find you a good deal on buildings insurance.
Our partner mortgage broker, London & Country, offers fee-free independent mortgage advice whether you make an application or you don’t. You can call free from your landline or mobile on 0800 073 1943.
Is there anything I need to watch out for?
Yes. If you use a mortgage broker, it’s important to know whether or not they are ‘whole of market’ or tied to a particular lender or group of lenders (usually called a panel).
If your mortgage broker isn’t able to recommend deals from the whole market, he or she won’t be able to tell you about some deals - even if one of them might be the cheapest option for you.
Some mortgage products simply aren’t available to brokers. These tend to be called ‘direct only’ deals, and are offered by banks and building societies directly to their customers. A mortgage broker - even one who is able to access ‘whole of market’ deals - is unlikely to be able to advise you about these.
You must make sure you know how much of the market your chosen mortgage broker is able to access before agreeing to work with them.
It’s also important to know how your mortgage broker will be paid. Some take commission from lenders, while others will charge you a fee for their services. Mortgage advisors who offer you the choice have the right to call themselves ‘independent’.
All mortgage brokers are required to provide you with a document called a Key Facts Illustration (KFI) about their services, how much their work will cost and how they will be paid. Always check it and ensure you’re happy with the contents before signing on the dotted line.
Can I find a mortgage for myself without using a broker?
Yes. You can search the mortgage market yourself and pick the deal that you think’s best for you. Once you’ve found the right product, you’ll have to apply for the mortgage directly by contacting your chosen lender.
MoneySuperMarket’s mortgage channel offers a variety of mortgage comparison tables that will help you start your search for the right deal, whether you’re a first-time buyer, looking to move home or are a buy-to-let investor.