If you’ve taken the decision to buy a new home, this must be a pretty exciting time for you. However, if you’re looking to finance that home, you may also be stressed out about the process of finding a good mortgage from the many thousands on offer. There are many advantages to using a mortgage broker to help you do this.
Mortgage brokers have extensive market knowledge and experience. This enables them to partner customers with lenders that offer deals that are both affordable and suitable for the customer’s circumstances. They also provide sound expert advice and can help make a customer’s application get approved quicker.
Read on to find out more about the advantages of using a mortgage broker to find a great financing deal for your new home. We’ve also included some useful tips you can use when searching for a broker.
What Is a Mortgage Broker?
A mortgage broker is a qualified professional that acts as an intermediary between those looking to finance a home and mortgage lenders. These brokers can be working independently or as part of a mortgage brokerage company.
The job of a mortgage broker is to work hand-in-hand with you to help find the mortgage deals that suit you and your situation the best. They do so by assessing your needs and preferences and using their experience, connections, and knowledge of the market to find the best mortgage options for you.
Benefits of Using a Mortgage Broker
Making use of the services provided by mortgage brokers has many benefits and advantages. Here are some of them:
Helps You Save Money
The number one perk of opting to go with a mortgage broker instead of approaching lenders directly is that you’re much more likely to get a better deal on your mortgage. This is true for a number of reasons.
First of all, mortgage brokers offer you a much wider view of the market than you would have if you tried to go through the mortgage process by yourself. Part of their job is to meticulously scan all the available deals from many lenders.
This means that they’ll open your eyes to a more diverse range of mortgage deals that you won’t be able to find on your own. In turn, there’s a great chance of them finding a deal that’ll set you back significantly less.
Mortgage brokers can also save you money by providing you with an enhanced level of transparency when it comes to the deals you’re considering.
Through their years of experience, they know well what hidden fees and conditions to look out for. Therefore, consulting a mortgage broker will have you armed with all the necessary information to make the best financial decision when it comes to your mortgage.
Gives You Access to Expert Advice
Another significant advantage of using a mortgage broker is that you have a market expert right by your side helping you make the best decision.
This is extremely important given the fact that the mortgage market is a dynamic, ever-changing one.
A mortgage broker has the know-how of gathering all the relevant information about your case. They can find you a deal that not only is the cheapest one, but is also the one most well-suited to your needs.
There are many pieces of information that your mortgage broker will take into account when curating the best mortgage deal for you. They include your income, employment type, credit history, and any payable debts you may have.
The type of house you wish to buy can also affect the range of available lenders. Specialist property mortgages are needed for uninhabitable properties, barn conversions and thatched roof cottages to name just a few.
For some people, getting through the mortgage process in a timely manner may be more important than getting the cheapest deal. If this is you, all you have to do is make your needs clear to your broker and they’ll be happy to oblige.
Boosts the Chance of Your Application Going Through
A mortgage application is no small endeavour. It involves a lot of hoops you have to jump through to get to the finish line.
By using a mortgage broker, you’ll have a trusty sidekick to assist you in clearing any obstacles along the way. This’ll boost your chances of a successful application.
One of the biggest roadblocks to a successful mortgage application is the credit check that’ll inevitably be conducted on you by the lender in question. This involves the lender viewing your credit report and seeing if your credit history is up to scratch.
Without the help of a mortgage broker, sorting out any issues you may have with your credit score is going to be a formidable task. If you decide to go with a broker, they’ll do everything in their power to smooth over any credit history problems that may hinder the success of your application.
Additionally, brokers that have been working closely with lenders in the market for years are likely to have solid relationships with them. They have the inside scoop on changes in the eligibility criteria enforced by lenders. In turn, they can provide you with this information and have you ready for anything.
Makes the Paperwork Easier
As is the case for any financing application process, the paperwork involved in applying for a mortgage can be an absolute nightmare, especially if you don’t have an experienced hand guiding you through it.
Hiring a mortgage broker will help alleviate the pressure of the sheer quantity of paperwork and legal formalities from your shoulders. Part of a broker’s responsibilities is to do all the heavy lifting for you in this regard.
This involves filling out the paperwork for you in advance and only requiring you to sign the papers and provide the needed documents.
Commercial finance requires quite a lot of form filling and additional information. This would include a commercial mortgage or semi-commercial property mortgage, where part of the property will be used by a business.
In turn, having a mortgage broker gives you one less thing to worry about during the hectic process of finding a mortgage for your new (or existing) home.
Makes it Easier for Special Cases to Get a Mortgage
The cold, hard truth is that it’s easier for some people to get approved for a mortgage than others. Lenders are typically more willing to proceed with individuals that are employed at a company and have a steady stream of unified income.
For people who are self-employed or have a variety of irregular income sources, going through the mortgage application process on their own and getting approved is virtually impossible. This is where the savviness and knowledge of a mortgage broker can be an invaluable asset.
Through their years of experience, mortgage brokers will know exactly what to do in these situations. They’ll use their knowledge of eligibility criteria and policies of different lenders to find one that’ll be happy to oblige and approve your application for a mortgage.
Helps You Save Time
Another major advantage of utilising the services of a mortgage broker is that it helps you avoid wasting your time and energy.
Let’s face it, a mortgage broker has a better knowledge and outlook of the market than you do.
Therefore, a mortgage offer that you may see as a surefire deal may be one that’s likely never going to get approved in a broker’s eyes. Chances are they’re probably right.
This is why using a mortgage broker will allow you to find the deal that’s not only the best money-wise, but is also one that has a great chance of getting approved given your circumstances.
Award winning service
Independent mortgage advice
Mortgage experts
How much does a mortgage broker cost?
While there are some brokers that offer a ‘fee free’ service, the majority do charge a fee for helping clients.
Depending on the lender, the adviser may also receive a commission payment paid directly from the mortgage company.
There’s no set scale of fees and so brokers are free to charge an amount appropriate for their experience and expertise.
Some will offer a fixed fee range; £300-£1000, depending on the loan type.
Others work on a percentage of the loan arranged; 0.50%-1.0%.
All of these fees should be explained to you before you commit to a particular mortgage arrangement.
On a separate page we also answer the question: Do mortgage brokers charge a fee?
What Qualifications Should Your Mortgage Broker Have?
As we’ve previously mentioned, finding a mortgage for your new home is a life-changing step. Therefore, it makes sense to be careful when choosing a mortgage broker to assist you in it.
When vetting potential brokers, one of the key factors you should take into consideration is the qualifications they have. You should never consult a mortgage adviser that doesn’t hold the minimum qualifications prescribed by the Financial Conduct Authority (FCA).
These qualifications are:
- Certificate in Mortgage Advice and Practice (CeMAP)
- CeMAP Diploma – an advanced CeMAP qualification
- Chartered Insurance Institute Certificate in Mortgage Advice (Cert MA)
- Certificate in Regulated Equity Release (CeRER)
If you wish to verify a certain broker’s registration status, you can easily do so. All you’ll have to do is access the FCA register and search for that individual by name. If the broker works as part of a brokerage, you can also search for them by company name.
What Is the FCA?
The Financial Conduct Authority (FCA) is the official governing body that oversees the operation of both independent mortgage brokers and brokerage companies. Basically, a person cannot legally work in a mortgage brokerage within the UK without being registered with the FCA.
The role of this organisation is to protect those looking for mortgages from malpractices, such as bad advice and conflict of interests.
Your broker’s experience
It is mandatory for all brokers to be qualified to a minimum level and registered with the FCA. Where they provide advice on equity release mortgage products they additionally must hold the CeRER as noted above.
But probably more important than the qualifications is an advisers experience in dealing with customers mortgages, liaising with lenders and solving problems. An exam does not make a mortgage broker good, it makes them competent (according to the FCA).
We would suggest asking your adviser for a brief history of their experience and what types of customers they have helped. You want an adviser who is familiar with helping people in your situation. For example, if you are a construction subcontractor then you would be best served by using a broker who understands the CIS system and how CIS mortgages work.
In summary
There are many advantages to using a mortgage broker over a bank. Not only can a broker help you find a cheaper deal, but they can also help you find a deal that’s tailored to your situation.
Additionally, mortgage brokers can boost the chances of your application being approved. This is especially true if you’re self-employed or a CIS subcontractor, or perhaps you need a concrete house mortgage. Brokers have the experience and knowledge to facilitate the paperwork and the legal procedures involved in your mortgage application. This can go a long way in helping you get the green light from a lender more quickly.
However, you should always make sure that the broker you deal with holds at least a CeMAP qualification from the FCA and is experienced. You should also ensure that both you and your broker are clear on the fees required and how they’re going to be calculated.
