Finding a mortgage can be overwhelming. With so many mortgage products and lenders out there, how do you know you’re getting the best mortgage deal? This is where a mortgage advisor can help. But do mortgage brokers really get you the best deal or should you consider other options?
What is a Mortgage Broker?
A mortgage broker is a financial expert who acts as the link between borrowers and multiple lenders. Their job is to find a deal that suits you. Unlike going direct to your own bank, brokers work with a wider range of lenders including specialist lenders, building societies and credit unions. This means access to broker only deals and competitive rates that wouldn’t be available otherwise.
How Mortgage Brokers Save Time and Money
Whole of Market
Some brokers are whole of market brokers, meaning they can compare deals from many lenders not just one. This gives you more choice, more chance of getting the best deal.
Personalised Recommendations
By assessing your financial situation, credit report and requirements, brokers match you with the right lender. Whether you’re self employed or have bad credit, they can connect you with specialist lenders who cater for unique situations.
Bargaining Power
Brokers have established relationships with mortgage lenders and understand how lenders work exclusively. This insider knowledge can lead to lower interest rates or avoiding higher interest rates that might apply if you went to a bank directly.
Handling the Mortgage Process
The mortgage journey can be time consuming and complicated. Brokers manage the application process, making sure all paperwork is accurate and submitted on time. This reduces the risk of delays or mistakes and allows you to get on with moving.
How Much Does a Mortgage Broker Cost?
While brokers can save you money in the long run, it’s worth understanding broker fees. These can be upfront fees or a commission paid by the lender. Some brokers are fee free, some charge both. Before committing to a broker ask about their mortgage broker fees and do they promote sponsored products. A good broker should always put your mortgage needs before earning a higher commission.
Do Mortgage Brokers Always Get You the Best Deal?
A common question is whether mortgage brokers get better deals than approaching a bank directly. It depends on your situation and the broker you use. While brokers get you better rates, not all brokers are whole of market. Some only work with a limited panel of lenders and may miss the best mortgage deal for you.
Also comparison tools and internet rates tables may show competitive rates that brokers don’t. But these tools don’t take into account personal factors like your credit report or the fees associated with a product.
Why Use a Mortgage Broker
- More Options: Brokers can access many lenders and get broker only deals.
- Expert Help: A mortgage advisor simplifies the mortgage process and gives you advice.
- Personal Solutions: For self employed, bad credit, complex income or niche borrowers.
- Saving Money: Brokers like Eden Hawk Financial Services can get lower interest rates or waive extra fees.
Disadvantages of Using a Broker
- Bias: Some brokers will promote lenders that pay higher commissions.
- Extra Costs: Broker fees add to the overall cost of the mortgage.
- Limited Choice: Not all brokers are whole of market so some options are excluded.
Specialist Lenders for Unique Situations
If you’re outside the norm – self employed or bad credit – a specialist lender may be your best option. These lenders offer products that mainstream banks don’t. A whole of market broker can connect you with these niche solutions and get you a competitive mortgage deal without the hassle.
Using Comparison Tools with a Mortgage Broker
While a broker does most of the work, online comparison tools can be a useful add on. These tools show internet rates tables so you can compare products across banks, credit unions and building societies. Combine this research with a broker’s advice and you’ll cover all bases.
Transparency in the Mortgage Process
Choosing the right broker is key. Look for brokers who disclose their broker fees, payment structures and any sponsored products. A good broker will put your needs first so you get the right deal at the lowest cost. This transparency gives you confidence in their recommendations.
Do You Go Direct or Use a Broker?
For some borrowers going direct to their own bank or using online tools is enough. Banks may offer loyalty discounts or exclusive mortgage rates, but these can’t always compete with what a broker can find. If you’re short on time or need access to specialist lenders a broker’s expertise can be worth it.
Conclusion: Are Mortgage Brokers Worth It?
Using a mortgage broker can simplify the process and get you a mortgage deal that’s right for you. Not all brokers get you the best deal but their ability to navigate the mortgage market, handle the application process and negotiate terms is often worth it.