A mortgage broker is an intermediary between individuals and mortgage lenders. The fundamental job of a mortgage broker is to secure the best, most competitive mortgage available which meets the current and prospective future needs and objectives of the client. In this blog we’ll look at the role of a mortgage broker and some of the misconceptions around it.
Banks and Building Societies have highly specific and detailed mortgage lending criteria. This determines what type of individual, or company, they will lend to and how much they will lend. Comprehensive knowledge of lending criteria is what allows a mortgage broker to then advise based on individual circumstances. The element of personalised advice, based on an immeasurable number of variables, is why a price comparison site cannot compete with a broker. Being able to look across the market allows brokers to quickly compare mortgages and choose the cheapest and most appropriate lender. Then comes the time-saving benefit – perhaps the biggest benefit for some. After researching the best mortgage, a broker will then submit the application and liaise with the potential lender to ensure they are happy to proceed and issue the mortgage offer. This saves you time on hold going back and forth with the lender, often sitting on hold for hours, only to be told to ring back next week. Not to mention often having to wait weeks for an appointment.
Now we’re obviously biased and of course we think using a mortgage broker is the best option… Some people do have reservations about using a broker and there are also many misconceptions about the role of a broker.
Brokers don’t determine whether the bank will lend to you. A broker can present your mortgage application to the lender in the best way possible and ensure the lender understands any areas of potential uncertainty or concern. Ultimately however, it is the lenders underwriting team who decide whether they’re happy to proceed or not.
Mortgage brokers don’t determine the interest rates available. Brokers can look across the mortgage market to compare interest rates and often have access to exclusive products not available directly with lenders. Brokers cannot change the interest rates offered by the lender.
Not all mortgage brokers charge fees is a common misconception. All mortgage brokers receive a commission payment from the mortgage lender meaning many, like ourselves, choose not to charge you any extra on top of this. Most brokers do still charge fees whether that be on appointment, application, mortgage offer or completion. However, some of the biggest and most established firms across the UK charge no fees.
Brokers favouring certain products for the wrong reasons… Whether that be they pay higher commission, they involve less work or any other reason that isn’t what’s best for the client. Unfortunately, this isn’t always due to misconceptions – in any industry there are good apples and a minority of bad apples. Choosing a well-respected broker with good reviews or based on a recommendation from someone you trust should set you on the right track!
Arranging mortgages can often involve fitting square pegs in round holes. Knowledge of lender underwriting risk appetite allows a broker to bend and flex criteria with the necessary pre-approval. Having a good broker working in your corner saves time, money and stress! While we can’t promise it’ll be an entirely stress-free process, using a qualified professional gives you the best chance of getting the best mortgage available to you.