The process of applying for a mortgage can be a complicated one and the figures involved are usually considerably more than you’d ever spend on a personal purchase. It’s really important, therefore, that you end up with the most appropriate mortgage deal for you, your potential property purchase and your personal circumstances; the most effective way to do so is to recruit the services of an independent mortgage broker.
What is an Independent Mortgage Broker?
Mortgage Brokers are specialist professional individuals who work specifically on securing finance for property purchases. They act as a relationship manager between lender and borrower to identify the best and most appropriate mortgage deal, to apply for it properly, and to ensure that the funding is deposited and ready to buy the property in question when needed.
There are three main types of mortgage brokers: those who work for a single lender (tied brokers), those who work with a set pool of lenders (multi-tied brokers) and those who have access to the whole market (independent brokers). All can work as a sole trader or as part of a larger firm.
Based on the criteria that they have the widest product range to work with, independent mortgage brokers are the least likely to be biased and are the most capable to seek out the best value deal. They may specialise in one type of mortgage, or several.
Mortgage brokers make their living in two ways – either through commission paid directly to them upon completion of the deal by the mortgage lender, or through a set fee paid for by the buyer. Any costs incurred should be declared before broker and buyer start working together and, with independent mortgage brokers, there may be room for negotiation.
The Benefits of Using An Independent Mortgage Broker
Brokers Save you Time
Looking through every mortgage deal on the market, identifying the relevant ones and then narrowing it down to the ones you’re eligible for, all before even applying for one, is no mean feat. Independent mortgage brokers have access to all lenders’ latest deals alongside the expert industry knowledge to quickly establish which are relevant, which are appropriate, and which are the best value for money. Unless you have a lot of time on your hands to navigate the marketplace yourself, using the services of an independent mortgage broker can save you a great deal of time.
Brokers Can Avoid Negative Impacts on Your Credit Score
It’s not often considered, but using an independent mortgage broker can help protect your credit file. If you go it alone and accidentally apply for a mortgage you’re not eligible for, or find yourself unable to supply all the information a lender requires to give approval (and there’s often a lot of it!), it can leave a black mark on your credit file and will show up as an application refused. Brokers understand exactly what data lenders need and can avoid products that aren’t appropriate for your circumstances, or that you’re unlikely to be eligible for.
Brokers Have Access to Mortgage Deals That Individuals Don’t
Mortgage lenders are keen to bag quality customers and they know that mortgage brokers are in the best position to find the kind of people they want to lend money to. Lenders, therefore, offer different deals to independent mortgage brokers than they do to individuals applying by themselves. Often the best value is derived from using a broker – not least because they can compare every mortgage product out there, as well as having access to exclusive deals.
If Something Goes Wrong, a Broker Can Help
Applying for a mortgage by yourself without independent financial advice is known as an ‘execution-only’ mortgage, and if something goes wrong, you’re in a limited position to take action (primarily because you will have knowingly accepted advice from biased lenders toward their own products). When using the services of an independent mortgage broker, the buyer is protected through their professional duty of care. Mortgage brokers in the UK are regulated by the FCA (Financial Conduct Authority) with their credentials listed in the Financial Services Register. If you are given incorrect or misleading financial advice from a broker and consequently find that your mortgage is unfit for purpose, you can file a complaint with the FCA and can be compensated for any losses.
Brokers Offer Expert Help… From End-to-End
Anyone who has taken part in the property purchasing process knows that it’s not simple – and often not very time-effective as a result. A good independent mortgage broker will liaise between the buyer, the lender, the conveyancing solicitor and any estate agent involved. This helps keep things moving and smoothes the journey by adding another person on the buyer’s side to push things along. Your mortgage broker is with you throughout the process until completion on your new purchase, and can often help advise on any property-related funds afterwards, too.