This guide looks at whether you should use a mortgage broker and how they can help. This guide discusses:

What is a mortgage broker?

A mortgage broker or mortgage advisors is someone who is qualified to act as an intermediary between you and a lender to arrange a mortgage on your behalf.

There’s three main types of mortgage brokers:

  • Tied brokers – they only work with one lender and can only offer you rates from that particular lender
  • Multi-tied brokers – they work with a small group of lenders, often referred to as a ‘panel’. They can offer you rates from the selection of lenders they work with but not the whole market
  • Independent or whole of market brokers – they work with all lenders across the UK to source you the best deal

You should always work with a whole of the market mortgage broker, as they have no restrictions and a greater ‘panel’ of lenders use. This means there’s more choice and ensures that you get the most competitive deal for your situation.

What does a mortgage broker do?

A mortgage broker will search their ‘panel’ and advise you on the best deal they can find. They will run a ‘fact find’ process, which will give them an understanding of all monthly outgoings, employment history, income and your financial preferences.

This will then allow them to find a mortgage to match and suit all your preferences. They’ll then provide a recommendation on the mortgage deal they’ve sourced and the surround details. This will include the rates, term, monthly payment and any addition features such as; over payment options.

Once you’re happy with the recommendation and return all the necessary paperwork, they’ll then liaise with the lender and manage the remainder of your application.

Should I use a mortgage broker?

This is down to personal preferences, there are plenty of pros and cons to using a mortgage broker and going direct. Over recent years, there’s been plenty of changes to the finance and mortgage industry, meaning mortgage advisors have to go through more stringent checks and gain more intense qualifications.

When buying your first home, moving home or remortgaging it’s very easy to stick with your bank/building society or your current provider, however you might not be getting the most competitive rates.

Pros and cons of going direct to a lender

Pros

Cons

  • You avoid paying broker fees
  • Only get ‘direct only’ deals
  • Advice is only for their products
  • You won’t have access to ‘broker-only’ deals
  • No personalised service
  • Typically a higher rate of interest
  • If you get rejected you’ll have to go elsewhere
  • No end to end caseworker

Using a broker will give you greater flexibility and will take the heavy lifting off you. A respectable mortgage broker will work your case from start to finish, keeping you updated every step of the way.