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You may be wondering why you would reach out to a Mortgage Broker instead of going straight to your high street bank. What benefits are there to you, and are there any drawbacks? See our roundup below of the pros and cons of working with a Mortgage Broker vs. Going Directly to a Bank.
Pros
A mortgage broker often has access to a wide variety of mortgage lenders, meaning they are able to source the market and compare the mortgage products on offer from various high street and specialist mortgage lenders and building societies. It is always worth asking your mortgage broker whether they are independent and if they have access to a broad range of mortgage lenders, rather than being tied to a specific set.
Leading on from this, mortgage lenders sometimes offer mortgage brokers “intermediary exclusive” products. These are mortgage products that, you guessed it, are exclusive only to mortgage brokers. You would be unable to access these products by going direct to the bank. They may have a lower interest rate, a lower arrangement fee, or incentives such as cashback paid to you on completion of the mortgage.
A good mortgage broker will listen to your needs and your criteria and ensure that the mortgage lenders they approach are suitable for you. Sometimes, until we apply for something as important as a mortgage, we don’t realise how unique our income and household expenditure may be; and each mortgage lender has their own set of mortgage lending criteria to meet. One mortgage lender may not accept certain types of income, for example commission or overtime, whereas others will.
A mortgage broker can talk you through a mortgage illustration in depth, ensuring that you understand the mortgage product terms, any fees, and other fine print prior to committing to the mortgage, so there are no hidden surprises once you have completed on your mortgage.
When it comes to submitting a mortgage application, a good mortgage broker will “package” your case to the relevant mortgage lender. This means they will gather all of the necessary documentation required from you to submit to the mortgage lender. Packaging a case correctly first time can be the difference between waiting 2 weeks for a mortgage offer to 8+ weeks. The Mortgage Company Bristol prides ourselves on ensuring the mortgage lenders have as much documentation as they require for a smooth mortgage application process.
Cons
Fees – each mortgage broker is different in their charging structure. Some brokers charge a percentage based fee, others charge a flat fee, and some charge no fee. At The Mortgage Company Bristol, we review our fee structure to ensure that it is fair and representative of the service you will receive from us. Our fee will cover time spent with you from start to finish, and you will receive a personalised service for your mortgage needs throughout the process. Please see our fee structure tab to find out more.
If you don’t get the right mortgage broker, a mortgage application can take some time. It is a particular process that requires excellent attention to detail and a clear understanding of your needs, as well as your criteria. It’s very important to do your own research on the mortgage broker and their company before deciding to progress. Ask your friends and family for any mortgage brokers they have worked with and recommend, or look up Google reviews for the mortgage broker online.
A mortgage is secured on your home, your home may be repossessed if you do not keep up repayments on your mortgage. The guidance and/or information contained within this blog post is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK. There may be a fee payable for mortgage advice. The precise amount will depend upon your circumstances, and will be discussed with you before proceeding.