How to choose a mortgage broker

To make the home-buying process less overwhelming, confusing, and stressful, especially for first-time buyers, it’s important to work with the right professionals. Solicitors and mortgage brokers are two crucial components in this process. This guide will explain how to determine which professionals to work with.

What is a mortgage broker?

A mortgage broker is a licensed professional who acts as an intermediary between borrowers and lenders. They help borrowers find and compare mortgage options from different lenders, and assist with the application and approval process.

Do I need a mortgage broker?

While not a requirement to use a mortgage broker when obtaining a mortgage, it can very be beneficial. Working with a mortgage broker can save you time, money, and stress, as they can help you navigate the mortgage market and find the most suitable mortgage options for your needs. Additionally, mortgage brokers often have access to lenders that you may not be able to approach directly, which could provide you with more options and potentially better terms

For more information about why you should use a mortgage broker, read our helpful blog.

What are the benefits of using a mortgage broker?

Here are some advantages of using a mortgage broker:

Access to a wider range of lenders

Mortgage brokers often have access to a wider range of lenders and mortgage products than consumers can access directly. This means that they can help you find a mortgage that best meets your needs and financial situation.

Expertise and knowledge

Mortgage brokers are experts in the mortgage market and can provide guidance and advice on the best mortgage products available. They can also help you navigate the complex application process and answer any questions you may have along the way.

Time-saving

Applying for a mortgage can be a time-consuming process. mortgage broker can help save you time by handling much of the paperwork and communicating with the lender on your behalf.

Cost-effective

While mortgage brokers do charge a fee for their services, they can often save you money in the long run by finding the best mortgage product with the lowest interest rate and fees.

Tailored advice

A mortgage broker can provide personalised advice based on your specific financial situation and needs. They can help you understand the pros and cons of different mortgage products and find one that’s tailored to your needs.

Less stress

Applying for a mortgage can be a stressful process, especially if you’re not familiar with the market. A mortgage broker can help reduce the stress by handling much of the process for you and providing guidance and support along the way.

Overall, using a mortgage broker can help you find the best mortgage product for your needs, save you time and money, and provide expert guidance and support throughout the process.

How to find a mortgage broker?

There are several ways to find a mortgage broker:

• Word of mouth: Ask friends, family members, or colleagues who have recently bought a property for recommendations. Personal referrals can often be the most reliable source of information.
• Estate agent recommendations: Many estate agents work closely with mortgage brokers, and they may be able to recommend someone they trust.
• Online: There are many online directories that list mortgage brokers in your area, and you can use search engines to find brokers with good reviews.
• Professional organisations: Check with professional organisations such as the National Association of Mortgage Brokers to find licensed brokers in your area.
• Local newspapers and magazines: You may find ads or articles about local mortgage brokers in your community newspapers or magazines.

How to choose a mortgage broker

When selecting a mortgage broker, consider the following factors:

• Reviews: Look for reviews from previous clients to get an idea of their experiences with the broker. Check review websites, social media platforms, and the broker’s website.
• Whole of market or panel of lenders: Determine whether the broker has access to a wide range of lenders or just a select panel. A broker with access to the whole market will be able to offer you more options.
• Qualifications: Check if the broker is qualified and registered with relevant regulatory bodies, such as the Financial Conduct Authority (FCA) in the UK. You can also check if they are a member of a professional organisation, such as the National Association of Mortgage Brokers (NAMB).
• Experience: Consider how long the broker has been in business and how many clients they have helped. More experienced brokers may be better equipped to handle complex situations.
• Professionalism: Check the broker’s website and social media presence. A professional-looking website with helpful resources and informative content can indicate a reputable and reliable broker.
• Referrals: Ask if anyone you know has used the broker before and ask about their experience.

By considering these factors, you can make an informed decision when choosing a mortgage broker. It’s also a good idea to interview potential brokers.

What questions to ask a mortgage broker

Here are some important questions to ask a mortgage broker:

• How long have you been a mortgage broker, and how many clients have you helped in that time?
• What is your experience with my specific type of mortgage or financial situation?
• Are you a whole-of-market broker, or do you have a limited panel of lenders?
• What fees do you charge, and how do you receive payment for your services?
• Can you provide me with a breakdown of the costs associated with obtaining a mortgage, including any legal fees or stamp duty?
• What interest rates and mortgage terms are available to me based on my financial situation and credit history?
• How long will it take to obtain a mortgage, and what is the process involved?
• Can you explain the different types of mortgages available, such as fixed-rate and variable-rate mortgages, and their pros and cons?
• How do you keep me informed during the mortgage application process, and who can I contact if I have questions or concerns?
• What happens if my mortgage application is rejected, and how can you help me navigate this situation?

Asking these questions will help you determine whether the mortgage broker is knowledgeable, experienced, and a good fit for your needs.

Do I need a local mortgage advisor?

No, you don’t necessarily need to see a local mortgage broker in person. Many brokers offer their services online or over the phone, making it possible to complete the entire process remotely. This can be particularly convenient if you are unable to meet in person or if you live in a different location from the broker.

However, if you prefer to meet with your mortgage broker in person, or if you feel more comfortable doing so, you can certainly seek out a local broker.

What do mortgage brokers charge?

Mortgage broker fees can vary depending on the broker and the services they provide. Some brokers charge a fixed fee, while others charge a percentage of the mortgage amount. Here are some typical fees charged by mortgage brokers:

1. Fixed Fee: Some brokers charge a flat fee, usually ranging from £250 to £500, for their services.
2. Percentage Fee: Some brokers charge a percentage of the mortgage amount, typically 0.5% to 1.5%. For example, if you are borrowing £200,000 and the broker charges 1% of the mortgage amount, you would pay £2,000 in fees.
3. No Fees: Some brokers do not charge any fees at all. They make their money from the commission paid by the lender.

For more information on how to choose a mortgage broker, please contact a member of the Strive team, by emailing info@strivemortgages.co.uk or call us on 01273 002697.