Given the vast sums of money required to buy a home in today’s market and the steady increase in the cost of living, there’s never been a better time to obtain reliable sound mortgage advice.
This guide explains why if you’re looking to buy a home, having a good mortgage broker like Strive on your side could prove to be invaluable.
What is a mortgage broker?
A mortgage broker acts as an intermediary between a borrower and a lender to help the borrower obtain a mortgage.
Mortgage brokers work with multiple lenders and can assist borrowers in finding the most suitable loan options based on their financial situation, credit history, and other requirements.
What does a mortgage broker do?
They provide guidance throughout the mortgage application process, including pre-approval, submitting the application, and closing the loan.
Benefits of using a mortgage broker
Mortgage brokers have access to a vast network of lenders and mortgage products, which allows them to compare thousands of deals on behalf of their clients.
They can use their expertise to assess a borrower’s financial situation and needs, including their income, credit score, and down payment amount.
Based on this information, the mortgage broker can search for suitable loan options and compare the interest rates, terms, and fees associated with each option.
Mortgage brokers have access to a wide range of lenders, including large banks, credit unions, and specialised mortgage lenders.
They can also consider deals from lenders that are not available directly to the public. By working with multiple lenders, the mortgage broker can provide their clients with a more comprehensive selection of options than they may be able to find on their own.
Other helpful mortgage advice
A good mortgage broker will provide assistance throughout the mortgage transaction, including liaising with solicitors, estate agents, and surveyors.
They also offer guidance and support for all property-related queries that may arise during the home-buying process.
In addition to helping clients compare mortgage products and find the most suitable loan options, mortgage brokers can also provide valuable insights and advice on property-related matters.
This may include information on property values, neighbourhood trends, and the impact of local regulations or planning restrictions.
Mortgage brokers can provide ongoing support and assistance, even after the mortgage has been approved and the property purchase completed.
They can help clients manage their mortgage payments and provide guidance on refinancing or other financial matters that may arise over time.
Complete the mortgage application & paperwork
When it comes to applying for a mortgage, there is a lot of paperwork involved. Mortgage brokers can help their clients navigate this paperwork by taking care of many of the administrative tasks involved in the application process.
First, the mortgage broker will gather all the necessary documents and information from the client, including income verification, bank statements, and other financial documentation.
They will then use this information to prepare the mortgage application, ensuring that all the necessary details are included and that the application is completed accurately and thoroughly.
Once the application is submitted, the mortgage broker will liaise with the lender on behalf of their client, ensuring that any questions or concerns are addressed promptly.
They can provide updates on the progress of the application and help their clients understand any conditions or requirements that may need to be met before the mortgage loan can be approved.
Do mortgage brokers get better interest rates?
It is not uncommon for mortgage brokers to have access to exclusive rates that are not available directly from the bank or to the general public.
These rates can be a valuable benefit of working with a mortgage broker, as they may be able to find a mortgage product with a lower interest rate or better terms than what is available through traditional channels.
Because mortgage brokers work with multiple lenders, they may have access to a wider range of mortgage products and rates, including those that are not widely advertised.
Additionally, because mortgage brokers can often bring lenders a significant amount of business, lenders may offer them exclusive rates as a way to incentivise them to bring them more customers.
Why use a mortgage broker over your bank?
There are several advantages to using a mortgage broker over going directly to your bank for a mortgage.
Here are some of the key reasons to consider working with a mortgage broker:
- Access to a broader range of lenders and mortgage products: While banks typically offer their own mortgage products, mortgage brokers work with multiple lenders, giving borrowers access to a wider range of mortgage products and rates. This means that a mortgage broker can help you find a mortgage product that is tailored to your specific financial situation and needs.
- Convenience: Working with a mortgage broker can save you time and effort. Instead of having to research mortgage products and rates on your own, a mortgage broker can do the legwork for you. They can also handle much of the administrative work involved in the mortgage application process, freeing up your time
- Cost savings: Mortgage brokers may be able to negotiate better rates and terms on your behalf, potentially saving you money over the life of your mortgage. They may also be able to help you avoid certain fees and charges that can be associated with obtaining a mortgage directly from a bank.
5 Things to think about when choosing a broker
- Do they have good reviews?
- How much is their fee?
- Do they communicate with their customers in a modern way?
- Do their website and branding look professional?
- How quickly do they respond to you from your first contact?
Drawbacks of Using a Mortgage Broker
Mortgage brokers provide a valuable service in helping borrowers find the right mortgage product for their needs.
While some brokers may charge a fee for their services, others may not. For those that do charge a fee, the amount and timing of the fee may vary.
In some cases, a mortgage broker may charge a fee upfront at the time of application. This fee may cover the cost of the broker’s time and expertise in helping the borrower navigate the mortgage application process.
Other brokers may charge a fee upon completion of the mortgage or even as a percentage of the loan balance.
The fee charged by a mortgage broker may depend on the size and complexity of the case.
For example, a borrower with a complicated financial situation may require more time and effort on the part of the broker, leading to a higher fee. On average, however, the fee charged by a mortgage broker is typically around £300-£500.
How are mortgage brokers paid?
Mortgage brokers are typically compensated through commissions paid by the lender or borrower, depending on the arrangement and may also charge a fee, the amount of the fee may vary depending on the size and complexity of the cases