Faced with the prospect of taking out a mortgage most people immediately think in terms of a bank or building society.
Traditionally these are the institutions to which one would turn for help in one of the most important – and expensive – transactions of life. However, these days applying for a mortgage with either a bank or building society may not necessarily be the best option. There are other ways of arranging a deal on your mortgage.
This is where the online mortgage broker comes in. Here you will find someone who has been trained specifically to help you find the best mortgage deal for your particular situation. There are three different kinds of mortgage brokers, all regulated by the Financial Services Authority. They are tied mortgage brokers, who offer mortgages available from a single lender; multi-tied mortgage brokers, who offer access to products from a panel of lenders; and whole-of-market brokers, who provide access to all the mortgage products available to brokers.
If a mortgage adviser claims to be ‘independent’ you should be offered access to the whole of market mortgage deals.
Do you have to pay for a mortgage broker? In some cases, yes. Otherwise a mortgage broker could be on commission, on which event they are compensated directly by lenders when they arrange a mortgage, so there will be no additional cost for you. Some mortgage brokers will charge a fee for their services and take commission from a lender. They may offer to offset some of the commission earned against the cost of your deal.
So what, you might ask, are the advantages of dealing with a mortgage broker rather than with a bank or building society? First of all, the wide range of mortgage products on offer. A broker has the experience, the connections – and the technology – to assess your financial situation, compare the different deals, and therefore work out a loan option that is tailor-made for you.
Also, at a time when mortgage deals are not easy to come by, a mortgage broker will provide you with the opportunity to apply for the best of them as soon as they are available. In addition, there are many lenders, especially those who offer specialised mortgage products, who operate exclusively through brokers, and can therefore offer deals that would not otherwise be available.
If you are unfamiliar with the different types of mortgage -you are a first-time buyer, for example – then mortgage brokers can be a godsend. They will explain the complete range of deals available to you in a way that you can understand, and advise you as to which of them is best for you. Your mortgage broker will also be able to suggest which lenders he thinks will be most likely to approve your application.
Another big advantage of using a mortgage broker is that you will save a lot of valuable time and effort by reducing the amount of research you have to do and the number of applications you have to fill in. All you have to do is provide the usual once-and-for-all information to your mortgage broker online and that will be used to find a suitable deal and submit an application. Simple.