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Choosing a mortgage broker

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Finding the right mortgage deal is not a quick or easy process. If you go direct to each lender it can take a long time and you won’t always get the best deals. By choosing a mortgage broker, you can research a much wider range of products in a short period of time. What services do brokers provide and how do you choose the right one for you?

What is a mortgage broker?

There are two different types of mortgage broker. Some offer a ‘whole of market’ service, which means they can tell you about any deals that are available, even those that are exclusive to brokers or where you need to deal directly with the lender. These brokers usually charge a fee for their services, but may also be paid commission from the lenders. Other brokers are tied to particular lenders and only recommend a restricted number of products. Their services are generally free and they’re paid through commission from lenders when you take up a product. This commission may have an influence on the products they recommend, so you should decide which option you prefer.

Why choose a mortgage broker?

No matter how much effort you put in to your mortgage search, you’ll never be able to research as many deals as a mortgage broker can. They have an in depth knowledge of the market and the products available from individual lenders. They might also have access to deals that aren’t available if you liaise with lenders directly, as they often provide brokers with preferential products. There are so many different deals available, with a range of fee structures, that it can be hard to get a true comparison of different products. A broker can take all the costs into account when comparing the features of different deals.

If you choose to contact a lender directly, their staff will only provide you with information on the products they have available and won’t advise you on what’s the best option for your circumstances. As long as your broker is regulated by the Financial Conduct Authority (FCA), they can provide you with advice on what deals are suited to your requirements. They won’t waste your time with products that are unsuitable or where you don’t meet the criteria. When you’re choosing a broker, you should check whether they provide an advice service or information only.

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Using a mortgage broker can help speed up the application and house buying process. Once you’ve selected a deal, they can liaise with the lender on your behalf, complete application forms and ensure everything is dealt with on time. They will also work with estate agents and solicitors to see that the whole process runs smoothly up until you complete on the property.

If you go to a lender directly and select the deal yourself, then you have no protection if anything goes wrong or the mortgage isn’t suitable for your circumstances. However, if you choose a mortgage broker who’s regulated by the Financial Services Authority (FSA), then you have a level of protection if you encounter problems later. Their job is to recommend products that meet your needs and if they don’t do this, then you’re entitled to complain to the regulator and may receive compensation.

How to choose a mortgage broker?

Before you decide on which mortgage broker to use, you need to see exactly what’s available. The best way of finding a good broker is through recommendations from friends and family. This will give you a good indication of the costs involved and the quality of service. There might also be a broker attached to the estate agent you’re using or they may have a local one they regularly use. The other alternative is to do an internet search of both local and national providers.

Once you have a few to choose from, contact them and ask:

–        Whether they provide a ‘whole of market’ service?

–        What fees they charge or if they receive commission?

–        Do they offer an online, face to face or phone service or a combination?

–        If they’re on the FCA register?

When you speak with a broker, you need to get a feel for their ability and whether they can provide a professional service. If you’re not confident they can offer this then you should look elsewhere. A mortgage is a long term commitment and you need to know that a broker is getting you a good deal that’s worth the c



About Jemma Porter

About Jemma Porter

Jemma Porter is an experienced content creator who has written for a number of online publications. A self-confessed penny pincher; she's often found seeking out the best personal finance deals.

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