How to use a mortgage broker to shop for a mortgage
A minority of people can occasionally be sceptical about using any kind of broker, such as a mortgage broker or insurance broker. They think that they can do the research themselves and make the best decision themselves.
Is this really the case? In this article we are going to take an objective look at the benefits of using a mortgage broker and what kind of added value they provide.
The small number of people who may not want to work with a mortgage broker usually say that the fee charged by brokers is the thing that puts them off. However, it is important to realise that mortgage brokers are required to be completely transparent about their fees and how transactions are charged. As well, the fee covers the advice that you receive.
It's a requirement that a mortgage broker will give you a Key Facts document which details all their services and any fees they may charge. They will also issue a Key Facts Illustration which covers all aspects of any mortgage being recommended.
The advice you receive from a broker will not be general or generic. It will be specific for your situation and requirements and therefore tailored to you. This advice is the service you are receiving. In order to research and give you the best possible advice and recommendations, a broker charges a fee. This is in the form of either a one-off fee or commission. With the latter, lenders may to pay the mortgage broker commission for recommending their product. But remember, the recommendation is because, according to the broker’s experience and knowledge, the financial product is the best one for you.
Now, let's move on to the benefits of using a mortgage broker when you are looking for a mortgage. First of all, getting a mortgage in the U.K is not as easy as it used to be. The financial crisis in 2008 led to a tightening of lending, and the recent Mortgage Market Review means that the whole area of lender affordability will be under greater scrutiny. Furthermore, mortgages are complex products that are detailed and require a depth of understanding. From this point of view, getting advice from an experienced and knowledgeable person who makes it their business to understand the industry makes good sense.
A mortgage broker is looking out for your interests and is on your side. He is there to ensure that you get not just any mortgage, but the best one for you and your circumstances. He is there for you and is on your side, not on the side of the lenders.
As we mentioned earlier, mortgage lending has tightened up considerably in the past few years. But a mortgage broker deals with these products on an hourly basis every day. He or she has up-to-the minute knowledge and know when new products arrive on the market. They deal with banks and building societies every day. They understand the review process and will make sure you are prepared so that your approval is not delayed. They also know how individual lenders assess mortgage applicants and will be aware of the fact that one lender might approve your mortgage while another won’t. This is the ad vice and experience you need on your side. Finally, a broker may have given a particular lender a lot of business, and may be able to influence the lender in a way that the individual consumer cannot.
Finally, no one can just set up as a mortgage broker. A mortgage broker must qualify to do the work and also obtain a license. These individuals are specially trained to do their work and understand how to work on a one-to-one basis with people. Because of this, they have a duty of care to you and must always be able to explain why they are recommending a certain financial product.
Kirk at UKFCS is a very professional and competent broker, he is very trustworthy and we have worked closely for many years helping lots of clients in the process. Highly recommended.By Chris Warner in Harlow, Essex
UKFCS provide a fantastic service. The advice I was given was thorough and jargon free. Everything was done efficiently and they saved me money. I will definitely be recommending them to friends and family.By Sheetal Patel from West London
Authorised and Regulated by the Financial Conduct Authority.UK Financial Consultancy Services Ltd, Registered in England and Wales No.5467810
Registered Office: 33 Darnley Road, Gravesend, Kent, DA11 0SD Your home may be repossessed if you do not keep up repayments on a mortgage or any other debts secured on it.
The overall cost for comparison is 4.4% however the actual rate will depend on your circumstances.
UK Financial Consultancy Services Ltd operate as an intermediary and are not a principal lender
Our FCA registered number is 435495 and can be found on the regulators website at www.fca.org.uk/register