BLOG: Top 7 Reasons to Use a Mortgage Broker

When you are buying a property and require a mortgage to make the purchase, there are a number of advantages of using a mortgage broker.

Not everybody uses a broker, as you may choose to go directly to a lender to arrange your mortgage.

However, by doing this you could miss out on numerous benefits and end up paying more for your mortgage.

Mortgage brokers are experts in their field, so it makes sense to use their experience and knowledge of the mortgage market, especially if you do not have a good understanding of how mortgages work.

These are the top 7 reasons to use a mortgage broker:

Reason 1 - A broker can save you money in the long run

Over 78% of first-time buyers rely on mortgage brokers and it stands to reason, as whole-of-market mortgage brokers will be able to find the most suitable product for your needs.

This means the broker can find the most cost-effective mortgage deals that will save you money over the long-term.

The alternative option would be to find a high street lender yourself, which will not give you many mortgage deal options. A broker will usually have access to exclusive products that are not available from high street lenders.

A common misconception about using a broker is that it will cost you more money because you have to pay a broker fee.

This is generally incorrect, as not all mortgage brokers charge fees.

A broker who does not charge the client a fee is not a lower quality broker, they are simply happy with the procuration fee paid by the lender instead. All brokers receive a procuration fee from the lender but some choose to charge the client as well.

Reason 2 - A broker can advise on every aspect of the mortgage process

The details and terms of mortgage deals can get complicated, so a mortgage broker can make the process a lot smoother.

Whenever you have a question about an aspect of the mortgage process, you can contact them and they will be able to explain what everything means, breaking down the jargon for you.

A broker will be able to advise you on which products are most suitable for your specific financial circumstances. Whereas, a high street lender will recommend their own products even if there are more suitable products available elsewhere.

An independent broker will find the deal that is best for you as they are impartial, with no incentive to recommend one lender or another.

This helps to ensure that you take out a mortgage that is tailored to your needs and not costing you excessive interest or charges that could be avoided.

Reason 3 - A broker can save you time

Mortgage brokers can help you to quickly identify the best deal for your requirements, so you will not have to spend time doing research on a range of different lenders yourself.

As well as saving you time this way, a broker can help to quicken the mortgage application process.

As they have in-depth knowledge of what requirements each mortgage lender has, they can advise you of all the documents that you will need to prepare, such as proof of income, bank statements etc.

A broker will often take care of some of the administration tasks on your behalf, again saving considerable time in the process.

If you are hoping to get the mortgage application processed quickly so that you do not miss out on a house purchase, a broker gives you a better chance of a fast application.

Another way that a broker will save you time is through being able to quickly find lenders who will approve your mortgage application based on your specific financial situation.

If you apply directly with a lender who then declines your application, this would cost you weeks of wasted time. You would then need to apply with another lender from scratch.

This would take even longer for you to obtain a mortgage, in which time you might lose out on a property you are interested in, as well as it having a negative impact on your credit report.

Reason 4 - A broker has a far wider market reach

Whole-of-market brokers work with every single lender on the market, which enables them to analyse every option to find the deal that is best for your situation.

For example, if you have a certain amount of deposit, a broker will find the best deal for your LTV (loan-to-value), which will give you the best interest rates.

They will factor in every detail of your finances, such as income, existing debt, house price etc. to identify the best deal based on all the key details that the chosen lender uses in their calculations.

If you have any adverse credit history, a broker will be able to select lenders who specialise in providing mortgages to people with poor credit, to find you the best deal for your circumstances.

Reason 5 - Brokers are fully regulated and qualified

Brokers must have professional qualifications and they are regulated by the Financial Conduct Authority – either directly or as an appointed representative of a network.

This means that the broker has a regulatory responsibility to search for the most suitable product for your needs.

If there is an element of your broker’s service that you are not happy with, you have the option of complaining to the Financial Ombudsman Service.

If you are recommended a product that is not suitable for your needs, you may be able to claim compensation for any financial loss you have suffered as a result of their poor advice.

Reason 6 - Brokers can find you lenders to suit your specialised needs

Some people will find it more difficult to be approved for a standard mortgage and will require a specialist type of lender.

For example, someone with adverse credit will usually find that high street lenders will decline their application or will only offer deals with much higher interest rates.

A broker will be able to review your financial history and from their knowledge of lending criteria, have a good idea of which lenders are likely to decline your mortgage application.

This means that they can prevent you from having a declined mortgage application that would affect your credit record.

A whole-of-market broker can find specialist lenders who provide mortgages to people with adverse credit history, at the best interest rates available.

Self-employed workers can also struggle to have their mortgage approved, as they are not able to provide financial documents such as payslips as proof of income.

Self-employed workers may need to use a broker to find them a specialist lender who will accept alternative types of evidence for proof of income. A common issue for self-employed applicants is finding a lender that will accept their most recent year of income figures, rather than an average over the last 2 years. From their experience, brokers can quickly identify lenders that are happy to just consider the most recent year of income figures for self-employed applicants.

Reason 7 - A broker is able to offer reassurance throughout the house purchasing process

When you have a mortgage expert working on your mortgage application, there is less chance of a problem arising that could lead to your house purchase falling through.

If you have your heart set on a particular house and there is an issue with your mortgage application, this could potentially lead to you losing out on your dream home.

Your mortgage broker will be in regular communication with the lender to ensure that all of the required parts of the application are completed correctly and if there are any delays, they can be quickly resolved.

Buying a property can be a stressful process but a mortgage broker is there to help your purchase to go through smoothly, with minimum hassle.

Due to their experience of working with lots of different lenders, a broker will be able to recommend lenders that are easy to work with and who have delivered a good level of service to their previous clients.

A mortgage broker can provide a one-off service to arrange your mortgage but, in many cases, people use their broker on multiple occasions to find the best deals when it is time to remortgage.

Therefore, finding a good quality broker will not just benefit you for one instance, they will often save you time and money over the full term of your mortgage, which could be up to 30 years.

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