The advantage of using a mortgage broker when buying a house
They have access to a wide range of deals and huge industry knowledge when it comes to lenders, interest rates, costs to arrange versus ongoing costs to service, but you have to ask yourself if they have a vested interest in the deal they are trying to push. Currently, the Government has set aside millions of pounds for mortgage mis-selling claims which should be a good indication of the number of deals that have been struck that were perhaps not in the best interests of the borrower.
It’s a bit like the England football team – you’ve only one chance to strike a goal and score the deal you want. You are going to have to live with the results – good or bad – for years to come. So don’t be like poor old Wayne Rooney, make sure you score a Hit not a Miss when it comes to getting the best deal for you!
The fact remains that most people need a mortgage and a broker can be an excellent place to start. By using a mortgage broker when buying this will have many advantages for you plus you don’t have to take their advice after all but bear in mind that hopping around and asking different lenders for an “Agreement in Principle” to give you a mortgage a) does not constitute a binding offer and b) can leave an adverse score on your credit rating, thus further affecting your chances of securing a mortgage adversely.
So, what do you need to watch out for? The primary concern you should have is: “What is the overall value over the deal period?”
Lower rates can look good on the surface but can carry hefty arrangement fees whereas other deals may carry a smaller fee – or no fee – and may also offer help with other costs such as valuation fees or even offer you some kind of cashback deal – money that can usefully be put towards other costs of moving.
- Avoid brokers who offer a restricted service based on products from a limited number of lenders. Mortgage advisers based in banks will only tell you about their products (of course!) so be aware of the difference.
- Always double check with your mortgage broker whether you are being offered information-only or advice. This is because by providing advice they have a responsibility to find you the best deal.
- They can help you look beyond the interest rate and properly compare the overall cost of the mortgage.
- They may have exclusive access to deals including lender-direct deals.
- They will only recommend a mortgage that is suitable and affordable for you. This could also help speed up the process because you’re less likely to waste time on applications; a broker may also help with completing the paperwork for you.
- If you buy based on a broker’s advice you have more rights if the mortgage turns out to be unsuitable for you and eligible to put in a hefty claim for compensation through the mortgage mis-selling scheme.
- Find a specialist broker if you have a poor credit rating or need a specialist mortgage, such as buy-to-let.
- Check your broker’s credentials.
- Brokers who offer mortgage advice are regulated by the Financial Conduct Authority.
- All mortgage brokers should be listed on the FCA register – if a broker doesn’t appear there then they are not authorised to provide mortgage advice.
- Ask your broker to explain how they get remunerated and if they can tell you about all offers, even from lenders who don’t pay them a commission.
Ask a specialist who knows the market such as Zevizo Properties, what we think of house prices, mortgages, deposits and fees, while we are not authorised to give financial advice, the sheer range of specialists that we are connected to, means we are well placed to be able to point you in the right direction and when it comes to selecting properties, we can certainly analyse your requirements and find you the property best suited to you, from there you can work out the amount of mortgage loan to apply for and start from there!