Should I use a mortgage broker?
Updated: Apr 5
Why Use a Mortgage Advisor When Buying a House
Buying a house in the UK, more often than not, involves taking out a mortgage with a building society or bank. With mortgage lenders all offering different deals with variable and fixed rates, it can be difficult to get your head around all of the offers. This is when a mortgage advisor can step in. Acting on your behalf, a mortgage broker will assess your individual circumstances and help you to understand which mortgage deal is best for you! So, if you’re feeling anxious or confused when it comes to taking out a mortgage, seek the help of a professional mortgage advisor before doing anything else.
What Does a Mortgage Advisor Do?
As a professional, a mortgage advisor, also known as a broker, has a vast knowledge of the UK property market and UK mortgage lenders. Acting in a similar way to a comparison website, that compares car insurance, a mortgage lender first takes time to understand your individual circumstances. This may involve asking you questions about your income, your outgoings, your financial commitments and your preferred deposit. Next, the mortgage advisor will analyse all the mortgage lenders who would currently offer you a mortgage. Then, they will filter through the deals and find you the best one! If you were to try to do this yourself, you might not fully understand each mortgage deal’s terms and conditions, Plus you may mistakenly think a bad offer is actually a good one, due to misleading marketing. So, it’s better to allow an expert to do all the hard work for you and benefit from their experience and knowledge of the UK property market.
Do I Pay a Mortgage Advisor?
As an expert providing a service, a mortgage advisor will take a commission or a finders fee. But, this fee is paid by the mortgage lender you choose to go with and not by you. The commission can often be between 0.3 and 0.4 per cent of the overall loan amount, making a mortgage advisor a decent amount. This means that you can seek professional advice without worrying about paying excessive fees. Now, some people may argue that a mortgage advisor will only recommend a product based on their commission rate which is a valid point. So, in order to find the best mortgage brokers, it’s always a good idea to speak to a number of them to see if they recommend the same, or similar mortgages to you. Remember to ask questions and don’t choose a mortgage product without fully understanding the terms and conditions first. For additional reassurance when seeking the best mortgage brokers, look out for reviews and customer feedback online.
Benefit From the Best Mortgage Brokers
Another benefit of using a UK mortgage advisor when investing in the UK property market is that mortgage brokers get preferential interest rates. When a mortgage advisor submits a high number of mortgage applications with one lender, they unlock better rates. These preferential interest rates means that mortgage advisors can often secure you a more competitive deal than if you were to go to a mortgage lender directly.
Here are some top questions to ask a mortgage advisor:
1. Can the interest rates be fixed? If so, for how many years?
2. What is the minimum deposit required?
3. Can the house be changed later into a rental property?
4. Are there any restrictions within the mortgage terms & conditions?
5. Are they offering any incentives or deals for first time buyers?
6. Is there an early repayment penalty?
7. What are the late payment penalties?
8. What happens if you can’t meet the monthly payments?
9. Does it allow for a mortgage break if you were to become unemployed for a period of time?
10. Are you a regulated mortgage advisor?
When seeking the professional help of a Cardiff mortgage advisor, bear in mind that they do work on a commission basis. However they rely heavily on positive feedback from happy clients too! Clearly explain what you need and always negotiate to get yourself the best mortgage deal.