With online mortgage applications and banks at our fingertips, do you really need a mortgage broker in the middle? Here’s what a broker actually does and when having one can make a real difference.
You’ve found a house you love. You have a bank account. You can search mortgage rates online and, in many cases, apply for a mortgage without leaving the sofa.
So, do you really need a mortgage broker?
It’s a fair question.
The simple answer is no, you don’t have to use one. You can absolutely approach a lender directly and arrange your own mortgage.
But there’s a little more to it than that.
What does a mortgage broker actually do?
A mortgage broker acts as the link between you and potential mortgage lenders.
But their job isn’t simply to find a mortgage rate and submit an application.
A good mortgage advisor will take the time to understand your circumstances, what you’re hoping to achieve and what your future plans look like before recommending a suitable mortgage.
They’ll consider things like your income, deposit, monthly commitments, credit history and the type of property you’re buying.
And this is where having someone in the middle can start to make sense.
Your bank only has one answer
The important thing to remember is that your bank can only offer you its own mortgage products.
Different lenders have different affordability calculations, lending criteria and ways of assessing income. That means the amount one lender is prepared to offer you can be very different from another.
A mortgage broker can compare suitable options from different lenders rather than assuming the bank you already use will be the right one for your mortgage too.
It’s not always about finding the lowest rate
Understandably, one of the first things most buyers look at is the interest rate.
But the lowest rate doesn’t automatically mean the most suitable mortgage.
There can also be arrangement fees, valuation fees, cashback and other incentives to consider, as well as the overall cost of the mortgage.
More importantly, you actually need to meet the lender’s criteria.
A fantastic-looking mortgage isn’t much use if the lender won’t accept your income, property or circumstances.
Mortgage criteria can make a big difference
This is one of the areas where using a mortgage broker can be particularly valuable.
Lenders don’t all look at borrowers in the same way.
You might be:
- Self-employed
- Earning overtime, bonuses or commission
- Buying a new build
- Using a gifted deposit
- Returning to work after parental leave
- Planning to borrow into retirement
- Buying with an adverse credit history
- Purchasing a more unusual property
One lender might be comfortable with your circumstances while another isn’t.
Knowing where to look can save a lot of time and potentially avoid unnecessary applications.
A mortgage broker does more than submit the application
Getting your application submitted is only one part of the process.
Afterwards, the lender may request further documents, ask questions about your circumstances or need additional information about the property.
There’s also the mortgage valuation, underwriting and mortgage offer to navigate.
Your advisor can deal with the lender, explain what’s happening and keep things moving while keeping you updated along the way.
That’s particularly valuable when you’re also dealing with estate agents, solicitors, developers, removal companies and everything else that comes with buying a home.
What if mortgage rates change after you’ve applied?
Receiving your mortgage offer doesn’t necessarily mean you should stop paying attention to the market.
Mortgage rates can change between application and completion.
At Mortgage Select, we continue to monitor available rates for our clients while their purchase progresses. If a more suitable rate becomes available before completion, we’ll look at whether there’s an opportunity to switch.
It’s one of the reasons the relationship with your mortgage broker doesn’t have to end when the application is submitted.
When should I speak to a mortgage broker?
Ideally, before you’ve found the property you want to buy.
Speaking to an advisor early can help you understand how much you may be able to borrow, what your monthly repayments could look like and whether there are any potential issues you need to consider.
You may also be able to arrange a Mortgage Agreement in Principle, giving you a clearer idea of your position before you start making offers.
So, is a mortgage broker really a necessary middle man?
When you’re making one of the biggest financial commitments of your life, having someone in the middle who understands lender criteria, knows the mortgage process and is there to help when things don’t quite go to plan can be pretty useful.
A mortgage broker isn’t there to make the process more complicated.
They’re there to make a complicated process simpler.
If you’re thinking about buying, moving or remortgaging and aren’t sure where to start, speak to our team. An initial conversation costs nothing, and we’ll be happy to talk through your options.
