Can a mortgage broker still help you find the best deal – or are you better off going direct to the lender?
In this article, we look at the pros and cons of going the intermediary route.
The case against brokers
Brokers have had a tough time over the last few years, and one of their biggest problems has been the fact that lenders have often reserve their very best rates for borrowers who go direct, not through the broker channel.
The internet also has a role to play in driving people to go direct.
The proliferation of online comparison sites has made it easier for potential borrowers to search the market. Indeed, you can use Lovemoney's mortgage tool to see which mortgage deals fit your circumstances.
You no longer need to spend an afternoon traipsing up and down the high street to pick up a stack of mortgage literature.
Now you can type in your precise needs and a clever mortgage tool will find the most relevant products for you.
Even better, you can see how much your monthly repayments would be and what the total cost, including fees, would be over a period of your choice.
Many borrowers feel that they simply don’t need a mortgage broker to help them sift through the market, now the internet does it for them.
But are they right?
The case for brokers
Firstly, to address the points above. Brokers may not be able to arrange direct-only mortgages for you, but they are free to tell you about them and, if they are the best deal for your specific needs, recommend you take one.
In other words, the fact that direct-only deals are some of the best on the market doesn’t necessarily mean you shouldn’t use a broker.
Secondly, while the internet does make it easier to compare deals, many comparison sites don’t compare all deals from all lenders, including those mortgages from broker-only lenders.
They also can’t give you a full explanation of the pros and cons of different deals, or take all of your circumstances into account.
This leads me onto the very real benefits of brokers:
Whole of market
A lender won’t tell you a competitor has a better deal. However, a mortgage broker scours the market to find the best deal for you from across the wide range of UK mortgage lenders.
Approved first time
One of the biggest frustrations for borrowers is applying for a mortgage only to be rejected by the lender, or be told that they will offer a lower sum than you need for the property of your dreams.
Lenders have very different lending criteria and a mortgage broker will be au fait with what all the major lenders will, and won’t, accept.
This can save you time, and can also mean the difference between your purchase going through or the chain falling apart because of unnecessary delays.
Doing the hard work
Dealing with a mortgage lender can be frustrating and time-consuming, particularly if you don’t have one point of contact.
A broker takes a lot of the hard work out of it, filling in forms, making phonecalls and chasing the lender to get the deal through to completion. You don’t need to worry about it.
Looking out for you
Brokers look after your needs, as they want to keep you as a client. It’s in their interests to do the best job possible for you, from finding you the best mortgage and insurance deals from across the market to getting the deal through quickly.
Crucially, they are with you for the long-term, so when they see a better deal come along in the future that would save you money, they will get in touch – something your mortgage lender is never ever going to do.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.
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