While you don’t always need one, lenders usually want you to seek advice first to check that a mortgage is suitable.
If you choose a mortgage without advice, it is called an “execution only” application.
You can search for a range of mortgage deals yourself but you may not end up with the best deal for you. This is especially true if you have an income that is trickier to explain, such as being self-employed or you are a first time buyer.
Here are the main advantages to using an adviser:
- A good adviser will know the market, potentially making for a smoother process
- You might have less hassle finding the right mortgage than if you had done it on your own
- It saves you time as the adviser will know which lender is likely to be most suitable
- Could potentially save you thousands of pounds if the adviser choosing a good, cheap deal
- They can help you understand the difference between certain deals and interest rates and the consequences of opting for one mortgage over another
Mortgage advisers should be able to tell whether you will meet a lender’s criteria so that your mortgage application won’t be rejected.
Rejected applications can prove costly, particularly if you have paid a some legal and valuation fees beforehand. Rejections can cause delays in you buying a house, so it could even mean you end up missing out on the property you really want.
Some brokers even have access to exclusive deals only available through their business, so you might get more choice than you would if you decide to go it alone. In the same vein, there are mortgages that banks will only offer directly to the borrower.
Things can also change rapidly in the mortgage market. An adviser will have a handle on what’s going on so that you find a cheaper suitable mortgage.
When you first talk to an adviser, be clear about your situation and how far along the house-buying mortgage application process you are (if at all).
For example, it might be early days and you just want to find out how much you might be able to borrow. Or you might have had an offer accepted on a house and want to get the ball rolling quickly.
You should be prepared to tell them the value of the property you expect to buy and the size of your house deposit.
Before you visit a broker, come armed with lots of questions, such as:
- How many products they have access to
- How much they charge for mortgage advice
- If you can speak to someone in person (some brokers complete the entire mortgage process online)
How much will having a Mortgage broker cost me?
Whether an adviser is really worth it will ultimately depend on the cost and what service they are providing.
Their fees will differ:
- Some brokers are free for you but will earn commission paid by the mortgage lenders
- While some brokers earn commission from lenders they might also charge their clients a fee or interest rate on top. Those brokers that do charge could set you back around £500
There are also a small number of mortgage advisers who only earn a salary from their employer rather than earning commission or client fees.
