- 29th March 2020
- Posted by: Mark
- Category: advice
A mortgage broker (or advisor) is there to help you navigate the process of securing and applying for a mortgage.
The role of a broker is to essentially pair you with a lender who offers the type of mortgage you are looking for at a rate you are happy with.
While the job of a broker is the same, there are differences. Some mortgage brokers are tied to one lender. This means they can only offer you mortgage products from one or a limited number of lenders. Independent brokers have no ties to any particular lender and will carry out a wider search (often referred to as a whole of market search). This has the benefit of being able to offer you more mortgage deals which suit your criteria.
So what are the primary roles of a mortgage broker which benefit you ?
Assessing Your Financial situation
A mortgage broker has a responsibility to ensure you can comfortably afford to repay the mortgage. There is no benefit you or the lender if you are overstretched and end up defaulting on the mortgage, no one wins in that situation.
Here are some mortgage budget planning information you may be required to supply
- Monthly Income – this will include your (and secondary applicant if applicable) net income and any additional income
- Monthly expenditure – this includes utilities, housekeeping, council tax, credit cards, pensions, regular outgoings
- Spare income – simplified your monthly expenditure is deducted from your monthly income to provide this figure.
Recommend a Particular type of Mortgage For Your Needs
You may have a specific type of mortgage in mind but your mortgage broker will recommend a different type of mortgage. This may be done when your broker has assessed your financial circumstances and your credit score.
Your broker has an obligation to work in your best interests based on the financial information you have provided. When applying for a mortgage this information must be verified by payslips and bank statements.
Carry Out a Search For a Suitable Mortgage Product
Although you can search for a mortgage yourself, it’s unlikely you would ever find all the lenders a “whole of market” search produces. Most people initially approach their bank, why not, it’s the easiest way to get a mortgage. That said it’s often not the source of the best deals not mention banks can be fussy if you don’t have perfect credit or are self employed.
Very often your broker can find mortgage deals not on the high street but with high street banks. For the self employed or those will less than perfect credit, a broker is almost a must. Brokers have access to lenders who can offer someone a mortgage even though their credit is far from perfect. Of course the lender will ask more questions and will want to see you are on top of any debts. Some lenders understand people have financial problems but recover from them. Banks are less likely to take this approach.
So you can see what a mortgage broker does and how it can benefit you. Most brokers charge a fee, the amount depends on several factors. The fee will always be disclosed before you commit to any mortgage. Put simply a mortgage broker is on your side, it more down to whether you want to pay for the benefits a broker can bring to the table.