A broker acts as an intermediary who connects someone who wants to buy a financial product, such as a mortgage, with an appropriate provider. Mortgage brokers are experts in their field and understand a lot more about the mortgage market than the average homebuyer, so getting their advice can be very beneficial.
There are many reasons that people choose to use a broker, whether they are first time buyers looking to get their first step on the property ladder or landlords with a property portfolio that they are looking to expand. Here are some of the key benefits of using a professional broker service:
To get access to the whole of the market
Mortgage applicants will only have access to the standard mortgage lenders, but most brokers have access to the whole of the market. This means that the applicants can use the deals and types of mortgage lenders that they would not usually be able to access or would struggle to find.
Most good, reputable brokers will have spent years working with a wide range of lenders and have a deep understanding of the different mortgage deals that are available. This enables applicants to get the best type of deal for their circumstances and the broker is able to work quickly to find the right deal for them.
The difference between one mortgage deal that seems like it is a good deal and another that a broker could find you with a slightly better interest rate could save you a significant amount of money over numerous years, so it is worth making sure that every available deal on the market is checked to see which one works out better.
Access to specialist lenders
For those mortgage applicants that have special circumstances such as adverse credit or are self-employed, for example, they are more likely to be able to find the relevant lenders by working with a broker. If an applicant has issues on their credit report, this could impact their ability to get a mortgage application accepted, as the lenders would categorize the applicant as a higher risk.
In these situations, some lenders will still offer a mortgage to the applicant but they will apply a much higher interest rate. This means that the applicant will be paying thousands of pounds more over the length of the mortgage term than if they were able to find a more favorable interest rate with the help of a broker.
In 2014 there was a Mortgage Market Review that resulted in lenders being required to be stricter with their affordability checks. Since this point, more evidence is required to prove income, for example, and it has become harder for some people to get mortgages for higher values. This also impacted people who were self-employed who were unable to provide six month’s payslips or similar evidence to show their income.
If these applicants with special circumstances were to just apply for mortgages with the standard lenders, then it is likely that their application would be declined. Having a declined mortgage application will further impact an applicant’s credit report, so it should be avoided wherever possible. A broker who understands their client’s financial situation will be able to identify the best lender on the market to be able to provide the applicant with a mortgage deal.
The mortgage market changes quickly, so it takes an expert in the mortgage field to understand what the best current deals are and who is providing them. The key role of the broker is to use all of the specific information related to the applicant and find a deal that is completely tailored around that. So, information such as credit history, income, outgoings, outstanding debts, amount of deposit and employment type are all factored into working out which is the most appropriate lender to give them the best deal.
Due to their strong understanding of the market, a broker can also help applicants to find a lender that matches their priorities. For example, if an applicant needs a house purchase to go through quickly, the broker will be able to advise on which lenders usually offer a speedy service. They can also ensure that the applicant has everything in place that the lender will ask for before they request it, which will further speed up the process.
Brokers must have relevant qualifications such as the CeMAP (Certificate in Mortgage Advice and Practice) which means they have undertaken the relevant training to enable them to provide people with mortgage advice. They are also regulated by the FCA and should be on the FCA register, which is easy to check.
If someone receives incorrect mortgage advice, they are protected and can raise a complaint to seek compensation, so this is another reason that people choose to work with a broker, for the added protection.
Some mortgage deals are only available to brokers, as the lender only operates through a broker. These can often be some of the specialist deals that applicants with certain circumstances can be accepted for when other lenders won’t take them on.
Brokers also access some exclusive deals that can save an applicant a lot of money over the course of the mortgage term. Many lenders will only offer exclusive rates to brokers and not directly to borrowers.
Working with a broker takes a lot of the hassle out of applying for a mortgage. Searching through the different types of mortgage deals and lenders can take up so much time and then there is the financial terminology and calculations that people often struggle to understand. A broker will be able to explain all of the details to applicants and there is less necessity for an applicant to understand it all in-depth, as the broker will advise the best deal based on their expert knowledge.
A broker knows the application process inside-out, so an applicant does not need to think about what they need to do or research what the process looks like. A broker will walk their clients through the whole end-to-end mortgage application, answering any questions where necessary and acting in the applicant’s best interests. So, the applicant won’t need to worry about when they need to instruct a solicitor, or what documents are required, because the broker usually takes care of that side of the work for them.
Using a broker provides mortgage applicants with so many benefits, from saving money over the course of their mortgage to speeding up and taking the complexity and hard work out of the application process. The expertise of a broker will help to identify the most appropriate lender for each specific client and find the best deals that are available on the market.
Talk to Boon Brokers today to see how we can help you to find the right mortgage deal for your circumstances.