Do Mortgage Brokers Get Better Deals?

Do motgage brokers get better deals?

This page was last updated in July 2022. 

Do Mortgage Brokers Get Better Deals in 2022

When you begin to look for a mortgage, the options can seem overwhelming. There are hundreds of different products available, and it can be hard to know where to start. One of the main questions people ask is ‘should I use a mortgage broker?’

A mortgage broker is a professional who will search the market for the best mortgage deal for you.

The question is, do they really get you a better deal? The answer is that it depends.

In some cases, mortgage brokers may be able to get you a deal better than you might get if you were to go directly to a lender. They also have a lot of experience in the industry and know which lenders are likely to offer you the best deal. 

But it’s not always black and white – there are a few things you need to consider before making your decision.

What is a mortgage broker, and do I need a mortgage broker?

A mortgage broker is an intermediary usually registered with the Financial Conduct Authority who brings together borrowers and lenders from across the mortgage market and works with both to find the best mortgage products for their customers. 

Brokers have access to a wide variety of lenders and products, and can often get better broker only deals than if you go for direct deals from a bank mortgage advisor at your bank or building society.

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What are the different types of broker?

Fee free broker

A fee free mortgage broker is one who does not charge you a fee for their services. These are becoming increasingly common as people become more aware of the fees charged by some.

Some fee free agents may still receive commissions from lenders, so it’s important to ask about this before you agree to use their services.

Local brokers

Local brokers are usually based in high street branches of national firms, or they may be independent businesses.

Using a local agent has the advantage of being able to meet face-to-face to discuss your mortgage options. This might be helpful if you’re not sure what you’re looking for and need some guidance.

Online brokers

There are also a number of online brokers who can offer you broker only deals from a range of mortgage lenders.

Applying for a mortgage through an online agent can be quick and easy, and additionally, it can give you access to a wide range of deals.

Specialist broker

A specialist mortgage broker is one who focuses on a particular type of mortgage, such as buy-to-let or self-employed mortgages.

These agents may have access to broker only deals that are not available through other types of agent, so if you’re looking for a buy to let mortgage, it could be worth exploring this option.

Market broker

Market brokers work for one particular lender. These agents can only offer you deals from their own lender, so they are not able to give you impartial advice.

What Does a Mortgage Broker Do?

They work with a variety of lenders to find loans for their clients. They may also offer other financial services, such as insurance and advice on credit products. Most brokers are paid a commission, but they may also charge fees for their services.

Are all mortgage brokers the same?

In short, no. There are different types, and the type you use will depend on your needs. Independent brokers work with a variety of lenders and can offer impartial mortgage advice. 

They may be able to get you a more preferable mortgage or remortgage deal than if you go directly to a lender, but they will charge fees for their services.

Tied mortgage agents work exclusively with one lender. They may not be able to find you a superior deal than if you went directly to the lender, but they can offer other benefits, such as specialist knowledge or access to exclusive products. Tied agents are usually paid a salary, so they don’t charge fees.

What are the pros of mortgage brokers?

Even in the case that a mortgage broker cannot find you a superior deal, there are some advantages to using one to find your mortgage deal.

Professional mortgage advice on multiple options

If you use a mortgage broker, they will have relationships with many different lenders, giving them the ability to shop around in order to find a good deal on your behalf depending on your specific needs, deposit capability and loan to value.

Save Time

Using a competent mortgage broker may save you time by taking care of the legwork for you. They will gather all of the necessary paperwork and contact lenders on your behalf.

difference between mortgage advisor and broker

Expertise

Brokers understand the industry and can provide assistance and guidance throughout the procedure. They may also assist you in being well-prepared for your loan application by assisting you in being fully ready and directing you toward mortgages that you will most likely be accepted for.

For example, someone who understands which lenders are most flexible can assist you if your mortgage application has difficulties.

In the case that you have had a bad credit report, bad credit scores, or you have a limited credit history, a competent broker may be more useful. 

A competent agent would know which lenders are more tolerant of a bad credit report and are more likely to give you loan approval. 

So, if you would not qualify for a home loan from a typical financial institution in another scenario due to your financial status, an agent can find a way around it.

"A mortgage broker is a professional who will search the market for the best mortgage deal for you."

Application Screening

If you choose to utilise a mortgage broker, they can examine your application and compare it to lender criteria in order to determine if you’re likely to get accepted before you even submit your loan application.

If you know that you wouldn’t be suitable for a certain mortgage loan, using a mortgage agent might save you time and effort while filling out the application process.

Low Interest Rates

Brokers can access a wide range of lenders, allowing them to compare rates and get you the best possible deal. They may also have access to exclusive deals on fixed rate or buy to let mortgages.

do i need a mortgage broker

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What are the cons of mortgage brokers?

On the other hand, despite being potentially able to secure you a better deal and help you to save money, there are some serious disadvantages to consider too.

1 – The application process may take longer

If you use a mortgage agent, the application process may take longer as you’ll need to provide them with information on all of your financial and personal circumstances.

2 – Conflicts of interest

While some may check the whole market to find you the best product, if you hire a mortgage broker who isn’t adequately regulated, there’s a chance he or she will be biased. They might be tempted to suggest you to a certain lender in order to earn more money.

3 – You may owe a broker fee

Some brokers will charge you a fee for their services. These fees can be hidden in the form of higher interest rates or can be upfront costs. It’s important to ask your broker if they charge any fees before you agree to use their services.

There are a wide variety of ways that they can be paid:

Hourly Rate

You may be charged an hourly rate for the time spent working on your loan application. This will not be based on the loan size.

Commission

Pay often works through commission when they successfully find you a loan. The size of the commission can vary depending on the loan size and is typically between 0.5% and 2.0% of the loan amount.

Upfront Fee

You may be asked to pay an upfront fee to cover the costs of the broker’s services, such as appraisal fees or application fees.

Lender-Paid Compensation

Some lenders will offer to pay the broker’s fee in order to win your business. This compensation is typically built into the rate of the loan, which means you’ll end up paying more in interest over the full period of the loan.

mortgage advisor vs broker

They often do not guarantee estimates

When you’re shopping around for a mortgage deal, it’s important to get estimates from multiple lenders so that you can compare rates and fees for different mortgages. Agents can provide you with rate quotes from multiple lenders, but they often do not guarantee those rates.

They may not have access to all lenders

Though they may be able to get you an exclusive deal in some cases, there are some agents who only deal with one specific lender. If you choose a broker that has restricted access to lenders, you may not obtain the greatest possible price as a result of this.

It’s important to shop around and compare rates from multiple lenders, whether you use a broker or not.

What are some common misconceptions about engaging a mortgage broker?

One common misconception is that brokers are only used by people with bad credit. While it’s true that they can help people with bad credit get loans, they can also help people with good credit get loans too.

Many people believe that hiring a mortgage broker will always end in you spending more money. This isn’t always the case; while some charge fees, others don’t. Even if a broker charges costs, they may be able to get you a greater rate than you would have been able to obtain on your own.

What should I look for in a broker?

It’s important that you find the right mortgage broker for you. When you’re looking for a qualified mortgage broker, there are a few things you should keep in mind. First, make sure the broker is registered with the Financial Conduct Authority (FCA).

Second, check to see if the broker belongs to any professional organizations.

But remember, this does not officially constitute financial advice, and it’s worth consulting mortgage advisers or independent financial advisers registered with the financial services register to ensure you are going for the right financial product.

should i use a mortgage broker

How do I find a mortgage broker?

There are a few different ways to find a mortgage broker. You can do your own research online, in the yellow pages, or in your local newspaper. You can also ask around for recommendations from friends, family, or colleagues who have used a broker before.

Once you’ve discovered a few loan brokers you’d like to deal with, it’s critical to compare their rates and costs to other brokers. Finally, double-check that you understand all of the terms and conditions of the loan before signing anything.

What are my other options if I decide not to go through a broker?

If you don’t want to use a mortgage broker, you have a few more options. You may connect with a direct lender, such as a bank or credit union, or you can go through an online mortgage lender. 

Direct lenders will typically give you a higher interest rate than what you would get through a broker because they don’t have to share the commission with anyone. Online mortgage lenders may be able to give you a lower interest rate because they have lower overhead costs.

When looking for a mortgage, it’s critical to compare rates and mortgage broker fees from multiple lenders to ensure you’re getting the right mortgage deal and to consult a mortgage adviser if necessary.

So can a mortgage broker always find the best deals?

Mortgage brokers have access to a wide range of lenders and products, but they may not always be able to access exclusive mortgage deals. It’s important to remember that they are often paid a commission, so they may be biased towards products that pay higher commissions.

It’s also worth shopping around and getting quotes from a few different mortgage brokers to compare deals before making your decision. This will help you make sure you’re getting the best possible deal.

bank mortgage advisor

The best way to ensure your mortgage broker is getting you the best deal is to compare their offer with deals from other mortgage brokers and direct lenders. This will help you make sure you’re getting the best interest rate and terms possible.

You should also ask about any mortgage broker fees they’re charging, as well as how they’re being paid (e.g., commission, salary, etc.). It’s important to make sure you fully understand all of the costs involved in taking out a loan before making a decision.

Finally, it’s worth noting that using a mortgage broker might not be right for you, no matter whether they can find the best deal. Extra upfront fees are balanced by expert advice, but it may not end up being the most cost-effective option if you have your own expertise or can consult trusted mortgage advisors in place of a broker.

Remember that no matter how you go about taking out a mortgage, you do so at your own risk and must accept liability for the loan: it is worth discussing your financial situation with a financial advisor to make sure you are getting the right advice or getting a mortgage illustration document from a mortgage adviser.

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Learn More About Mortgages In The UK

How do mortgages work in the UK?

Buying a home or land is expensive. A mortgage is a financial product that helps people purchase their own home or land.This is especially true for a first time buyer, as it might be the only route onto the property ladder.

The minimum credit score for a mortgage

ou can still be approved for a mortgage to buy a property if you have a poor credit score. However, someone with a poor credit score will probably have a higher interest rate than someone whose credit score is good. Buyers with a low credit score may also need to pay a bigger deposit.

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A fixed term contract is a way of describing certain types of employment. If your current employment contract is due to end after a certain period of time, or after a specific piece of work is complete, you are likely on a fixed term contract. 

how long does a mortgage application take?

After sending off the final application waiting for the decision can be frustrating. Many prospective homeowners ask ‘how long does it take?’ but the truth is the mortgage approval process is always different for each customer.

how long does conveyancing take?

The entire conveyancing process will normally take anywhere between 8-12 weeks, however you should be prepared for this to take much longer depending on your circumstances and wider factors. This articles explores what the timescale involves.

Mortgages if You are bankrupt

There is no hard and fast rule when it comes to what lenders will accept your mortgage application if you want to get a mortgage after bankruptcy. They will lend to discharged bankrupts and consider each case individually. 

what stops you getting a mortgage?

Everyone wants to get the best deal when it comes to buying a home and getting a mortgage when they buy a home. However, being too ambitious can lead to your application being rejected. 

how much do mortgage advisors charge?

Fees for mortgage brokers can be off-putting. A mortgage is an expensive financial product, and often buyers want to save as much money as possible. This might limit their options when it comes to using a mortgage broker.  However, not everyone advisor charges a fee.

IVA Mortgage

When you have an IVA, mortgage acceptance is still possible. However, involuntary agreement mortgage lenders can be hard to find. Typically, a high street company will be more less keen to give you a mortgage. 

Article author

Katy Davies

I am a keen reader and writer and have been helping to write and produce the legal content for the site since the launch.   I studied for a law degree at Manchester University and I use that theoretical experience, as well as my practical experience as a solicitor, to help produce legal content which I hope you find helpful.

Outside of work, I love the snow and am a keen snowboarder.  Most winters you will see me trying to get away for long weekends to the slopes in Switzerland or France.

Email – katy@helpandadvice.co.uk

Frequently Asked Questions

What Does a Mortgage Broker Do?

They work with a variety of lenders to find loans for their clients. They may also offer other financial services, such as insurance and advice on credit products. Most brokers are paid a commission, but they may also charge fees for their services.

How do I find a mortgage broker?

There are a few different ways to find a mortgage broker. You can do your own research online, in the yellow pages, or in your local newspaper. You can also ask around for recommendations from friends, family, or colleagues who have used a broker before.

What are my other options if I decide not to go through a broker?

If you don’t want to use a mortgage broker, you have a few more options. You may connect with a direct lender, such as a bank or credit union, or you can go through an online mortgage lender. 

Are all mortgage brokers the same?

In short, no. There are different types, and the type you use will depend on your needs. Independent brokers work with a variety of lenders and can offer impartial mortgage advice. 

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