When you’re looking at buying your first home, or moving up the property ladder - deciding on how to finance the move isn’t should be taken lightly. You want to make sure you’re getting the best deal, and there are lots of options available. However, there is one choice you need to make earlier on: Go it alone, or get the advice of a mortgage broker.
Using a mortgage broker
View a mortgage broker as your personal guide to the mortgage market. They are regulated (by the FCA - Financial Conduct Authority), and have to pass strict exams to enable them to give mortgage advice. When discussing your options with a broker, they’ll take your financial circumstances in to consideration, along side your property aspirations and recommend the very best deal for you.
An experienced broker will be very familiar with the different criteria of each lender, so by following their advice you’re most likely to be accepted for a mortgage. They may also have access to exclusive broker-only deals that members of the public aren’t able to find.
Most mortgage brokers make their money in two ways: firstly from the lender and secondly from the client in the form of a mortgage arrangement fee. Both sets of fees will be laid out to you at the outset so you’ll know exactly what it’s going to cost you. One thing to bare in mind is weighting up an up front cost in comparison to the save you make due to the deal the broker has arranged. However, not all brokers will charge an arrangement fee!
TOP TIP! Choose a ‘whole of market’ broker, they are not restricted on which lenders they can use. Some brokers choose from a select panel only.
Finding your own mortgage
Finding your own mortgage will be dependant on your house-buying experience, knowledge of the market, and your confidence. If you're a seasoned buyer and you have the time to put in the legwork, the do-it-yourself approach could be for you, but for the most of us, it’s the hard way of doing things. However, it’s never been easier to scope the market, with a whole host of comparison tools available online. Whatever you choose to do, it’s best do do some research so you’re able to build a picture of what is available to you.
Due mainly to the FCA's Mortgage Market Review in 2014, going it alone today is a bit tougher than it used to be. Banks and building societies have to be much more rigorous about who they lend to, so don't be surprised to see things like childcare, commuting costs and pension contributions crop up in a mortgage application interview - they need to be very thorough.
Another thing to bare in mind is that your bank is now obliged to provide you with an appointment before they can sell you a mortgage. This means that when shopping around, you might sometimes face long waits for an appointment, which should be kept in mind if your transaction is time-sensitive. If time is sensitive aspect of your move, speaking with a mortgage broker is probably going to be your best bet.
If you want to speak to one of our recommended brokers, please call our office on 0116 456 0131.