Can A Mortgage Broker Always Find The Best Deal?

By : Nick Marr

You have a dream of owning your own home. You’ve even gone ahead and set up a savings account ready for this journey. However, one thing holds you back. You don’t know where to start.

Mortgage brokers have been for a long time the link between borrowers and lenders. They have, on one hand, been of great help to both parties, but some have also been on the receiving end of criticism.

This article takes a look at the advantages and disadvantages of using a mortgage broker.

The Advantages

Saves You A lot of Work

Mortgage brokers have constant communication and relationships with many high street lenders and a lot more that you might not know of. In addition, a good mortgage broker has the technology at their fingertips to instantly access hundreds of different deals, allowing them to compare a vast array of the most suitable offers.

Brokers Work For You – Not the Lender

Remember when you choose to source a mortgage through a broker, they work for you, not the lender so its always in their best interest to get the best deal for you, their client. They know that if they do their job well, its highly likely that you will call them again if in the future you decide to move home or remortgage and will recommend their services to your friends and acquaintances.

Brokers Have More Access

There are many lenders that only provide their products through a broker. The reason for this is that they entrust the brokers to bring them clients who fit the customer profile they seek, thereby saving the headache of sifting through tons of applications. In addition, depending on the status of the broker you may be able to get better rates with brokers who have direct contact with lenders, or are part of a financial network, since they regularly get exclusive deals that are not available, even directly through the lenders themselves.

You May Save Money

When taking out mortgages direct with the lender they may require you to pay certain fees. These fees could include appraisal fees, application fees, and origination fees among others. With a broker on your side, you can sometimes benefit from waived fees, which, in the long run, can save you a lot of money.

The Disadvantages

You May Not Be on the Same Page

When hunting for a mortgage, your top goal is to find a deal with affordable rates and terms. This is because you may have the same mortgage for a long period of time. On the other hand, the broker gets paid by the lender depending on the business they bring in and some lenders pay higher commissions than others. In the past, there have been instances where unscrupulous brokers have placed deals with lenders who pay the most commission rather than finding the best deal for you.

The fact is that choosing the right mortgage broker is a very important part of the home buying process. Always choose a mortgage broker who is regulated by the financial Services Authority and has a positive set of testimonials on major sites like trust pilot or has been recommended by someone you know.

You Might Not Get the Best Deal

Many people believe that mortgage brokers always deliver the best deals. This is not always the case. In fact, there are lenders who may be able to offer you more favourable terms that are not available through broker networks.

This is why it’s important for you to to do some research for yourself. A couple of hours spent on popular comparison sites is a good place to start, you can then gauge the best deals you can find against the deals a mortgage broker can offer.

The Initial Offer from the Broker May Be Changed by the Lender

A broker has the facility to get you a very quick offer from lenders, commonly known as Pre-Approval. This means the broker believes the rates and terms of the loan will not change even after you apply for the mortgage with the lender.

However, this is not a guarantee of the mortgage amount or rate, because it is not until you fully apply for the mortgage that the lender checks all the details you have provided and carries out a valuation on the property you are buying. Therefore, until you receive full approval for your mortgage, you can’t be 100% certain of the terms of the loan.

While brokers such as The Mortgage Broker could save you a lot of time and money when hunting for a mortgage, this doesn’t mean you’ll always get the best deal. Therefore, always do your own research to get some valuable information on the mortgage market before you approach the broker of choice.