Why Use a Mortgage Broker?
Our guest today is Natalie Thompson. She’s a mortgage adviser at CS Mortgage Solutions. We’re going to talk about the differences between using a mortgage broker and going direct to your bank. Natalie got into the role of being a broker around five years ago, from an estate agency background, which she feels is vital to be able to do the role.
The process of applying for a mortgage through a bank.
Generally, you’d need to make an appointment with an adviser. They would then go through all your personal details, to talk to you about your income, your outgoings. They’ll also talk to you about the most that they could look to lend you and whether you’re actually going to fit into their lending criteria. Provided you fit within their criteria, they would then discuss what rates and products they could offer you and maybe even get you an agreement in principle as well.
How does the process differ from speaking to an independent mortgage broker like yourself?
An independent broker is going to help you through every step of the property transaction, not just with the mortgage. They can help with negotiating on house price, even go to viewings if you want them to. They can instruct solicitors and service on your behalf. They can help with solicitors paperwork. So you get all that extra support all the way through.
They are also not tied to just one mortgage product. They can have a look at all the banks and products available to you so that you get the best deal available.
Don’t banks have access to all the same mortgage deals?
Often brokers can get exclusives, so it might even be with the same bank, but there might be an exclusive that you can’t get from your bank directly. Banks will promote and loan their own products, which is therefore limited in numbers of products. There are many lenders out there who are not well known on the high street, that you otherwise would not search for or have access to.
Will a bank lend to you if you are self-employed?
We’re not speaking about specific banks. I don’t want to say yes or no to that bank.
Generally a broker will place you with a specialist lender that compliments you.
Whereas banks have only got that company that they work for and the restrictions of their products. They cannot put you with someone else. If you don’t fit their criteria they cannot offer you a mortgage.
What if you have adverse credit?
We would definitely say if you feel like you’ve got adverse credit, the best person you could speak to is a broker. They work with specialist lenders, they are working with lenders that will look to take people that have had bad credit in the past. Don’t let that put you off. Definitely get in touch with the broker.
Often a lot of people that don’t even know what kind of state their credit report is actually in when they first come to talk to somebody about their mortgage. That is something that a broker can help you do, especially on your initial appointment. They’ll definitely bring up credit score and credit reports that can help you. That gives the broker a really good idea of what lender they can use for you.
What are the benefits of going to see a bank versus a mortgage adviser?
Going to your bank is probably quite familiar. You might be happy with their service. You’ve got some trust with that bank and if you bank there already, probably many times.
What are the benefits of going to see a mortgage adviser versus a bank?
Well you are going to save money and its is going to be much more convenient for you:
- We can shop around to get you the most appropriate deal for your circumstances (Cheaper rate/lower monthly payments/specialist lender)
- We can save and negotiate money off the house price for you
- We can shop around for solicitors quotes
- We can help give guidance on the surveys
- We can review the cost of moving for you and ensure these costs have been accounted for: Stamp Duty, Legal Fees, Estate Agent Fees and Removals costs etc
- We can work on your behalf, chasing the mortgage and dealing with solicitors.
- We can update you on our work at a time convenient to you – not based around bank opening hours
- We do this all the time, the paperwork is familiar to us and we can sort it for you
- We can make sure the mortgage fits your lifestyle and has been tailored to fit comfortably around your outgoings so your lifestyle is complimented and not impacted by owning a house
What if I’m looking to remortgage, should I still speak to you?
If you’re looking to remortgage, speaking to a mortgage broker is a great option because we have access to many different lenders as opposed to a high street bank who is likely to only offer you one option, or at least very few options.
Having access to various lenders means we can ensure we are getting you the best rate for your remortgage.
With so much available to us on the internet, you might be thinking ‘I could just do this myself’ – while you can shop around online and go into various different banks to try and get the best remortgage rate, it not only takes up a lot of your time and effort but by coming to a broker, you’re being exposed to more options and lenders that you may not have even heard of or thought to look for. So your chances of securing a better rate are a lot higher and we do all the leg work for you!
Is the cheapest rate always the best rate?
In the world of mortgages, it’s normal to strive for the cheapest rate available to you. But this isn’t necessarily going to be the best rate.
There are various factors to consider when securing a mortgage deal; firstly, you need to fit the criteria of the lender. If you’re self employed with only a few years of accounts, the lender offering the cheapest rate might not be willing to work with your circumstances, so we might have to approach a specialist lender that’s a little more expensive in order to fit your criteria.
If you approach a bank in this scenario, you’re likely to struggle as they don’t necessarily have access to the number of specialist lenders a broker does, so you’re immediately narrowing your chances of success.
A broker is more than just a broker…
If you are looking to buy a house, a mortgage broker can come with you to a house viewing to offer support and reassurance on your decision. A broker will offer a more balanced view compared to the estate agent, as it’s important to remember they are working on behalf of the seller too.
Brokers also work with solicitors paperwork on a daily basis, so we can help you navigate through the jargon and explain anything you may need more clarity on to ensure you fully understand.
Mortgage broker fees
The fees you incur with a mortgage broker completely depend on the service you require and each broker tends to have a different pricing structure. However a good average to go off is anywhere between £200 and £700 for a mortgage based service.
Using a bank and not paying a broker fee is going to save you the price of a broker fee, but the money a broker will save you in the long run when it comes to securing you the best mortgage rate, will far outweigh the initial fee.
In addition to this, most mortgage brokers don’t charge you anything until you’ve got to the full application stage, so the initial advice you receive is free.
This is something we advise you take complete advantage of – if you’re stepping onto the property ladder for the first time, the best thing and the first thing you should do is speak to a broker before you do anything else.