A mortgage broker is a company or person that arranges for a mortgage between borrowers and a lender. These brokers work directly with the borrower in order to help them to ascertain what type of mortgage they require. They will then be able to find a mortgage deal that matches their specific needs and criteria. This applies irrespective of whether you are a first-time buyer or are simply wanting to and visit Loan Corp for more assistance. remortgage your current property.
Read on to discover all that you need to know about what a mortgage broker is and what they do,
Why Should I Use A Mortgage Broker?
A mortgage broker will help you to navigate through each stage of finding and applying for your mortgage. This helps you to obtain the best possible deal available on the basis of your invidious circumstances.
The services offered by a mortgage broker include the following:
- Suggesting the most appropriate mortgage for your needs
- Helping you to assess your individual financial situation
- Searching the market for the best deals to match your needs.
There are numerous pros and cons to hiring a mortgage broker to assist you in your search for the best mortgage deal. These include the following:
- Convenient: Mortgage brokers are very convenient if you do not have a strong working knowledge of the mortgage and finance markets. You do not need to spend excessive time searching for mortgage deals. You simply need to fill in the relevant paperwork and liaise with lenders.
- Access: Due to the experience that mortgage brokers have, they will normally have access to a number of mortgage lenders which means that they have an enhanced chance of finding a mortgage deal that suits your needs.
- Expertise: The mortgage industry can be highly confusing. However, these things can change drastically as interest rates will fluctuate and deals can change accordingly. Thus, having access to an expert is essential as they will be able to clearly outline the best practice and path to take.
- Most mortgage brokers are not free. Thus, this adds to your overall costs at a time when you are trying to save as much money as you can. Fees will also vary drastically between different brokers. Thus, it is worth searching around in order to find the best broker for you.
- There are also some limitations to the amount of access that some brokers have. Not all brokers will have direct access to the whole mortgage market. This means that relying only on a mortgage broker can limit your overall options. Some mortgage brokers will also prefer specific lenders as they have built a strong relationship with them. Therefore, you should always assess how many lenders a specific broker works with in order to see if they have a preference for any specific lenders.
- Qualifications can also vary drastically between different brokers. Thus, hiring an incompetent and inefficient broker can actually slow your overall process down, costing you more money than they are worth. Because of this, you should ensure that you have vetted your broker carefully prior to hiring them.
How Much Does A Mortgage Broker Cost?
As you may expect, the cost of hiring a mortgage broker will vary drastically depending on which broker you choose. These costs are also highly influenced by a number of factors, such as the amount that you want to borrow. The average cost for hiring a broker is £500. However, different brokers can and will charge more than this. These fees occur in the following ways:
- A Fixed Fee: A broker can set a fixed fee for their services. They will then be able to find and obtain a mortgage for you. This should always be agreed to in writing prior to you engaging with them.
- Hourly Rates: Charging by the hour is far less common. However, some brokers do choose to charge an hourly rate. In this case, you should obtain a written estimate of how long it may take to arrange a mortgage in order to obtain the most likely fee.
- Commission: These brokers typically advertise their services as “fee free”. However, this often means that they will receive a commission from specific lenders. Thus, it is important that you ask them whether they are working with specific lenders prior to engaging with them.
- Percentage: When a broker sets their fee at a specific percentage of your mortgage. For example a 1% fee on a £250,000 mortgage would amount to £2,500 in fees.
To conclude, you should always determine what fees will be charged whenever you are hiring a specific mortgage broker. This will help you to avoid mortgage brokers that overcharge you for their services. Overall, it is highly useful to hire a mortgage broker to assist you in finding the best mortgage for you, especially if they have connections to a wide range of lenders.