You are in the market for that first house. When you finally find one you want to buy, you will be facing one of the most important decisions of your life: how you're going to pay for it. For most people, the mortgage is a must. That leads to the second most important decision: whether you are going to go directly to a lending institution or use a mortgage broker instead.
A mortgage broker offers a lot of benefits that you cannot get from a bank or building society. Indeed, the mortgage broker could end up being your best friend in the home-buying process. Their work could mean the difference between actually getting the house of your dreams and having to settle for second best.
If you are thinking of going directly to a bank or building society, think again. Here are the top five reasons to use a mortgage broker instead:
1. Mortgage Brokers Are Specialists
Mortgage brokers in the UK are financial advisers that specialise in giving mortgage advice. As such, a person cannot simply throw up a sign and open a brokerage. He or she must be recognised by the Financial Conduct Authority. And the only way to earn that recognition is to pass the Certification of Mortgage Advice and Practice (CeMAP) exam.
In short, mortgage brokers are both trained and certified. That means you can trust the advice you receive. Working with a mortgage broker means you are getting qualified advice from someone whose expertise is mortgages. If you go directly to a bank or building society, you may be working with a loan officer lacking any specific mortgage expertise.
2. Brokers Know the Market
Most mortgage brokers, except those tied to a single lender, know the market better than anyone else. They know what lenders are offering across-the-board. Moreover, they know where to find the best deals.
It is the mortgage broker's job to constantly stay abreast of what is currently available. It is also in his or her best interests. The more knowledgeable the broker is about the industry the more beneficial his/her advice will be. So mortgage brokers have a built-in incentive to stay abreast of the market.
If a broker wants your business, you can bet he or she will work as hard as possible to find you the best rates and terms. If he/she wants you to recommend him/her to others, you can bet he/she will bend over backwards to make sure you are pleased with the lending process. He or she can do all that better than a bank or building society because he/she knows the market better than they do.
3. Brokers Have Access to Special Deals
Also bear in mind that mortgage brokers often have access to special deals that you could never get through a bank or building society. This is possible through 'broker-only' deals offered by specialist lenders. These are deals made only through brokerage firms.
An especially good deal could end up saving you a lot of money. Wouldn't you want such a deal if you could get it? Well you can, but only through a broker. Going directly to a bank or building society is not going to help you.
4. Brokers Know How to Work with Lenders
Is it fair to say that your estate agent knows how to work with sellers and their agents? Absolutely. Your agent knows how the industry works. This person knows the habits and idiosyncrasies of other local agents as well. It turns out that mortgage brokers are in a similar position.
They know the tendencies and preferences of every lender they work with. They know when one particular lender might be facing a time crunch and will not have time to look through a mortgage application thoroughly. They will know if another lender is being especially friendly to new customers in an attempt to drum up more business.
The sum of all this knowledge is your broker's greater ability to get a deal done. When you go directly to a bank or building society, you are at their mercy. If they want to be especially difficult to work with, there is nothing you can do about it.
5. Brokers Act As Intermediaries
We finally get to the number one reason: brokers act as intermediaries between borrowers and lenders. That means working with a broker gives you an advocate. How does this help? By making the loan application and approval process easier and free of headaches.
Do you not understand the paperwork you are filling out? A call to your broker provides a quick answer. Are you not sure you have all the correct documentation? Your broker can tell you exactly what you need. You will never be left without help as long as you choose your broker wisely.
You can certainly go to a bank or building society to get your mortgage. A lot of people do. But working with a mortgage broker makes the whole process a lot easier. Why make applying for a mortgage more difficult than it needs to be? Why deal with banks and building societies on your own? Let a mortgage broker do it for you.