People often ask why they would choose to use a mortgage broker rather than go to their bank. Or, indeed why they couldn’t go through the mortgage process themselves rather than asking for help.
The answer is, you are free to choose whichever option you wish … as long as you make an informed decision as to which route you choose.
There are many reasons people would just go back to their existing lender or bank when looking for a re-mortgage or if they are making an onwards purchase. Inertia is a common reason – it would appear to be the easy option and to a certain extent, you know what to expect.
In a nutshell you have 3 options:
You could choose to go directly to a bank
The bank (subject to affordability and credit check) may be able to offer you a selection of mortgages but they will be from their own range of mortgages.
You could choose to arrange your mortgage yourself
You may decide that the bank doesn’t give you enough options and you’d like to shop around. You could use the internet to help or you could visit a number of other banks or building societies. You will only have access to the lenders who deal directly with the public.
You could use a mortgage advisor or broker
A mortgage advisor will carry out the research on your behalf. They will search for the most appropriate mortgage to suit your requirements, circumstances and affordability. They may have access to lenders who don’t deal directly with the public and they may have rates which are exclusive to intermediaries.
When you choose a broker, it’s important to know whether they are offering mortgages from a “panel” of lenders or whether they search the “whole market”.
Although lenders may have similar interest rates, they will have different criteria when it comes to the applicant and/or the property.
They may also have different ways to assess the affordability of the mortgage applicants.
– Does your lender take child care costs into consideration when assessing affordability?
– Does your lender take travel to work costs into consideration?
– Does your lender have a minimum income requirement for a buy to let mortgage?
– Does your lender limit the size of your buy to let portfolio?
– Does your lender take your pension contributions into consideration when assessing affordability?
– How does your lender view you as a self-employed applicant?
There are many factors involved when considering a mortgage if you are applying for your own mortgage: your income, expenditure, family circumstances, property value, pension contributions and credit rating to name a few.
Lenders view these factors slightly differently and each will have their own affordability calculator. So, you may be able to borrow significantly more (or less) when you try different lenders’ affordability calculators. If you are applying for your own mortgage you will need to do all of this research yourself.
A mortgage broker will help you consider all the options available to you with a range of lenders across the whole market and tailor the most suitable and cost-effective mortgage to your needs and circumstances.
If you are re-mortgaging, it may be that staying with your existing lender is the most appropriate course of action, but if you have searched the whole of the mortgage market for alternatives you will at least have ruled out all the alternatives and generated a fully-informed decision.
And your broker may even be able to help you with the re-mortgage anyway!
For a complementary and no-obligation initial discovery session around your new mortgage, contact me today!
This information illustrative purposes only and does not constitute advice.
If you have any questions or would like to review your current mortgage arrangements please don’t hesitate to get in touch!
Phone: 01525 309300
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Your home may be at risk if you fail to keep up the repayments on your mortgage.
The Financial Conduct Authority does not regulate Buy to Let mortgages.
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