The benefits of using a mortgage broker (5)

In this brief guide, we are going to discuss the benefits of using a mortgage broker.

A mortgage broker can be very helpful if it’s your first time getting a  mortgage and even if it isn’t your first time getting a mortgage then using a mortgage broker can be very beneficial.

Below are some of the benefits of using a mortgage broker:

Mortgage brokers can assess more mortgage products

Mortgage brokers will usually have lots of experience

Mortgage brokers have liability insurance 

Mortgage brokers can save time

Mortgage brokers have niche experience

Mortgage brokers usually have access to exclusive deals

Mortgage brokers are regulated

Mortgage brokers can assess more mortgage products

One of the main benefits of using a mortgage broker is that most mortgage brokers will be able to access what is termed as a whole of market products. This means the mortgage broker can access a lot more products than you may be able to do through searching the whole of the mortgage market.

By searching and comparing from a whole of market product range the mortgage broker will be able to find mortgage products which will be more suited to your needs and likely cheaper.

This is much better than comparing mortgages yourself of going to a mortgage adviser in a bank who is only able to advise on the bank’s mortgage products and not a whole of market mortgage range.

Mortgage brokers will usually have lots of experience

One of the other main benefits of using a mortgage broker is that most mortgage brokers will have a lot of experience in dealing with mortgage lenders and their mortgage underwriters. This means a mortgage broker can better advise you on which mortgage lender is more likely to lend to you based on your personal circumstances.

This is especially useful if it is your first time getting a mortgage and you are not sure where to start. A mortgage broker will be able to explain the different stages of the mortgage application such as getting a mortgage in principle, the key facts illustration document, a mortgage offer, the mortgage valuation and the conveyancing process.

If you have bad credit or are looking for a mortgage lender who is open to lending to people with complex incomes, self-employed borrowers or anything which may be considered niche then using an experienced mortgage broker could be very beneficial.

An experienced mortgage broker would also be able to advise you on if you are able to qualify for government schemes which may reduce your mortgage deposit requirement and make your mortgage affordability increase.

Government schemes such as:

• Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
• Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
• Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
• Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
• Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
• Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
• Right to buy– allows you to buy your home at a discount price.
• Preserved right to buy– same as above.
• Right to acquire- same as above.

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.

Another one of the benefits of using a mortgage broker is that an experienced mortgage broker may also be able to recommend which conveyancers to use based on their experience with using such conveyancers in the past. 

This could greatly reduce how long the mortgage application process takes by working with a fast and reliable conveyancer.

This may be very relevant as many mortgage lenders have a time limit for which their mortgage offer is valid and this means you must complete your mortgage application in that time if not you risk having to seek an extension from the mortgage lender or being required to make a new mortgage application.

Mortgage brokers have liability insurance 

One of the other main benefits of using a mortgage broker is that all mortgage brokers are required to have liability insurance. This means if anything goes wrong (e.g being mis-sold a mortgage) during your mortgage application process you will be able to have some recourse by seeking compensation from the mortgage broker who will then claim from their liability insurance.

This is much better than trying to get a mortgage by yourself and then making huge mistakes which cost you enormously but you are then unable to seek any recourse from anybody.

Mortgage brokers can save time

Due to the number of experienced mortgage brokers will have with processing mortgage applications they will be able to save you a lot of time by knowing how to navigate through issues, knowing what to do next and how to efficiently process a mortgage application.

This is a significant benefit of using a mortgage broker. In contrasts, if you were to try process your mortgage application yourself, you may not know what to do and how to do it in the most efficient manner.

Most mortgage brokers will also help you by filling out the mortgage application and ensuring there are no errors on it.

Mortgage brokers have niche experience

One of the main benefits of using a mortgage broker is the fact that mortgage brokers have niche experience in particular fields.

There are mortgage brokers who specialise with bad credit mortgages, buy to let mortgages, complex income mortgages, first-time buyer mortgages, equity release mortgages etc.

This means you can receive more specific knowledge and guidance on your particular mortgage needs.

Mortgage brokers usually have access to exclusive deals

Another main benefit of using mortgage brokers is that most mortgage brokers will usually have access to exclusive mortgage deals based on the mortgage packagers they work with.

As a personal individual, you won’t be able to get access to this same mortgage deals and these deals will also not be available directly from the mortgage lender.

Mortgage brokers are regulated

One of the main benefits of using a mortgage broker is that mortgage brokers are regulated. This means they must treat you fairly and abide by strict regulatory standards and practises in how they offer you advice.

If the mortgage broker fails to do this you can report them to the financial ombudsman and the financial ombudsman can even award you compensation.

On the other hand, if you had obtained the mortgage without using a mortgage broker then you will have no regulatory body to report to and will not be able t claim any compensation as the blame will law solely on you. 

Using a mortgage broker

You may want to consider using an independent mortgage broker to get a mortgage.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases. This could be over 11,000 mortgage products. This may have some advantages than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. 

This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your remortgage is indeed a possibility before you make a full mortgage application. 

Once you have found a home you want to buy or are satisfied with the mortgage offer for your remortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer. Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it, they will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.

Questions to ask your mortgage broker

In this brief guide, we discussed some of the benefits of using a mortgage broker. If you have any questions or comments please let us know.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.