We show you how to find a qualified mortgage broker and how they can help you find the mortgage that suits your needs.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Using a broker can help in several ways when you’re shopping around for a mortgage. For starters, an independent broker can compare mortgage deals from many different lenders to help find the best mortgage deal for your needs.
Using a broker can also help maximise your chances of being accepted for a mortgage the first time you apply. They can also provide support if you have specialist mortgage needs. For example, if you are self-employed and have less than three years’ worth of accounts, they can scour the market to find a mortgage that will accept you. Similarly, they can review your options if you want to buy a listed building.
However, if you plan to use a mortgage broker, it’s important to do your research.
Below is a list of ten questions that you need to ask a mortgage broker before doing business with them:
A mortgage broker will need to hold an FCA (Financial Conduct Authority) recognised qualification such as a CeMAP (IFS School of Finance Certificate in Mortgage Advice and Practice) or Cert MA (Chartered Insurance Institute Certificate in Mortgage Advice).
All mortgage brokers operating in the UK must be regulated by the FCA or work as an agent of a regulated firm. This type of regulation means you will receive a certain quality of advice and have access to FCA complaints and compensation procedures should there be any problems. You can check whether a broker is regulated by using the FCA register.
Ideally, you should opt for a whole-of-market mortgage broker rather than one that can only recommend mortgages from a selected panel of lenders. A mortgage broker at a bank or building society will only be able to tell you about the bank’s own mortgage products.
Whole-of-market brokers review a more comprehensive range of mortgages because they can select products from any lender. This means they will be more likely to find you the best deal available for your circumstances and may be able to save you money.
A mortgage broker should be able to:
Explain the various mortgages available and the different types of deals
Advise you on how much you can afford to borrow
Have access to special mortgage deals that are not available on the open market
Help you prepare for your application to boost your chances of success
Be able to save you money overall by finding a mortgage with lower interest rates and fees
Even whole-of-market brokers don’t have to include the direct deals offered by banks and building societies. However, a good broker will still include these offers in their evaluation, even if it means that they later lose out on your custom.
Find out whether they predominantly offer a phone, online or face-to-face-based service and think about which you would prefer.
Ask them to clarify their customer services policy and explain precisely when and how you can get hold of them. A good broker should make themselves readily available to answer any queries you have.
Some brokers will be online only, in which case you will need to check when you can contact them and how long you should expect to wait for a reply.
You should be told how your mortgage broker expects to be paid from the outset. Brokers earn money in one of two ways:
Some brokers will charge a fee for their service. This will either be on a flat fee basis or be calculated based on a percentage of the amount you want to borrow. These fees may be charged upfront or once you complete on your property.
Other brokers are paid a commission by your new lender. These brokers typically advertise themselves as ‘fee free’, and their services don’t cost you anything.
Some people prefer to pay a broker fee to ensure that any recommendation is unbiased.
However, there are FCA-regulated checks to monitor the impartiality of lenders working on commission, so in theory, this shouldn’t be an issue.
Check whether the mortgage broker has professional indemnity insurance in place. This is important as it will give you some comeback against poor advice. All mortgage brokers should have some form of PI in place.
Most mortgage brokers will offer to help you arrange insurance products to accompany your mortgage.
Mortgages generally require you to have buildings insurance in place as part of their terms and conditions, but that’s not the only product brokers can proffer.
Products sold alongside a mortgage include life assurance and home, critical illness and income protection insurance.
When you buy insurance alongside your mortgage, check whether your mortgage broker is tied to one particular insurance broker, works from a panel, or is whole-of-market.
If the broker doesn’t search the whole market, it is important to compare relevant insurance products yourself to ensure that you really are getting the best deal.
When looking for a good mortgage adviser, personal recommendations are always a good place to start. It is reassuring to have the testimony of someone who has used the broker and been happy with both the service and the mortgage deal they provided.
It is also important to interview a potential broker yourself to ensure that they are sufficiently able to help you.
A conversation over the phone can act as an initial filter. If you are happy with the broker, then you can arrange a meeting with them.
A face-to-face conversation will mean you can then get a real feel for both the knowledge and competency of that mortgage broker.
A mortgage broker has access to more deals than you. This is important because the difference between taking out a mediocre mortgage rather than the best possible deal for your circumstances could run to tens of thousands of pounds.
For example, the difference between paying a rate of 4.5% and 6% on a £100,000 mortgage over a 20-year term is £1,030 a year.
This adds up to a total of £20,600 over the whole mortgage.
How your broker responds to your questions is almost as important as what they say. They should appear open and confident in their responses and be able to answer any questions you have in a way that you can understand.
Finally, they must seem trustworthy and personable; you should come out of any meeting feeling that they are capable of finding you the best deal possible.
If you have any doubts, start looking for another broker – there is nothing wrong with interviewing several before you settle. Remember, you’re depending on this person to save you a great deal of money over your mortgage term.