While it's possible to secure a mortgage on your own, using a mortgage broker has become increasingly popular in recent years. In this blog post, we will explore the pros and cons of using a mortgage broker and the situations in which using a mortgage broker may be beneficial to help you decide on whether using a mortgage broker is the best route for you.
When should you consider using a mortgage broker?
If you’re unsure about what type of mortgage loan is best for you, an experienced mortgage broker can review your finances and suggest options that work within your budget.
Mortgage brokers are ideal if you need assistance identifying potential problems, like an appraisal that could affect the sale and they may even help you save money by negotiating better terms or rates with lenders.
How much does a mortgage broker cost?
The cost of using a mortgage broker will vary depending on the services you require and the experience and qualifications of the individual. Many brokers are paid by lenders or receive a commission from them, so it is possible to get advice without paying upfront fees. Remember, it’s important to understand all fees before you agree to any services.
Pros and cons of using a mortgage broker
Benefits of using a mortgage broker:
● Access to multiple lenders and products
Mortgage brokers have access to a range of lenders and mortgage products, including those that may not be available to borrowers directly. Not only does this increase the likelihood of finding the best deal, but it could result in lower interest rates and possibly better loan terms.
● Expert guidance
Mortgage brokers are mortgage experts who can guide borrowers through the mortgage process, including navigating complex paperwork and understanding the various types of mortgage products available.
● Saves time and effort
A mortgage broker can save you time and effort by streamlining the mortgage application process, as they handle many of the administrative tasks associated with securing a mortgage.
● Increased chances of approval
Mortgage brokers can help borrowers with less-than-perfect credit scores or non-traditional income sources secure mortgage financing.
● Lower fees
Some mortgage brokers work on a commission basis, which means they are paid by the lender, not the borrower resulting in lower fees for lenders.
Cons of using a mortgage broker:
● Additional fees
Mortgage brokers do typically charge a fee for their services, these must be paid upfront on application or when the mortgage starts.
● Limited lender access
While brokers may work with several lenders, they may need access to some available lenders or mortgage products.
● Potential conflicts of interest
Some brokers may be incentivised to steer borrowers toward certain lenders or products based on commissions or other financial incentives. In addition, some brokers could be motivated to close deals quickly and may prioritise this over finding the best deal for the borrower.
● Lack of control
Working with a broker means giving up some control over the mortgage application process to a third party.
Using the services of an experienced mortgage adviser can be a significant asset when securing a mortgage, particularly if you want to take some of the pressure of securing a mortgage yourself. Whether you decide to use a mortgage broker or not, find out more about the process of getting a mortgage by reading our handy guide on the topic. If you're looking at mortgage options because you are thinking of selling your house, then why not get started by booking a free valuation appointment today?
