Why use an independent mortgage advisor?
Buying a home is one of the biggest personal investments you are likely to make, and getting a mortgage to finance it is probably one of the biggest financial decisions you’ll make.
Getting the right mortgage can make a huge difference to your financial wellbeing, and an independent mortgage advisor (sometimes called a mortgage broker) can help you get the right mortgage.
Banks and building societies are a common starting point when looking for a mortgage, but they are usually tied to their own mortgage products, and those might not be the best type of mortgage for you, or offer you the best deal.
The job of an independent mortgage advisor is to use their in-depth knowledge of the market to search out the best mortgage to suit your particular circumstances and 'broker' a deal with the lenders on your behalf, taking away much of the pain of finding the right mortgage.
The mortgage market is complex and highly competitive and a good mortgage advisor will evaluate your personal circumstances, assess what you can afford, and with their knowledge and experience identify the 'right' type of mortgage for you, and find you the best deal, some of which may be special deals not publicly advertised or available directly.
They will often provide an administration service, completing application forms, submitting them to the lender, and dealing with any queries, simplifying and speeding the whole application process.
Are all mortgage brokers truly independent?
You should be aware that not all mortgage brokers are fully independent. There are three main types of broker:
Tied Agent: as the name inmplies, a tied agent may only offer mortgages from one or a limited number of lenders
Panel Linked: where the broker can offer mortgages from a selected range (panel) of lenders
Whole Market / Directly Authorised: these are fully independent advisors who are not tied to any specific lender, and can generally offer you the best range of mortgage options, although they might not be able to offer you some mortgages that are only available direct from the lender.
All mortgage advisors for residential mortgages are regulated, and must be registered with the FCA, and offer you advice when recommending the most suitable mortgage for you.
Being registered with the FCA means you are protected and you can complain to the Financial Ombudsman if you are given the wrong advice.
Will I be charged?
Mortgage brokers might charge a fee for their service or receive a commission from the lender. It is quite common for independent advisors to charge a fee to carry out an initial financial assessment and to gain an agreement in principle for a mortgage. They should tell you in advance about any up-front fees, and they should also tell you if they are being paid commission.
If you don't use an independent advisor, you may end up with a far worse deal than you may otherwise get; a good mortgage advisor should be be able to save you the cost of their fees many times over.