How do mortgage brokers decide which deals to show you?
Mortgage brokers are an important part of the house buying process and data from mortgage technology firm IRESS suggests that up to 80% of all mortgages are now sold through brokers.
Some property buyers choose to go it alone and many seek to find cheap deals on price comparison sites. Is there really that big a difference between finding a mortgage yourself compared to using a mortgage broker, and how do they decide which deals to show you?
A reassuring fact about the mortgage broker business industry is that The Financial Conduct Authority (FCA), obliges them to be upfront and clear with you about the advice they’re offering.
How do mortgage brokers choose which deals to show you?
There are a number of factors that mortgage brokers take into account when selecting mortgage deals. It mostly depends upon your financial situation so they will ask you:
Which property you want to buy, and how much it’s worth Whether you’ve made an offer for that property (and if so, whether it’s been accepted) How much you earn How much you spend How much you’ve saved up for a deposit Whether you’re using any government schemes, such as Help to Buy, Shared Ownership or Right to Buy
It is a good idea to get to know your finances before you speak to a mortgage broker in order to help them to secure the right deal for your personal circumstances.
Once your broker has all the information they need, they’ll have an idea of how much you can borrow. They will talk you through the different product types, for example fixed-rate versus variable-rate mortgages.
Your broker will evaluate all the different options from different available lenders, taking into account interest rates, fees and loan-to-value rates (LTV).
They will use all the information they have gathered from you to find you a mortgage deal that:
You can afford Gives you the lowest possible interest rate Gets you a big enough loan without saddling you with unnecessary debt
Brokers can access exclusive lender deals that are only available through brokers which offers you a significant advantage when trying to find the right mortgage. Also, there are some lenders which can only be accessed via brokers, so no matter how savvy you are in finding great deals, there will be some that you just will not be able to access on your own.
It’s not just about the money
Mortgage brokers are not only influenced by the products available. A key issue is the speed at which an application can be processed. This is especially true if you’re buying a new build.
If it takes a long time to get a mortgage application through to completion, it could mean you losing your dream home.
Mortgage brokers use their in-depth fact-finding process to check lender suitability and can also factor in their extensive experience and knowledge of the most appropriate lenders when considering your individual circumstances.
Clarity of criteria of mortgage deals is hugely important. Unclear lending criteria can mean your mortgage application gets halfway through the process before it’s revealed that you were never suitable anyway. This means you are back at square one with a lot of time and energy wasted and this can be incredibly disappointing.
As already mentioned, mortgage brokers are obliged by the FCA to give clear and helpful advice providing reassurance and confidence that you and your mortgage finances will be in safe hands.
If you would like profession, impartial, mortgage advice, then call one of our friendly, fully qualified brokers who will be happy to speak to you about your mortgage requirements.