Why it can pay to use a broker in the post regulation mortgage market
Posted 23 September 2015 by Nick Parkhouse
Choosing the right mortgage for you is not as easy as picking the lowest rate and submitting your application form. With dozens of different fees applicable to mortgages and lenders whose criteria vastly differ from one another, finding the most appropriate home loan for you can be a difficult business.
To complicate matters further, rules introduced in 2014 fundamentally changed the ways that lenders assess mortgage applications.
One way to get the perfect deal is to use a mortgage broker and there are two ways in which a broker can help you.
Finding the most cost-effective deal
With thousands of mortgage deals in the market a good, independent mortgage broker will scour the market to find the most cost-effective deal for you.
Crucially, this may not simply be the lowest rate. Other factors such as application fees, product charges and other associated costs should be taken into account when looking at the overall cost of your mortgage. A broker can work this out for you.
Some lenders also offer products that can only be accessed through a mortgage broker and these can often offer significant savings.
Keith Osborne, editor of Whathouse.com, says: "Always ask the broker what their fee structure is. Some lenders take a fee directly from the mortgage lender while others charge you a flat fee or a percentage of the mortgage amount."
Finding a lender that can help you
Since the introduction of the Mortgage Market Review rules in 2014 there has been a huge shift in the way that lenders assess mortgage applications. They now look closely at your income and outgoings and take into account a range of factors including childcare costs and the amount you spend on food and hobbies.
Good mortgage brokers know the subtle differences between the way that lenders assess applications and can use this to your advantage. For example, some lenders are more lenient when it comes to childcare costs while others will let you take your mortgage out over a longer term.
Osborne adds: "A mortgage broker not only knows where the good deals are but which lenders will be prepared to consider your application. This can save you a huge amount of time rather than simply picking a good deal and then being declined by a lender because you don't tick all of their boxes.
"In addition, brokers know which lenders offer good service. This can be absolutely crucial if you need your mortgage application dealt with quickly or you need a fast turnaround on a mortgage offer to secure a property."
Click here to find out how Whathouse.com can help you to find the right mortgage.