In the past you could speak to your bank manager about getting a mortgage, but this is less common nowadays.
Now a mortgage broker is the more familiar intermediary, or middleman, between a borrower and a lender. The borrower is a person like you, or in the case of commercial mortgages, a business; lenders are traditionally banks and building societies.
Think of a mortgage broker as a financial advisor with a strong specialty in mortgages, and a qualification to prove it. It is their job to trawl the hundreds of mortgage products available in the marketplace and to show you the ones best suited to your needs.
Brokers are required to have a qualification, the most common (and prestigious) of which is the Certificate in Mortgage Advice and Practice (CeMAP).
Oversight by the FCA (Financial Conduct Authority) and the requirement for a broker to be registered as an Approved Person ensures their continued compliance to strict professional standards. So you're in safe hands.
Here is a list of the various things a mortgage broker will do:
- Understand how much you want to borrow.
- Research deals based on your borrowing criteria.
- Advise on which mortgage products best fit your circumstances.
- Speak to lenders on your behalf.
- Oversee the application process.
Reading that list, it can feel a bit like a mortgage broker is just another expense added to the house buying process. We find that the real question people often have is "what does a mortgage broker do that I can't?".
They will have extensive conversation with you to establish what you are borrowing for, what your budget is, and how your circumstances - personal and professional - will affect your ability to borrow.
Tighter financial regulations mean that more questions must legally be asked to ensure people take out mortgages that they can afford to repay. These regulations are designed to protect the borrower, the lender, and the wider economy. A broker will talk you through everything, and their previous experience will help them advise you on rates and mortgage amounts that will be best suited to your circumstances. It can be hard to gauge this for yourself.
They are on hand to answer questions and clarify concepts throughout the process. Mortgages come with a lot of jargon and can be hard to navigate, so having someone knowledgeable to help out can be a real help.
Their existing relationships with lenders, and their extensive knowledge of the marketplace and trends, mean they can connect you with deals that are more relevant and suitable than those you might find for yourself.
These existing relationships can also lead to preferential rates and special deals that would not otherwise be available.
Their vast experience in completing mortgage applications mean they can help you avoid common pitfalls in the application process. There's nothing worse than painstakingly filling out an application form, only to be rejected for a small, avoidable error.
In short a broker can steer you in the direction of the best mortgage for you, and take the hassle out of the journey to get there.