Two common questions asked by first time buyers are “what do mortgage brokers do?” and “what’s the difference between a mortgage broker and going to my bank?” So let’s explain!
It’s easy to understand why this question is often asked. At the end of the day, if you’re a first time buyer, chances are you may not have spoken to a mortgage broker before. In simple terms, the role of a mortgage broker is to act on your behalf and find you the best mortgage for your particular circumstances. With hundreds of lenders in the market, each with different underwriting criteria and requirements, a mortgage broker is there to a) save you time, and b) increase your chances of obtaining a mortgage.
As an example, imagine you’ve found the house of your dreams. So you apply for a mortgage yourself which a couple of weeks later get declined by the lender. The reason being that when the lender completes a survey on the house they notice a takeaway is next door, and they don’t accept houses with takeaways next door. How were you to know? So now you’ve wasted two weeks and are no nearer to knowing what to do next. That’s where a mortgage broker comes in. A mortgage broker would be aware of such criteria and would eliminate lenders who apply such criteria when selecting a product for you at the outset.
The answer to this question follows perfectly on from the last section. Whilst going to visit your bank would certainly help identify whether they would accept a house next door to a takeaway, they won’t be able to confirm whether there are alternative better products for you in the market. Your bank will only be able to advise on their own products.
As mortgage brokers have access to multiple banks and lenders, they will be able to review thousands of rates and products available. Imagine getting a mortgage from your bank only to later find out you could have saved several hundred pounds a month had you gone elsewhere…
Before you even start thinking about how much you can borrow, or what type of property to buy, the first important step is to make sure you’re likely to be eligible for a mortgage. To help you with this, we’ve created a short quiz that will indicate whether or not you’re likely to be accepted.