Why Use a Mortgage Broker
With more than 400 different mortgage providers offering several thousands of different mortgage products in the UK, choosing the right mortgage for your personal circumstances can be difficult.
A competent, qualified, FSA regulated mortgage broker should be able to find the appropriate mortgage for you, possibly a product of which you were totally unaware and would never have found unaided. In the past, some mortgage brokers had a slightly dubious reputation, but in recent years this sector has done much to weed out the worst offenders.
Advantages of Using a Mortgage Broker
A mortgage broker should be able to save you considerable time and effort. This is particularly true if the property that you wish to purchase is slightly unusual. After you have explained your requirements, the broker should be able to find you the most suitable mortgage, arrange the associated documentation and handle most of the dealings with the mortgage lender and solicitors.
Mortgage Brokers' Services & Fees
As they are regulated by the Financial Services Authority (FSA)), mortgage brokers are required to provide a Key Facts Illustration (KFI) document for the mortgage being offered to a client. A KFI is a comprehensive document that includes several items relating to the mortgage broker. These include:
whether the mortgage broker is able to recommend mortgages from across the entire market or only products from a restricted list of lenders;
what fee will be charged to the borrower by the mortgage broker;
what commission, if any, will be payable to the mortgage broker by the financial institution;
whether the mortgage broker will offer the client a single choice or a selection of mortgage options;
how the borrower can contact the Financial Ombudsman if they wish to complain about the service received from the mortgage broker.
Types of Mortgage Brokers
Mortgage brokers' firms come in all sizes, from individual financial advisers to large institutions, both regional and national. Nowadays, most mortgage UK brokers have some sort of online presence, via portals or individual websites - if you type 'mortgage brokers' into Google, you will get around 2 million UK hits. Many of these websites include online mortgage calculators so that you can carry out preliminary calculations, before you have to make a decision about which mortgage broker to choose.
Mortgage brokers are in a good position to help borrowers find the way through the mortgage maze;
details of fees charged and commission received have to be disclosed, up front;
some mortgage brokers only offer mortgages from a limited selection of lenders.