Wondering why and what the benefits of working with a mortgage broker over a bank are?
More often than not you’ve probably thought to steer clear of a mortgage broker because of the associated costs that may come with them.
But what if we told you that working with a mortgage broker could save you thousands and that there are also associated costs with arranging a mortgage at a bank?
As mortgage brokers, our job is to maximise your homeowner dreams or your business potential. That’s why here, we’re going to talk about the benefits of using a mortgage broker to help you search for and arrange your mortgage.
What is a mortgage broker?
Do you know what the role of a mortgage broker is? If we’re going to talk about the benefits of working with a mortgage broker and de-mystify any doubts you may have, you need to understand the purpose of one.
For a start, you might hear us referred to as either a mortgage broker or mortgage adviser. There is no real difference.
A mortgage broker is a professional who acts as an intermediary between borrowers and lenders to help individuals and businesses obtain financing for property transactions.
Brokers work with a variety of lenders to find the best mortgage option for the borrower’s needs and financial situation. That means that they are focused on you as an individual.
The broker also assists the borrower in completing the loan application, gathering required documentation, and negotiating the terms of the loan with the lender.
In return for these services, the broker may charge a fee or receive a commission.
In short, the role of a mortgage broker is to make the process of obtaining a mortgage easier and more convenient for you, the borrower, by offering specialised expert advice and support throughout the loan application process.
What are the benefits working with a mortgage broker for your mortgage?
As mortgage brokers, we can be an invaluable resource for anyone looking to buy a home or refinance their existing mortgage. The key advantages and benefits of working with a mortgage broker tend to be:
1- Access to a Wide Range of Mortgage Options: One of the biggest advantages of using a mortgage broker is that we have access to the whole market. That means access to a variety of mortgage products from different lenders other than (and including) the high street lenders. By getting to know you as an individual, we can help you compare and find the best fit for your specific needs and financial circumstances. Whether you’re looking for a low-interest rate or flexible repayment terms, a mortgage broker can help you find the right mortgage for you.
2- Expertise: Another advantage of working with a mortgage broker is their expertise and in-depth knowledge of the mortgage market. We have years of experience helping people find the right mortgage for their needs and can provide expert guidance on the best options for your individual circumstances. Whether you have bad credit, are a first-time buyer or looking for bridging finance, we can help you navigate the market, your options and the application process, making the process of securing a mortgage much smoother and less stressful.
3- Time-Saving: The process of finding a mortgage can be time-consuming and overwhelming, especially if you’re trailing the high street or are unfamiliar with the mortgage market. A mortgage broker can save you time by doing the legwork for you. We gather information, compare rates and terms, and present you with a selection of the best options. This can help you save time and energy and ensure that you find the right mortgage for you as quickly as possible.
4- Convenience: A mortgage broker can also handle all the necessary paperwork and communication with the lender, so you can sit back and relax while they do the work. This can be a huge advantage for anyone who is busy or has a limited amount of time to devote to the mortgage process. With a mortgage broker taking care of everything for you, you can rest assured that your mortgage application will be processed efficiently and effectively.
5- Cost Savings: In some cases, a mortgage broker may be able to secure a better interest rate or more favourable terms than you would be able to get on your own. This can be especially true if you have a less-than-perfect credit score or a unique financial situation that makes it difficult to find the right mortgage on your own. By working with a mortgage broker, you can potentially save thousands of pounds over the life of your mortgage.
6- Neutrality: We are neutral, we have no vested interest in promoting one lender or product over another. Their main goal is to help you find the mortgage that is best for you, regardless of which lender or product it comes from. This impartiality can give you peace of mind and ensure that you are making an informed decision that is in your best interest.
Mortgage brokers vs. banks
You know the advantages but how does it compare to the high street banks?
The choice between using a mortgage broker or a bank for obtaining a mortgage loan will depend on a variety of factors.
Some of the key differences between the two options:
- Work with multiple lenders: Mortgage brokers have relationships with a wide variety of lenders and can compare loan options to find the best fit.
- Provide a wider range of options: Because we work with multiple lenders, brokers have access to a wider range of loan products and can help borrowers find the right loan for their specific needs.
- May offer lower rates: As we’ve said, brokers may be able to secure lower mortgage rates because we can shop around and negotiate with multiple lenders.
- Provide a single point of contact: Mortgage brokers act as a single point of contact for you throughout the loan process, saving you the time and effort of dealing with multiple lenders.
- Limited product options: Banks generally offer their own loan products, which may be limited in comparison.
- May be more convenient: It may be more convenient to work with a bank you already have a relationship with, as they may be able to handle all of your banking and mortgage needs in one place.
- Potential for a more streamlined process: Because banks are only offering their own products, the loan process may be more streamlined, with fewer variables to consider.
- May have higher rates: Banks may not be able to offer as competitive rates as brokers because they only have access to their own loan products and cannot compare rates from multiple sources.
Ultimately, the choice between a mortgage broker and a bank will depend on your individual needs, preferences, and circumstances. You may find that a mortgage broker provides the best options, while others may prefer the convenience and stability of working with a bank.
How do mortgage brokers take their fees?
Mortgage brokers in the UK usually get their fees in one of two ways:
1- Commission-based fees: Many mortgage brokers in the UK earn their fees by receiving a commission from the lender for each mortgage they successfully arrange. The commission is typically a percentage of the loan amount and can range from 0.3% to 1.5% or more, depending on the lender and the type of mortgage product. This commission is paid to the broker as a one-time fee, usually at the time of closing the mortgage loan.
2- Fee-based fees: Other mortgage brokers in the UK also offer fee-based services, where the client pays a fee for their services. The fee can be a fixed amount, a percentage of the loan amount, or a combination of both. The fee-based fee structure is usually more transparent, as the client knows exactly what they will be paying for the broker’s services.
It’s important to note that mortgage brokers in the UK are required by law to disclose their fees to clients and to provide a written quote before any work begins. Clients should also be aware that some mortgage brokers offer both commission-based and fee-based services, and that the fee structure can vary from one broker to another.
On the flip side of that, banks in the UK also typically charge a fee for arranging a mortgage. This fee is often referred to as an “arrangement fee” and is charged by the lender to cover the costs of setting up the mortgage.
The amount can vary widely depending on the lender and the type of mortgage product being offered, but it is usually a percentage of the total loan amount. It’s important to consider this fee as part of the overall cost of the mortgage, as well as the interest rate and any other charges that may apply.
Work with the Online Mortgage Guru as your mortgage broker
You now know some of the benefits of working with a mortgage broker. So what’s it like to work with us?
The Online Mortgage Guru is founded on the principle of providing the right advice for everyone, the first time.
We believe everyone deserves the right information and options based on their personal circumstances so they have the best chance at getting a mortgage approved the first time. No one person is the same, which is why we understand the need to provide you with a broker who recognises your individual circumstances and works with whole of market lenders.
A mortgage is one of the biggest financial decisions you will make. But at the end of the day, you don’t want a mortgage, you want a home.
The Online Mortgage Guru has over 15 years of experience in the mortgage sector. We believe there is a solution for everyone even under the toughest of circumstances, which is why we work with brokers who really understand the market and look beyond the tick boxes.
We offer a free service which is free because we work on a success-based model. It means that we’re invested in finding the right mortgage broker for you. Provided that your broker gets you an approved mortgage, we get paid by them, we don’t ask anything of our customers.
Contact us today at Online Mortgage Guru on 0345 3669799 or email us via email@example.com and we will put you in touch with a suitable specialist to handle your enquiry with no obligation.