When considering what value a mortgage broker adds, the simplest conclusion you may draw is that they find the best mortgage deal?
If it were that simple, you wouldn’t need mortgage brokers and would be content with the cute little Meerkats or the guy with the dodgy tash. The reality is that it’s is more complicated than that.
The points below outline some key areas which highlight what value a mortgage broker adds and why you may want a mortgage broker on your side:
Working for you not the bank
It may be obvious but it is worth pointing out. You are a ‘customer’ of a bank, but a ‘client’ of a broker. If you do your own research, then talk to a bank about the deals they are offering, they won’t say – actually, a new deal just got released next door, best you take that. A broker does.
Moreover, the broker takes the advice risk which is no small thing these days. They put their neck on the line to give you the best advice and advise you correctly, in the hope you come back again and again, and refer people onto them.
It’s literally a 180 degree experience for you the consumer to be taken care of like a client, compared with being being handled simply as a customer, or even viewed just as a transaction. But you will decide what is best for you.
Taking your personal goals into account
What is your goal when you take out a mortgage?
Generally it is to pay the bloody thing off! Mortgage brokers well know that no-one wants a mortgage, but people do want the house. But the majority of us are not in a position to buy our first few properties in cash! So a mortgage broker works with you through the lifecycle of the loan to ensure you get the best possible outcome, which is paying the loan off as quickly and efficiently as possible, which saves you tens of thousands of pounds over the life of the loan.
Taking a wider view on pricing
If you talk to a bank, or even an inexperienced mortgage broker, you simply get offered a binary choice on products – fixing for 2 or 5 years? – while going into the mechanics of what drives interest rates is a huge topic in itself (see here for one we prepared earlier), just at a high level, a good mortgage broker will look at trends in money markets and wider macroeconomic data before advising a client. There are well over 10,000 mortgage products for a reason. It is not a one size fits all policy or a choice between two basic choices. You may well end up with a 2 or 5 year fixed rate, but other options are available and should be considered.
Taking ALL the costs into consideration
The headline rate on a mortgage is one thing, but all the associated fees (some obvious, some not) are crucial to factor. A low payment is all well and good, but for some, having a large fee attached to the loan doesn’t make financial sense (and is often added to the loan which erodes equity!). So care needs to be taken on the overall cost of the loan during the initial period, as that is the only way you can truly compare apples with apples in the mortgage world.
A reality of the mortgage world is that it is a distribution driven model. Any good broker worth their salt should have a large distribution partner by their side (and please do dig into the detail of this, as many brokers who claim they are ‘whole of market’ may only advise from as little as 8-16 lenders). Brokers accounted for nearly 80% of all new mortgages pre-Covid, and close to 100% during lockdown! As a result, the best deals go to brokers and that even includes you switching your rate with your own bank! If you aren’t talking to a good broker, you simply do not have all the options available and may miss out on the cheapest deals available to you.
Not only do good mortgage brokers find the most suitable deal, they will also look to protect their clients and their families if anything bad happens. Sadly people do get sick, die, or lose their income for various reasons. There is little point doing all the work above if you don’t then protect your clients and their home! Lenders (and some brokers for that matter) have limited or no ability to help you in this area. That is crazy as you deserve to be advised better than that.
Oh, and we of course find the “Best” rate 😉
Naturally we think we are the people to talk to, which our Google reviews would also suggest as well. Our clients have experienced the value a mortgage broker adds.
There is never any cost speaking to one of our advisers so if it is your first time talking to a broker, or you simply want a second opinion on what you have already been recommended, we are here, ready and willing to help. Our goal is to assist as many people as possible manage their debt effectively to save them as much money as possible.