If you have decided to look for a mortgage, you may have originally assumed you had to go to your bank. Then perhaps someone advised you that you would be better going through a mortgage broker. But you may be hesitating because you don’t know what a mortgage broker actually does.
So why should you consult a mortgage broker and what happens if you do?
The world of mortgages is very confusing nowadays, especially for the newcomer. There are literally thousands of mortgage products out there. How do you know whether you want an interest-only or a repayment mortgage, a fixed-rate, variable rate or a tracker mortgage? Plus each applicant’s situation is unique. The mortgage broker is there to look at your circumstances and help you find out what is the right mortgage for your situation.
1. When you have decided which mortgage broker you want to use, you can either go there in person, or contact them online or by e-mail or telephone. Don’t worry if you’re busy at work and don’t know how you can get the time off. Lots of clients never meet their broker in person.
2. The mortgage broker will show you an Initial Disclosure Document which explains how he/she is paid – i.e. commission only, fees only, or both. If you prefer a different method of payment, obviously you can go elsewhere at this point.
3. After this, the first thing most mortgage brokers will do is give you a questionnaire or conduct a fact-finding session. If they are going to find the right mortgage for you, they need to be clear about your exact circumstances. So it goes without saying that you absolutely MUST be honest. If your finances aren’t in the best of shape, don’t worry, they’ve heard it all before. But the broker has to know the facts of your situation.
4. The mortgage broker will scan the market to find a lender who can provide what you need. There is special software that enables the broker to input your details and bring up a match. The broker can then make a recommendation based on what you are looking for and what you can afford.
5. When a product has been selected, you will then be provided with a KFI (Key Facts Illustration or Key Features Illustration). This explains why the broker is recommending this particular product, what services they are offering and what their fee or commission will be.
6. If you are happy to go ahead, the mortgage broker can help you with your application form, if you wish. Sometimes it’s easy for a new applicant to get confused or to misunderstand what a question means. The broker can help you complete the form in a way that gives you the best chance of a favourable response.
7. The mortgage broker will then act as a “go-between”, between you and the lender, to make sure the process goes smoothly. If you are worried about time, the broker can sort out things like chasing solicitors, arranging valuations etc.
Doing it all yourself can be extremely stressful, especially if you are working full time. Using a mortgage broker can save you time and stress, and make it more likely that you will get the mortgage you want and need.
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