Mortgage brokers help borrowers find the right deal for them – it’s that simple.
We’re going to spell out exactly what a broker does, how they operate, and the potential pitfalls of not using one.
So, what is a mortgage broker?
Brokers are basically a bridge between you and a lender. They help you decide on an appropriate type of mortgage and source the best deal for you.
Traditionally, this involved spending time in a stuffy office with an expert who would ask questions before going away to do their research. Now, you can use a mortgage calculator to cut this process down to minutes.
A digital broker like us can compare the relevant options from thousands of UK lenders in a jiffy. It’s a quick, reliable way of getting expert advice without feeling swamped by information.
How brokers get paid
If you’re asking “what’s in it for them?”, we don’t blame you. But it’s important to note that brokers are independent and not in a bank’s pocket.
They make money by either charging you a fee for their service, earning a commission from the lenders, or sometimes (cheekily) both.
Their fees must be declared up front. When you approach a traditional mortgage broker, you’ll usually be given a quote for their services before they get started on your case.
A service like ours is different. We won’t charge you a thing – from first consultation to securing a mortgage. We make our money by charging the lenders you choose to go with, but we’ll only ever recommend what’s best for you.
Brokers policed themselves until 2004, when the Financial Services Authority (FSA) took over. Since 2013, it’s been up to the Financial Conduct Authority (FCA) to make sure brokers play by the rules.
By law, brokers must be registered with the FCA or be part of a larger firm that is.
Regulation is important because it means you can have faith in the advice a regulated broker gives you. You can check if a broker (or the organisation they belong to) is regulated by searching the register here.
The pros and cons of a broker service
If you’re considering using a broker, here are some things to consider:
You won’t be overloaded with irrelevant information. You’ll answer questions about yourself and get relevant, personalised information back. You won’t have to deal with lenders and their vetting processes directly. You won’t waste your time applying for products you’re not suited for and are perhaps less likely to get You’ll get a broader range of options than if you went straight to a lender (which will only offer you its own products) You’ll get peace of mind that you’ve made a sensible decision based the advice of a regulated expert. The bad
Traditional brokers will ask you to attend in-person appointments during office hours Traditional brokers ask you to email, fax or even post them various personal documents Some brokers charge a fee for their advice, averaging at £500* - as well as potentially taking a commission from the lender for your business We’re fixing the mortgage brokerage market by offering free, regulated and expert advice online.
You won’t need to attend appointments, you can talk to us at a time that suits you and you’ll be able to upload and manage important documents from your computer or phone.
*Money Advice Service