Do I need a mortgage broker?

A good mortgage broker will scour the market to find you the best mortgage deal. But some mortgage brokers only work with a small number of lenders while others charge fees for the services. Here's what you need to know.

Angela Kerr Director, Editor

What does a mortgage broker do?

A mortgage broker, or adviser, is a qualified professional who specialises in finding the most suitable mortgage for you. They can save you time by telling you which lenders are likely to accept you and how to improve your application, and can speed up the process by dealing with some of the paperwork.

However, not all mortgage brokers are the same. Some mortgage brokers will only recommend mortgages from a select ‘panel’ of lenders while others will offer mortgages from a much wider range. For example, mortgage brokers L&C work with over 95 lenders.

If the mortgage broker you use only has access to a limited number of lenders, you may not get access to the best mortgage rates. This means you could end up paying more for your mortgage each month than you need to.

Pros and cons of using a mortgage broker

Benefits of using a mortgage broker?

Advantages of using a mortgage broker include:

• Mortgage brokers know the market well and should be up to date with the latest mortgage products and deals.
• Brokers may get access to exclusive deals not available if you go directly to the lender.
• They’ll match you to the lender that’s most likely to accept your application. This may be particularly useful if your circumstances are less straight-forward, such as if you’re looking for a self-employed mortgage.
• Mortgage brokers will offer advice and guidance throughout the process and will also act as your advocate with the mortgage lenders, making it less stressful and increasing your chances of securing a mortgage.

Cons of using a mortgage broker

• It is usual for mortgage brokers to earn commission from lenders for arranging a mortgage. However, some brokers also charge you a flat fee or a percentage of the amount you borrow. This can run into hundreds of pounds. However, you can avoid paying broker fees, by using fee-free mortgage brokers like L&C.

Who can use a mortgage broker?

Anyone getting a mortgage can use a mortgage broker, including:

• Getting a mortgage when you’re buying a house.

• When you’re remortgaging. Your broker will look at whether you’re best remortgaging with your existing lender or switching to a new one. They’ll also be able to help if you want to remortgage to release equity.
• Advice if you’re selling a house with a mortgage and buying a new home and want to find out your options.
• Mortgage advice if your earnings are less straight forward such as if you need a zero hours contract mortgage or a self-employed mortgage.
• Buy to Let mortgages: A mortgage broker can be extremely useful if you’re looking at buy to let mortgages to fund an investment property.

Looking for the cheapest mortgage rates? Speak to fee-free brokers L&C — start the process online or speak to an advisor today.

Questions to ask your mortgage broker

Here are the questions you should ask a mortgage broker:

• Which lenders do they work with?
• Will they tell you about any deals lenders may offer directly that could be cheaper?
• What their fees are? Ideally, look for ‘fee-free advice’.
• What is included in their service? Will they handle paperwork and chase lenders?
• When are they contactable – is it just office hours or evenings and weekends?

Documentation from your mortgage broker

The broker should give you an “Initial Disclosure Document” that tells you about the service they can provide, whether they can recommend all the mortgages in the market, a limited selection or just one lender’s products; whether they will give you advice or not; and what they’ll charge you for the service.

The broker will ask you all about your financial history and current circumstances. Be prepared to provide a variety of evidence of this. They will also talk to you about your monthly outgoings and how much you think you can afford. Do ask them all and any questions you have.

What should I do? Next steps

1. Research mortgages so you understand the basic types and the differences between each. Our guides on types of mortgages and mortgages made simple are a good place to start or if you need a quick refresher. If this is your first mortgage, see our guide on steps to getting your first mortgage or if you are remortgaging, you may also find our remortgaging made easy guide helpful. Although, if you find this overwhelming, you can just go straight to step 3 and a fee-free mortgage broker can explain the different types to you.

2. Use online tools like these handy calculators that show you instantly how much you may be able to borrow and how much your mortgage repayments would be.

3. Get fee-free advice from a mortgage broker: They’ll be able to speak to you in more detail about your circumstances and find the best deal for you. Plus, they’ll factor in any mortgage fees and costs to make sure you get the best deal overall.

Looking for the cheapest mortgage rates? Speak to fee-free brokers L&C — start the process online or speak to an advisor today.

Should I get a mortgage through my estate agent?

Some estate agents will offer you mortgage arrangement services. However, while you might have found the house of your dreams and got on well with your estate agent, you should not use their mortgage services without shopping around first. This is because:

• You may not get the best deal: The broker may charge a fee or may only have access to a limited number of lenders.
• Be wary of giving away your financial situation: While it’s important to be up front and honest about what you can afford, if the estate agent marketing a house persuades you to let their in-house adviser vet your finances, the agent will have a clear idea about what you can afford and may encourage the seller to push for a higher offer.

So while you may want to find what deal they could offer you, you are under no obligation to accept their mortgage offers – in fact, it is illegal for estate agents to require you to use their in-house mortgage service.

What to do if you have been given poor mortgage advice

If you believe you have been given poor advice, the first step is to complain, in writing, to the lender, financial adviser, or broker. If they do not resolve your complaint satisfactorily within eight weeks, you can take your complaint to the Financial Ombudsman Service.