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What does a Mortgage Broker do?

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Mika, Staff Writer

Monday, 22nd February 2021

A mortgage broker is someone who works independently to arrange a mortgage between the person buying the property and the lender. 

Your chosen professional will gain an understanding of your circumstances, and relate this directly to the lender’s criteria to get you the best deal. A mortgage broker will also liaise with the solicitors, estate agents, and all other parties relating to the transaction, to get your mortgage arranged as quickly and efficiently as possible. 

Mortgage Broker vs Mortgage Lender

  • When you are looking to get a mortgage you can either go directly to the lender or consult a mortgage broker. If you go to the lender (i.e a bank) you’ll have a longer appointment to discuss your financial situation, regardless of whether you’re able to get a mortgage or not. 

  • However, a mortgage broker will instead hold a strategy call to quickly ascertain whether you have a chance of getting a mortgage. If the outcome is good, then the mortgage broker will move onto the next step of comparing different mortgages that are available to you. If you’re not in a good position to get a mortgage, the mortgage broker will outline some steps you need to take to improve your situation.  

  • When going through a traditional lender, it can take a lot of time to individually approach each lender, with the average appointment lasting 2 hours or more. But with a mortgage broker, they have access to hundreds of different products that they can offer you, allowing you to compare mortgages from all lenders with ease. 

  • Also, a mortgage broker may have ‘broker only’ deals, which may mean they can offer you a better rate on your mortgage versus going to the same lender directly. 

How much does a Mortgage Broker cost?

A mortgage broker will charge a fee of between 0.3% and 1% of the total loan you take out. Some may also charge a fixed fee, and in other situations, a mortgage broker will recover their fee from the lender at no cost to you. 

Their pricing structure will be explained to you before you go ahead so that the process will be kept transparent. 

While it may cost money to use a mortgage broker, the advantage is that they work to save you as much money as possible on your mortgage repayments. So, in a similar way to hiring an accountant instead of doing your tax return - you may end up saving thousands by using a mortgage broker. 

Should you use a Mortgage Broker?

Whether you choose to get advice from a lender or mortgage advisor, you must do so. That’s because you could end up on the wrong mortgage which would be very costly in the long run. Plus, you may be rejected by your chosen lender if you don’t understand the restrictions or what circumstances the mortgage was intended for.

The main difference with a mortgage broker is they essentially cut to the chase on your behalf. They will do the legwork and compare countless different mortgage options. The alternative would be going to each mortgage lender individually, which could significantly slow down the process of getting a mortgage. 

To sum up

When you go to get a mortgage, you can either approach the lender directly or use a mortgage broker. If you are short on time but equally don’t want to compromise on the options available to you, then a mortgage broker can help. As mortgage brokers spend time accessing mortgages across all lenders instead of only one as an individual lender would, they can use this expertise to get you the right deal for your circumstances. 

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