While some are fortunate to have enough cash to buy a property outright, the vast majority of people require a mortgage to buy their homes. Mortgages, however, are tricky things: you don’t always know which product to get or who to approach for the best deal. It’s all very complicated.
Here’s where mortgage advisors can help. Mortgage brokers are essentially financial experts who help their clients select the best mortgage product for their situation. Below, we’ll discuss the different types of mortgage advisors and why you might want to consider using one.
What Are The Different Types Of Mortgage Broker?
Mortgage brokers are people who act as intermediaries between you (the borrower) and the bank or financial institution lending you money. The idea is to provide you with a representative who will help you get the best deal – after all, taking out a mortgage is a big financial commitment!
Not all mortgage advisors are the same. Here are three types that you might encounter:
Independent mortgage brokers. An independent mortgage broker is a financial professional who works with a variety of mortgage lenders. Ideally, they’ll show you all the mortgage options available to you from their lending partners and then consult with you about which is best for your particular financial circumstances. Because they’re not affiliated with any specific lender, they won’t usually try to push any particular mortgage product.
Whole-of-market mortgage broker. Whereas an independent mortgage broker works with a range of mortgage lenders, a whole-of-market mortgage broker – you guessed it – works with lenders across the entire market. The benefit of this kind of broker is that they’re often able to introduce you to smaller players or niche deals. They’re also unrestricted in who they can recommend.
Lender mortgage brokers. Finally, there are lender mortgage advisors. These brokers represent the lender (for example, the bank). They usually have an in-depth knowledge of the mortgage products that their firm offers, but do not sell mortgage products from other financial institutions.
What Is Mortgage Advisor?
A mortgage advisor is essentially the same as a mortgage broker – a financial professional who provides advice on the kind of mortgage that you should take out.
What Is The Difference Between A Mortgage Broker And A Financial Advisor?
Generally, mortgage brokers will only advise you on matters to do with mortgages, like mortgages themselves or the insurance products associated with them.
A financial advisor has a much broader role. While they can advise on mortgages, they can also talk to you about a range of other financial products, including credit cards, savings accounts, personal loans, and investments.
Why Use A Mortgage Broker?
There are two main reasons why people seek the help of a mortgage broker. The first, as discussed earlier, is to get expert assistance in choosing the right mortgage deal. Independent and whole-of-market mortgage brokers talk you through your choices and make recommendations based on your financial circumstances.
The second reason people choose to use mortgage brokers is to help them navigate the complexities of the mortgage application process. They help with things like submitting applications to mortgage lenders, ensure that the application process goes smoothly, and sort out problems with applications if something goes wrong.
Sometimes a mortgage application can fall through. Unless there’s some glaring problem with your credit score, most brokers will seek alternatives and support you in whatever way that they can to get a loan.
Should You Use A Mortgage Broker?
There’s no legal requirement to use a mortgage broker, just as there’s no legal requirement for businesses to hire accountants, but it is highly recommended. The reason is that taking out a mortgage is a sizeable financial commitment. You want to know that you’re getting a mortgage product that is right for your situation, not just one that a particular lender thinks that you should have.
Mortgage brokers also have something called a duty of care towards you. Their job is to prevent you from unknowingly or unwillingly taking out mortgage products that you later find out that you can’t afford. Your legal position is often a lot stronger if you get into financial trouble if you used a mortgage broker when taking out a mortgage. If you received bad advice, you could seek compensation.
Do You Need A Mortgage Broker?
Most people need a mortgage advisor. Mortgage brokers explain the mortgage products currently on the market and take the hassle out of the mortgage application process. Mortgage brokers help you find a competitive deal on a mortgage you can afford.
At RenewYourMortgage.co.uk, we specialise in pairing you with the ideal mortgage broker to help you find the right mortgage deal. Speak to us today to find out more.