Refinancing your home is a great way of raising funds for a variety of purposes.
From everyday home improvements to major renovations to significant one-off purchases, an affordable refinance deal has limitless potential applications.
When you refinance your property, you will have the option of working directly with your current lender or talking to an independent broker. Both of which could open the door to a competitive deal but there are important benefits to broker support that should be considered.
Should I Use a Mortgage Broker to Refinance?
Where a borrower has no intention of switching to a new lender, brokers need not be involved. It is important to remember that by limiting yourself to one specific lender, you also deny yourself access to better offers from other lenders.
When you work with a broker, whole-of-market comparisons can be done on your behalf to find you an unbeatable deal,lower interest rates and exclusive one-off deals.
All of which can be negotiated by your broker on your behalf.
Comparing deals from competing lenders should only be done by those who fully understand the mortgage market and the complexities of refinancing. An online comparison site can give you a good idea of the available options, though will not tell you which the best deal is best to suit your objectives and your budget.
What Role Does a Broker Play When Remortgaging?
The role of the broker is to effectively take care of all the complexities and challenges involved in organising a competitive refinance deal on your behalf. Acting as somewhat of a ‘go between’ you and the lenders they work with, brokers take the requirements of their clients and pair them with unbeatable deals to suit their priorities and their budgets.
Most importantly, a broker can provide the independent advice you need to make the right decision to safeguard your financial future. In addition, your broker will take care of the negotiation process on your behalf, working hard to ensure that the deal you are offered is the best deal on the market.
It is also worth considering that brokers often provide access to exclusive deals and discounted rates that are not available on the High Street. Many independent lenders and refinance specialists only operate via established brokers, meaning you will not find their products or services advertised elsewhere.
How Do Mortgage Brokers Make Their Money?
All brokers have their own individual approach to fee structures and payments. Mortgage brokers do not work for free but sometimes this does not mean that you (the customer) will be required to pay a penny.
Some brokers charge their customers a set fee or a commission, based on the value of the property or the size of the loan taken out. By contrast, others exclusively charge the banks and lenders they work with, rather than the borrower.
It is important to understand the broker’s fee structure ahead of time. Request clarification of any fees and charges you may be liable for, with assurances that they will not increase at any time under any circumstances.
Can I Not Just Deal Directly with a Bank?
You can but doing so could count you out of the running for some of the best deals on the market. When you work with one specific bank, you limit yourself to its own range of products and services. More importantly, any given bank or lender cannot provide honest and impartial advice.
It is highly unlikely that a bank or lender is going to tell you that you could get a better deal elsewhere – even if this is clearly the case.
Irrespective of how satisfied you are with your current bank, it is essential to find out whether you could be better off with a new deal from a different lender. This is something your broker can help you establish, by providing you with the independent and objective advice you need to make the right decision.
If the best deal available is the deal on offer from your current bank, they will advise you to stay put. If it turns out that you could get a much better deal elsewhere, they will negotiate on your behalf.
What Questions Should I Ask My Broker Before Getting Started?
You are perfectly within your rights to ask as many questions as necessary to allay your concerns. Making sure you are working with a mortgage broker you can trust is important, which means researching their history, reputation and track record.
It is essential to ask the following questions:
- What fees do you charge?
- What kind of experience do you have?
- Do you provide access to exclusive deals?
- Why should I work with you?
- Do you have references?
- What if I change my mind along the way?
- What are the alternatives to refinancing?
Any mortgage broker that is worth working with will be more than happy to answer every question you ask, while providing references and evidence of their performance if requested.