Selecting a Broker
Finding the right mortgage broker is one of the most important steps in the journey towards purchasing a property.
Operating independently, established mortgage brokers can provide you with the honest, objective and impartial advice you would not get from any mainstream bank or lender.
The broker will guide you through the various types of mortgages and alternative loans available, helping you make the right choice to suit your requirements and your budget.
Key Questions to Ask Your Broker
If this is your first time working with a broker, you may find it difficult to know how to gauge their quality and capabilities. Irrespective of your requirements, we strongly recommend presenting a prospective broker with the following 10 questions:
1) Are you regulated?
Right off the bat, it is essential to ensure that your mortgage broker is regulated by the Financial Conduct Authority (FCA). Under no circumstances is it advisable to do business with a broker that is not FCA regulated, so be sure to establish this before going any further.
2) How many lenders do you work with?
As a rule of thumb, it is better to work with an independent broker that provides access to the largest possible network of lenders. That said, quality is more important than quantity. Not only should they be able to provide a long list of partner lenders, but also justify their reasons for working with these lenders.
3) How does your fee structure work?
It is the responsibility of the broker to make it as clear as possible if, and to what extent, you will be charged for the services they provide. If there is any vagueness on the part of the broker at this stage, it is time to reconsider your options. Always request a clear and concise quotation, which will not change under any circumstances.
4) What types of mortgage are available?
One of the biggest benefits of working with a mortgage broker is the access they provide to a flexible and dynamic range of financial products. Along with various types of fixed rate loans, variable loans, interest only mortgages and so on, some brokers can also set up bespoke home loans that are tailored to their clients’ individual requirements.
5) Can I repay my mortgage early?
This is an important question, as if you decide later to repay some or all of your mortgage balance early, you do not want to be unfairly penalised for doing so. Not all mortgages include fair and balanced early repayment options, so it is essential to verify this with your broker before completing your application.
6) How much can I borrow?
It is the responsibility of every reputable broker to ensure that their clients never take on more than they can comfortably handle. Your eligibility for a mortgage will be influenced heavily by how much you intend to borrow – your broker should offer as much support as you need to work out how much you can afford to borrow.
7) Will my credit score stand in my way?
While most major banks and lenders are unwilling to consider applications from subprime borrowers, independent brokers often work with specialist lenders who welcome applicants with poor credit.
8) How much deposit do I need?
Deposits are rarely optional, but there will always be some flexibility about the size of your deposit. Minimum requirements vary from 5% to around 15% but offering a larger deposit of say 30% or even 40% could pave the way for a much more competitive deal with rock-bottom overall borrowing costs. Your broker will help you make the right decision, in accordance with your financial circumstances and preferences.
9) What other fees will I be liable for?
Alongside the interest rate, there will be other fees and charges payable on your mortgage. This may include arrangement fees, valuation fees, surveys, legal fees and various other administration fees – all of which should be made clear by your broker when conducting initial affordability checks.
10) Can you provide references?
Finally, it is always reassuring to establish the reputation and track record of a broker, before taking things a step further. You are perfectly within your rights to request references if you wish to do so, which will provide insights in the broker’s performance when put to the test. Unless they are more than happy to provide all the references you need, it may be time to reconsider your options.
Book your obligation-free initial consultation with your chosen broker and take the time to ask as many questions as you feel necessary, before making your final decision.