We think there are some really good reasons to contact a Mortgage Broker for first time buyer mortgage advice. However, you can decide to go direct to a Lender if you prefer to go it alone. This can be done via a branch or online. The good news for us is that most people use a mortgage broker but here I will explain the pros and cons of both methods.
In the favour of going direct to a Bank or Building Society, you won’t have to pay a Broker fee, so you’ll make yourself a saving there. Years ago, there may have been an element of “The Bank Manager knows my finances inside out” but all that went by the wayside when credit scoring came in. The other potential advantage is that some lenders offer exclusive mortgage products that are only available direct. They do this as they like to attract a good spread of business from consumers and Brokers alike and they can turn exclusive products on and off like a tap. Sometimes the exclusive products are available via Brokers and not the branch too.
From 2014 onwards, lenders were banned from selling mortgages on a non-advised basis when there is any customer interaction. Until then, some applicants felt they had received advice even when they hadn’t, and they weren’t able to benefit from some of the consumer protection that goes along with proper advised mortgage sales.
Lenders had to come to terms with this massive change and towards the ends of 2014 it wasn’t unusual to be kept waiting for a month or more just for an appointment. Sometimes it’s still as bad! Obviously, this is no good when you’ve just had your offer accepted on a house! These service issues led to a swing towards more applications being made via Brokers. We offer a same day mortgage service. When you call us, we try and connect you with a qualified Mortgage Advisor either immediately where possible or at least same day.
Back when I started out as a Broker in 1997, it was much more difficult to compare mortgages. Finding a competitive mortgage online now is pretty easy, the difficulty is finding a lender whose criteria and mortgage features are tailored to your circumstances. Just be aware though that the deals with the lowest rates tend to carry high arrangement fees.
Affordability is a key point too. It doesn’t matter how good a lender’s deal is if they won’t lend you enough money! Buying a house is such a big deal most people choose the Broker route.
Most mortgage applications these days aren’t simple, there are so many things that can make a case more complicated, for example, you may have:
In years gone by, lenders differentiated themselves from the competition mostly by offering a better deal than the lender next door. These days it’s different because their margins are squeezed, and they differentiate themselves on Lending Criteria.
For example, some lend more than others to Self Employed applicants or take a more sympathetic view on previous blips on your credit report.
Your situation is unique to you. When you explain your position to a mortgage broker then he or she will probably have come across similar cases in the past if they are experienced. Hopefully, they will draw from that experience to be able to recommend the most suitable mortgage for you at the lowest rate possible.
It’s not just about getting the mortgage by the way. Even if the application itself is straightforward, our clients rely on us for so much more. For example, we will discuss how much they are going to offer on the property they are buying, and I can recommend other professional services such as self employed mortgage advice, solicitors/explain the different types of survey and protection available.
Another key aspect is that Brokers tend to be far more responsive than the lenders’ direct propositions. Out of hours and weekend appointments are common-place, as are responding to clients’ emails late on an evening.
One of the overlooked factors in terms of why most applicants prefer using a Broker is that everyone is busy these days and you simply might someone to handle the full transaction for you to take the stress out of the situation. Professional applicants really see the benefits of these. They have clients of their own that they charge out their services to and they can see the reasons to have an expert onboard.
Perhaps lenders will in the future want to take back more clients from Brokers. If this does happen I think it’s fairly unlikely that they will staff-up their branch networks. More likely they will make investments in technology to transact with customers online.
That’s great for clients that are happy to do business that way, let’s say a straightforward product switch. For most people though, they enjoy having the “human touch” to their mortgage application process.