More than half of all people who need a mortgage use a broker to set it up. But how do you start looking for one? How do their services work, and should you pay for them?
#1 There are literally tens of thousands of mortgage brokers in the UK. There will be a wide range of mortgage brokers, from big companies that work all over the country to small ones that only work in their own area.
To get your attention, these different companies may use all kinds of advertising channels, such as the internet, newspapers, magazines, radio, TV, and the yellow pages.
If you'd rather use a local broker, Independent Financial Promotions can give you a list of three financial advisors in your area (IFAP) You can also look through the many online directories of mortgage brokers to find the right one for you.
#2: If you work with a mortgage broker, make sure you find out if they are licenced by the Financial Services Authority, either directly or as an appointed representative/principal of another company. On the FSA website, fsa.gov.uk, you can find a list of regulated brokers.
#3: Many mortgage brokers have access to thousands of different lenders and products, which can be very helpful when shopping around. The goal of all mortgage brokers should be to search the market for the best deal for you. Be careful, though, because not every mortgage broker is as honest as the next. Make sure you do your research.
If you want to know which lenders are on a mortgage broker's panel, all you have to do is ask them. Brokers can either charge you a flat fee for their services or do the work for free in exchange for a commission from the lender. They can also do both. They have to tell everyone about the commission they get, including how much it is if it's more than $250.
#4: The Financial Services Authority is in charge of regulating advice about mortgages. People who give advice about mortgages must be trained to do so.
#5: If you want advice on other financial products, like pensions, investments, or insurance, keep in mind that these areas are also regulated by the FSA, and your mortgage adviser may not be qualified to give advice on these areas. Unlike mortgages, advisers who deal with investment products must either be tied to one provider or be independent financial advisers who can look at the whole market.
#6: The mortgage business is full of confusing words you might not have heard before. Don't be afraid to ask questions. If you aren't sure what you're getting into or agreeing to, it is very important that your broker or lender tells you everything you need to know. A mortgage is a big commitment, so you should make sure you know everything that comes with it.
#7 Getting help from a mortgage broker can be good for the borrower in many ways. If you need a special kind of mortgage, a broker may be able to find you a lender who doesn't work directly with the public. If your credit history isn't perfect, it might be harder to get a mortgage through the usual channels if you want one.
#8: If you're a first-time buyer, even if your needs are simple, the idea of using a mortgage broker can be very appealing. Buying a house and getting a mortgage for the first time can be scary, but if you have someone to talk to, the process will go more smoothly.
#9: When applying for a mortgage, it's important to be as honest and accurate as possible. In today's high-priced housing market, it can be tempting to lie about your income or minimise your debts and other financial obligations. If you lie on a mortgage application form about how much money you make, it is a fraud.
#10: If you have a problem with your broker or something to complain about, you and the broker need to find a solution that works for both of you. Once you've tried this and it didn't work, you can go to the Financial Ombudsman service with your complaint. Through the Ombudsman service, it may be possible to get money back from the broker in question.
