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Balanced with integrity, experience & trust
Why use a Mortgage Broker?
This is a Great Question,
and one we are often asked.
Naturally We are Biased on this subject and we think you should use a broker. However because we are biased on this subject, we give below the answer an AI program gave us, supported with some facts and examples in the next pages so you can draw your own conclusions.
So, what did AI say:
There are several benefits of using a mortgage broker in the UK:
1. Access to a wide range of lenders: Mortgage brokers have access to a large panel of lenders, including banks, building societies, and specialist lenders. This means they can search the market to find the most suitable mortgage options for your specific needs and circumstances.
2. Expert advice: Mortgage brokers are knowledgeable about the mortgage market and can provide expert advice tailored to your individual situation. They can help you understand the different types of mortgages available, explain the pros and cons of each option, and guide you through the entire mortgage application process.
3. Time-saving: Searching for the right mortgage deal can be time-consuming and overwhelming. Mortgage brokers can save you time by doing the research and paperwork on your behalf. They have the expertise to quickly identify suitable mortgage
4. Increased chances of approval: Mortgage brokers have a good understanding of lenders' criteria and can match you with the most suitable lenders based on your financial circumstances. This can increase your chances of getting approved for a mortgage, especially if you have a complex financial situation or a less-than-perfect credit history.
5. Cost-effective: While mortgage brokers charge a fee for their services, they can often save you money in the long run. By comparing mortgage deals from different lenders, they can help you find the most competitive interest rates and favourable terms, potentially saving you thousands of pounds over the life of your mortgage.
6. Support throughout the process: Mortgage brokers provide ongoing support from the initial consultation to the completion of your mortgage application. They can help you navigate any challenges or issues that may arise during the process, ensuring a smoother experience.
Overall, using a mortgage broker can provide you with access to a wider range of mortgage options, expert advice, time-saving benefits, increased chances of approval, potential cost savings, and ongoing support throughout the mortgage application process
Some information about Brokers & how they can support you:
A whole of Market Independent mortgage broker will be able to access deals offered by many lenders, usually in excess of 80+ lenders and many thousands of different products.
A quick product search by Balanced Financial Services Ltd on 12 September 2023 shows the below product options (products are individual mortgage deals available with different fee/rate combinations from the various lenders)
First Time Buyers: 9,924 Products
Home Movers: 10,109 products
Remortgages:11,873 Products
What's the difference between a Mortgage 'Broker' & a Mortgage 'Adviser'?
There is no definitive, official answer and many interchange the two terms so we will share our opinion on the matter:
An ADVISER is a person who works normally for one lender or a small panel of lenders. Their job is to advise on mortgages, not necessarily to ‘broker’ a deal between the client and the most suitable lenders. So, you might have a mortgage adviser in your local bank branch, but that adviser can only advise you on that bank’s mortgages, not any other bank or lenders.
A BROKER will give you advice on mortgages, just like an adviser, but they will also be able to 'broker' a deal between you and a much wider number of lenders, usually including most of the high street banks, challenger banks, lesser-known lenders and building societies. In addition, many who consider themselves Brokers rather than advisers, will actively look to problem solve and find solutions that may have been outside your initial expectations. A broker is also likely to seek and discuss alternative options that you may not have considered or thought were available to you.
Here are some examples of the financial benefits of using a broker in cash terms:
Figures correct as at 11 September 2023
Example1:
Applicant 1bankswithaHighStreet Bank with Blue logos. They go to their own bank for a mortgage. Looking to purchase a £350,000 home with a 15% deposit.
Their Bank offers a deal with a total cost of £75,675 over the 5 years of a fixed interest rate deal.
A broker will have been able to access that same deal, but they are also able to access a deal with a different, well-known lender with a total cost over the first 5 years of £73,885 representing a saving of over the five years. £1,790.00
Reduce this by the cost of the Broker fee which in our case will have been £349.00 and the total saving for this applicant using a broker will be £1,441.00 in cash savings over the initial 5 years of the deal, and they get all the support of the broker throughout the process to boot.
Example 2:
Applicant 1 banks with a High Street Bank with Red logos. They go to their own bank for a mortgage. Looking to purchase a £225,000 home with a 10% deposit.
Their Bank offers a deal with a total cost of £53,832 over the 5 years of a fixed interest rate deal.
As above, the broker will likely have been able to access that same deal, but they are also able to access a deal with a different, well known Highstreet lender with a total cost over the first 5 years of £50,890 representing a saving over the five years of £2,942.
Reduce this by the cost of the Broker fee which in our case will have been £349.00 and the total saving for this applicant using a broker will be £2,593 in cash savings over the initial 5 years of the deal, and they get all the support of the broker throughout the process.
Its not just about cash savings either, Brokers can help in other ways too:
Actual BFS Case Studies:
Case 1
Applicant had been told by their bank they could not have a mortgage (ever) due to a historic life event.
This Bank adviser was NOT wrong in so much as they could only advise based on that single banks criteria.
However, as the adviser was not able to comment on 80+ other lenders criteria the client was not aware other lenders would consider the application.
After years of renting and with the help of Balanced, this long-term renter is now a happy homeowner benefitting from normal, Highstreet mortgage rates
Case 2
Applicant had been to their own bank with a set figure in mind they needed to borrow. Their Bank was happy to lend to them but a significantly lower amount. The applicant felt that they needed a Broker to help them find a lender who would lend the higher loan needed to purchase the dream home.
Balanced were able to secure the required loan, with the applicant's OWN bank (who had previously said they couldn’t borrow enough).
Again, the Bank Adviser was NOT wrong. Their job is not to ‘broker a deal’ or develop a solution. Balanced used their in-depth knowledge of the lenders criteria to ‘ADJUST' the application to meet the criteria required for the higher lending.
The Final Word....
We genuinely do think you should use a Broker. Of course, we would prefer that you choose Balanced as your Broker, but if you don’t want to work with us that’s ok. We would still urge you to have a look at/download the ‘HOW TO CHOOSE THE RIGHT BROKER’ guide.