A mortgage broker helps to reduce mortgage payments for first-time buyers, those with bad credit and people that simply aren’t clued-up financially. Mortgage brokers are able to trawl the entire mortgage market to identify the best mortgage deal. Mortgage brokers charge a mortgage fee of about 1% of the loan value, but the service offered can make the difference between acceptance and rejection.
Tied Agent Vs Independent Mortgage Broker
Many people make the assumption that the mortgage broker at their bank is independent when this normally isn’t the case. Most mortgage brokers that work for retail banks are tied agents. This means that they are only able to offer the products provided by that bank and nothing else. A mortgage broker that is a tied agent provides only a restricted mortgage comparison service.
It may cost more, but always utilise the services of an independent mortgage broker. They will be able to trawl the entire market and find the mortgage deal that will reduce mortgage costs by the most. A mortgage broker will also advise a first-time buyer or someone seeking a remortgage whether a discounted mortgage, fixed-rate mortgage or tracker mortgage is best for them.
Finding a Trustworthy Independent Mortgage Broker
Talk to friends, family and use forums to help identify a quality independent mortgage broker. The majority of mortgage brokers are excellent and have saved their clients hundreds of millions of pounds. It is, however, always necessary to be aware that there are bad mortgage brokers.
Just as a good mortgage broker can save someone money, a bad one can be detrimental. There are a number of instances where good credit customers have been sold bad credit mortgages. The allure of commission is normally the reason why this happens.
The Loan Company were fined £31,500 by the Financial Services Authority for giving inconsistent information to clients and not properly checking that monthly repayments could be afforded. Next Generation Mortgages were fined £10,500 for not explaining the risks of subprime mortgages to clients.
Utilising the services of an independent mortgage broker can be of considerable benefit to first time buyers, busy professionals and those with bad credit. Borrowers that have good credit or who understand the remortgage market may wish to use an online comparison service to reduce mortgage payments and minimise mortgage fees.