When searching for a mortgage, you will be faced with the decision of whether or not to use a mortgage broker. There are advantages and disadvantages to using a mortgage broker instead of applying for a mortgage directly with a lender.
One of the main advantages is that independent mortgage brokers have access to, and knowledge of, the entire mortgage market. Mortgage brokers are able to advise which lenders will consider your case and which lenders will not based on your individual circumstances.
Mortgage brokers are also adept at sourcing mortgages for people with poor credit ratings. They will have access to many lenders who specialize in lending to people with adverse credit. If you are in this situation, you may find it futile to apply for a mortgage directly through a mainstream bank.
Another advantage of using a mortgage broker is that they will take care of a lot of the paperwork and chasing up of the lender for you. This can save you precious time and reduce stress. Mortgage brokers will often have points of contact with the various lenders they put business through. This can help improve the efficiency with which your mortgage case is dealt with.
Mortgage brokers can also have access to exclusive deals not available on the open market. This is a major advantage of using a mortgage broker as exclusive deals can be quite favourable to the borrower.
Sometimes mortgage brokers are able to negotiate a better interest rate or lower application fees from the lender. This is rare, but it is not unheard of, particularly where a broker has a strong relationship with a particular lender.
While there are many advantages to using a mortgage broker, there are some disadvantages.
One of these includes the tendency for some unscrupulous brokers to show bias towards lenders that provide them with higher fees and commissions instead of recommending the most appropriate product for the borrower.
Also, the broker may not be as highly trained and experienced as you are lead to believe. While there are exam and training requirements, some mortgage brokers are simply not very good at their job.
Additionally, not all brokers have access to a full panel of lenders, meaning that they may not be able to source mortgages from the entire market.
Finally, some brokers charge hefty fees to their clients, particularly for difficult cases, usually relating to adverse credit. The fees can be costly and may be a deterrent to using a mortgage broker.
Whether or not to employ the services of a mortgage broker is a matter of personal preference.