Is It Best To Use A Mortgage Broker?

Question

Is It Best To Use A Mortgage Broker?

3 Answers

Answer Question

Answer 1

Sometimes the best course of action is to let the professionals get on with the job. Often they will do the job in a quarter of the time, and it usually works out cheaper in the long run.

This received wisdom holds true for finding the right mortgage. Mortgage brokers can take the stressful legwork out of finding the best mortgage. Unlike you and I, locating the best deal is a mortgage broker's meat and two veg. So when it comes to the biggest purchase of your life – a new home – it makes eminent sense to deploy the experience and knowledge of a mortgage broker.

Having access to literally thousands of mortgage deals, a mortgage broker will use their inside knowledge to zero in on the mortgage that's the best fit for your personal needs. Because of their expertise, a mortgage broker will be able to locate exactly the right mortgage faster and more efficiently than the vast majority of us would be able to do on our own. Chances are a broker will have heard of mortgage packages the average punter would never get to hear about, let alone stumble across by accident.

Answer 2

I'd also recommend working with a professional mortgage broker. They know the market better, have the needed experience and have access to more deals. They are able to save you a lot of time and give you useful advices. Still you have to make sure that your broker is licensed and bonded. The bonds are required by states to protect consumers that are in the process of obtaining mortgages.

Answer 3

It all depends if you can find a mortgage broker that is truly working on your behalf. Brokers understand the market and have access to many more deals that you could source in a shorter period of time, so it can make sense.

Many brokers work on a commission basis and as such they will suggest mortgages that are a combination of a good match for you and ones that pay them a good level of commission. They will have a good knowledge of the market and the different types of mortgage and if incentivised in the right way will do a good jobs. One good test is to ask the broker if you can pay them an hourly consultancy rate and in turn they rebate any commission they get from the lender. This will open up a conversation with the broker and you will soon be able to tell if they are really working on your behalf or theirs. Watch out for other products they may sell to you on top at the same time (life insurance, payment protection), dont be scared into making a fast uninformed decision on these.

Whatever mortgage product you end up with make sure you understand any lock in periods, change in interest rates, fees etc. As for most people a mortgage is the biggest loan they will ever have so it's only prudent to spend some time to understand what you are buying. When buying a car we try and ensure we get the right car at the right price, take the same approach with your mortgage as its a much bigger deal.

Choosing a Broker
Personal recommendations are always the number one route, friends, family, co-workers will able to point you in the right direction. When meeting a broker don't be afraid to ask for testimonials from their clients, and ask about their methodology in matching your needs to a certain product.