Mortgage Brokers

Purchasing a house and processing a mortgage is an incredibly expensive process, and to make matters worse, the mortgage process itself is relatively complicated and therefore very difficult of the majority of customers to understand. This obviously puts them at a considerable disadvantage when it comes to locating the best mortgage plan for them, amidst the thousands of mortgage plans which are currently flooding this sector of the financial market. However, many customers find that mortgage brokers offer a near indispensable service, when it comes to arranging their mortgage with the mortgage lender.

In short, a mortgage broker is a form of financial consultant, offering an intermediary service between the borrower and the lender. They are often referred to as ‘mortgage arranger’, a ‘mortgage advisor’ or sometimes a ‘mortgage consultant’; however, the service that they offer is the same- a mortgage broker will help the borrower not only to better understand the mortgage process but also will advise them of common misunderstandings or mistakes made by customers, and of the mortgage companies that are currently offering the most attractive mortgage loan plans, and most importantly those which will be most suitable for the customer as an individual. A mortgage advisor has valuable experience and a professional understanding of the entire mortgage market and for this reason their advice can only be seen positively. To provide more reassurance to the customer, it is common practice for all mortgage brokers to be regulated by the Financial Services Authority (FSA), meaning that they have to adhere to certain codes of practice and regulations.

In order to establish the mortgage plan, which is most suitable for the customer, a mortgage broker will usually ask for a financial assessment to be carried out. For this, the customer must be able to provide evidence of their income and other financial assets. With this information, they are in a position to advise you more accurately and hopefully lead you towards the ‘perfect’ mortgage plan for you. The majority of mortgage brokerage companies will offer this advisory stage of their service free of charge, and it is only if the customer finally opts to arrange their mortgage through the brokerage company, that they will be asked to pay for the service of the mortgage broker. This payment is known as a ‘brokerage fee’, and although some firms will choose to apply a flat rate administration fee to their customers, in general, the way in which the brokerage fee is calculated varies greatly within the industry. For example, some companies may choose to impose a fee, which is equivalent to a certain percentage of the customers monthly mortgage repayments.

Mortgage brokerage companies are often the most ‘consumer friendly’ means through which to source mortgage advise, since they are rarely affiliated to one particular mortgage lending company, and are therefore in the position to offer much more objective and unbiased advice. The mortgage brokers service also reduces the work that is often left to the customer themselves- spending vast amounts of time researching and comparing mortgage plans. Since mortgage brokers are themselves considered to be financial professionals, with expert knowledge and understanding, this can often mean that the mortgage lending companies themselves are more willing to adapt their terms and conditions or it may mean that the mortgage application process can be completed much more efficiently, all of which can only be to the benefit of the borrower.