What Is A Mortgage Broker And Do You Need One?

Brokers in any industry can be a force for good and can help you find anything from financial products and services to new cars and even business products like phone systems and VoIP solutions (find out more) should a business or individual need it.

Working with a mortgage broker could save you time and money by offering their expert knowledge and services; however, depending on your particular circumstances they may not always be the appropriate choice.

What is a mortgage broker?

A mortgage broker is someone who specialises in mortgages and can offer impartial advice to those looking for a mortgage. Thanks to their expert knowledge, they can help compare and contrast different mortgage products based on your specific financial circumstances and save you the time and energy of comparing different options.

What do mortgage brokers do?

Mortgage brokers match borrowers with mortgage providers to find the best mortgage product and rates to suit the specific needs of the borrower. They are responsible for finding the most competitive rates and best loan terms.

Samuel Davies of Kallyss.com explains: “Using a broker for loans, mortgages and other financial products can help you find the best deal around. However you should always remember that you will have to pay some form of brokerage fee in most cases, so you should always take that cost into consideration before you apply.”

Working with a mortgage broker can help you determine the size of mortgage you are able to apply for. Not only that, but mortgage brokers can help you identify the mortgage providers who are more likely to approve your application – this can save you from rejection and could protect you from a hit to your credit score.

The mortgage broker does not provide the funds for the mortgage; instead, they act as a go-between for the borrower and the mortgage provider. Their role is to make the best match between lender and client.

Why might you want to work with a mortgage broker?

There are many reasons why you may choose to work with a mortgage broker.

• Expert knowledge – mortgage brokers offer expert knowledge meaning that they can be especially helpful for those who lack market knowledge. The housing market can be daunting, especially for first-time buyers or those with specific financial circumstances such as bad credit history. Working with a mortgage broker can help to make the process more simple for borrowers.
• Best rates – mortgage brokers look for the most competitive rates including mortgage interest rates and associated fees.This means that they can potentially save you a lot of money in the long run.
• Range of products – mortgage brokers, unlike individual banks or lenders, have access to a range of different mortgage products so have a bigger pool of available products to choose from. When working with a particular bank, you are limited only to the options that they offer.
• Saving time – working with a mortgage broker can save you a great deal of time as they do all the research for you. Rather than shopping around to compare and contrast different mortgage types and lenders, brokers can directly match you to a provider and product that is most appropriate.

Are there any reasons I shouldn’t work with a mortgage broker?

• Unavailable products – although mortgage brokers can offer multiple products from a range of different lenders, there may be certain products that are unavailable to them. For example, there may be products and rates that are exclusive to certain banks which are therefore unobtainable for mortgage brokers.

• Paid service – depending on which mortgage broker you choose, the borrower may pay for the cost of service. This will vary between brokers with some broker fees covered by the lender and some for whom the cost of the broker will be absorbed by the borrower.
• Conflict of interest – in certain cases, there may be a conflict of interest. If mortgage brokers are being paid commission by the mortgage providers, they may be more inclined to push their products, despite not necessarily being in the client’s best interest.