Why use a mortgage broker?
A mortgage broker, or adviser, is someone who will review the mortgages available to you based on your personal financial situation and apply for one on your behalf.
They can save you time by telling you which lenders are likely to accept you and how to improve your application, and can speed up the application by dealing with paperwork on your behalf.
How to find a good mortgage broker
1. Look for a whole-of-market broker
There are several things you should consider when choosing a mortgage adviser. One of the most important is whether they are whole-of-market.
Some mortgage advisers and brokers will only recommend mortgages that are available from a select 'panel' of lenders. Meanwhile, if you speak to an adviser based in a bank or building society, they will only tell you about their own product range.
A whole-of-market broker should have access to all of the mortgages on the market before making a recommendation to you. This could potentially save you money, as they should be able to recommend the cheapest-possible option for you.
2. Ask about direct-only mortgages
While many mortgages are only available via brokers, some are only available if you apply directly, without a broker. These are known as 'direct-only' mortgages.
Brokers have no obligation to inform you of these deals. However, it's worth asking your mortgage broker if they will advise you, after they have searched the whole of the market, of any direct deals you could get by approaching a lender yourself.
In addition to speaking with a broker, you may wish to do some of your own research to see what deals are available on the market.
- Which? Mortgage Advisers is a whole-of-market broker that will also advise you whether there are any direct deals you could get by approaching a lender yourself. Call 0800 197 8461 for a free consultation.
3. Consider which type of broker to use
While most mortgage brokers work with customers in person or over the phone, there's now a growing number of robo mortgage advisers - web-based services which allow you to carry out some or all of the mortgage application process online.
There are pros and cons to this approach. Our guide to online mortgage brokers explores how some of the best-known companies work and helps you work out whether using one could be right for you.
4. Follow the tips in our video
In this short video, the experts at Which? Mortgage Advisers explain what you should look for when choosing a mortgage broker. The video includes questions you should ask your broker before agreeing to use them to find a mortgage.
Mortgage broker fees and commission
Mortgage brokers charge for their service in different ways. Some will charge you a fee, which will either be a flat rate or a percentage based on the amount you want to borrow, while others sometimes offer mortgage-broking for free.
It's normal for brokers to also receive a commission payment from the lender after they arrange your mortgage.
All mortgage brokers have a responsibility to clearly outline these charges and any fees or commission they receive from a lender prior to entering into a contract to act on your behalf.
Ask your mortgage broker to provide you with the costs of their service before making an agreement with them.
How does Which? Mortgage Advisers work?
Which? Mortgage Advisers is a whole-of-market mortgage broker which will look at every deal on the market and recommend the best one for your personal circumstances. If the cheapest deal for you is one you can only get by applying yourself, without a mortgage broker (a 'direct-only deal'), we will tell you.
You can have a free consultation with Which? Mortgage Advisers, then if you decide to take out a mortgage using the service you'll pay £499 in two parts. When Which? Mortgage Advisers submits your application to the lender, you'll pay £299; then, once your mortgage has completed, you'll pay a further £200.
If you're a Which? member (excluding trial or temporary memberships) you'll receive a £100 discount on the completion fee, but you must be a full member when you first contact Which? Mortgage Advisers to qualify.
Which? Mortgage Advisers also receives a commission from the lender upon completion of the mortgage.
Key questions to ask a mortgage broker
- Are you whole-of-market?
- Will you also advise on mortgages that are only available directly from lenders?
- What are your fees and charges?
- How are you paid?
- What is included in the service you offer? For example, will you take responsibility for all the admin and chasing lenders?
- When will you be available - are you available to talk to during evenings or weekends?
Your rights when using a mortgage broker
You should always check that your broker is authorised to give mortgage advice by consulting the the Financial Services Register.
They should do the following before you apply for a mortgage:
- thoroughly explore your circumstances
- explain what different deals and types of mortgage there are
- advise you on which ones they feel meet your needs
- be able to give you good, clear reasons why they're recommending a particular mortgage deal.
If you think you've received bad advice, you can make a formal complaint. First, go to the firm that advised you to see if it can offer a solution to the problem. If it's unable to resolve your complaint satisfactorily within eight weeks from the date you complain, take your complaint to the Financial Ombudsman Service (0800 023 4567).
Know your rights: I think I've been mis-sold my mortgage, what can I do? – read our consumer rights guide