Mortgage broker or direct deal?
Thu 27 May 2021
With so many mortgage deals and types of mortgages on the market available, how can you ensure you find the right one for you?
You could decide to go direct, searching the market yourself and approaching a lender directly for a specific mortgage deal. Lenders may provide advice, but only on the products they offer. Going direct could save you money as you’re not charged fees that some brokers charge for mortgage advice, but only if you know what mortgage is best for you. You could arrange a new mortgage with your existing bank or building society, but you could be limited solely to their own mortgage products, significantly restricting the deals available to you.
What is a mortgage broker?
A mortgage broker is a person or company that arranges a mortgage between you (the borrower) and a mortgage lender.
- Help you assess your financial situation
- Search the market to find deals that match your criteria
- Recommend the most suitable mortgage for your needs
- Convenience - if you’re not sure what you’re looking for and aren’t clear on the mortgage markets, or just don’t have the time to search for deals and speak to lenders, then a broker can be very useful. They could save you a considerable amount of time.
- Access – mortgage brokers will usually have access to a wide range of lenders, with deals that aren’t always available if you go direct. This means they have a wider choice of options to recommend from.
- Expertise – if you’re not familiar with the different types of mortgages available, knowing where to start can be overwhelming. For such an important financial decision, having an expert who can provide impartial advice and explain things, will make the whole process clearer.
- Cost - mortgage brokers receive commission from the lender, some charge a fee for their services. This can be charged an hourly or 'flat fee' basis and can either be charged up front or on completion of your mortgage.
- Limitations – not all brokers have access to the whole mortgage market, some only use certain lenders. Not all mortgage deals offered by banks and building societies are available through brokers.
- Quality - Getting a mortgage is one of the biggest financial decisions you’ll make, so it’s important to make sure you choose a broker carefully and get recommendations
There are three different classes of mortgage brokers they are:
- Tied mortgage brokers - offer mortgage products available from a single lender
- Multi-tied mortgage brokers - offer access to products from a select panel of lenders
- Whole of market brokers - offer access to the largest range of mortgage products available on the market.
Here at Police Mutual, we introduce customers to a Fee-Free Mortgage Advice Service, provided by Tenet Mortgage Solutions Limited. Like most brokers, they get paid by the lender when your mortgage completes. The good news is that unlike others, they don’t charge you a fee on top of this for the advice. Even better they provide:
- Independent access to the mortgage market
- Personal review with one of their advisors
- Hassle-free service
PMGI Limited, trading as Police Mutual acts as an intermediary for the purposes of introducing its customers to Tenet Mortgage Solutions Limited, part of Tenet. You will not receive advice or any recommendation from Police Mutual. Such services will be provided by Tenet Mortgage Solutions Limited. Tenet Mortgage Solutions Limited will provide Police Mutual with information about the services you have received.
A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage. You may have to pay an early repayment charge to your existing lender if you remortgage.
PMGI Limited, trading as Police Mutual is authorised and regulated by the Financial Conduct Authority. Financial Services Register No.114942. Registered in England & Wales No. 1073408. Registered office: 55 Gracechurch Street, London, EC3V 0RL.
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Type of article: Articles
Category: Owning a house
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