- 03
- Jan
If you are considering taking out a mortgage then it is important to be armed with as much information as you can possibly get. Since buying a house is more than likely the biggest financial investment you are going to make in your life then understanding what offers are available to you could end up saving you hundreds over the lifetime of the plan.
Educate yourself on how a mortgage works and do some research before approaching a broker for advice. If you have already got a mortgage you should use this as your benchmark or find out the best offer you can possibly get and then approach a broker.
Getting a mortgage over the internet is slightly risky if you are not completely up to date with all the deals so using a broker can be a far safer option.
Finding the right broker for you is important and a good way of judging a broker is by asking two simple questions; Firstly, do they cover the whole of the UK market? Not all brokers are ‘whole of market’ and if they are not then it would be advisable not to use them.
Secondly ask the broker how they make their money. Brokers typically have two ways of making money. The first way is through commission in which lenders pay the broker a procurement fee which is usually a percentage of the loan‘s value. The other way brokers can make their money is by charging a fee directly to you. Never pay more than 1.5% for a fee even if you have a bad credit rating. While fees can be charged at any stage of the process, the later the charge the better.
The best answer you can hope for is if the broker only earns commission and charges no fee and is also whole of market. This way you can be sure that the broker is giving you the best advice available since they are able to assess the whole home loans market. Also the only charge you will be paying is a percentage commission and not a fee on top of that.
