A mortgage broker is an adviser who acts as an intermediary between you and the UK mortgage lenders. A broker should be able to find the most appropriate mortgage for your specific needs and circumstances and, in theory, should be able to get a better deal for you than you could on your own. However, unless the adviser is paid commission by the provider on the sale of the mortgage, you will usually incur a broker fee. It is therefore important that you feel you are receiving a level of advice that justifies this expense. Fees will vary depending on the broker that you employ, however as a Guideine you should expect to pay a charge of around £200.
He or she should be an expert in this field, and should be authorised by the FSA (the Financial Services Authority) to give advice. Also make sure that the broker you use is independent. If he or she is affiliated to a particular bank, building society or other financial institution, he or she may only search for a mortgage provided by that specific company, and will therefore not be searching hard enough or fairly enough on your behalf.
Below are some suggested 'dos and don'ts' which you may find useful when dealing with a broker:
1. Check the FSA register to ensure the adviser (either the individual or their firm) is approved - you can do this online.
2. Find out whether the broker is independent or tied to a particular mortgage lender.
3. Make a list of your mortgage needs, for example, repayment terms, flexible repayment holidays, etc.
During you meeting with the broker
1. Take notes and ask questions if there is anything you need clarifying or do not understand.
2. Ask the broker to explain why he is recommending a particular product or provider.
3. Read EVERYTHING before signing, and never sign a form that the broker is going to complete later on your behalf (you could be agreeing to something you do not want).
4. Keep a copy of your application.
1. Check all paperwork when it arrives.
2. Contact the adviser if you have any queries or questions.