Do I need a mortgage broker?

Mortgage brokers can scour the market for you, looking for the right deal to suit your situation. They are also particularly useful if you are in an unusual position.

Who can use a mortgage broker?

Anyone getting a mortgage can use a mortgage broker. It can be particularly helpful if:

• you would like advice on mortgage options

• you rely on irregular freelance earnings

• you are raising a mortgage on a second property to pay the deposit on the first

• you need a bridging loan

What are the advantages of using a mortgage broker?

• Mortgage brokers know the market well and are aware of the latest mortgage products and deals

• They know which lenders are comfortable with unusual circumstances

• Mortgage brokers will offer advice and guidance throughout the process and will also act as your advocate with the mortgage lenders, making it less stressful

• They can also sometimes get very good deals, better than you could get going direct to the lender

What to watch out for when using a mortgage broker

Some mortgage brokers are tied to specific mortgage lenders, meaning they will only recommend their mortgages. Other brokers recommend from a limited selection of lenders. Misleadingly, they can still claim to be “whole market brokers” as long as their selection is representative of the market. This means you might miss out on great deals.

Be aware too that you might miss out on some deals because some mortgage lenders do not offer any mortgages through brokers. This includes HSBC and FirstDirect, and others like ING Direct only offer mortgages through certain brokers.  Ask for explicit confirmation of which lenders are included and which are excluded by your broker.

At some point in the process your mortgage broker will offer you contents and buildings insurance too. It is advisable that you get a quote.

Should I get a mortgage through my estate agent?

Some estate agents will offer you mortgage arrangement services. However, while you might have found the house of your dreams and got on well with your estate agent, you should not use their mortgage services without shopping around first. This is because:

• If they do not charge up front, estate agents are almost always getting some kind of commission for their mortgage services – commission that you will eventually pay for

• They are likely to have a far narrower selection of mortgages than if you look further afield

Also be aware there have been accusations of mortgage brokers and estate agents working closely together, openly discussing potential buyers’ budgets in order to get as much money out of the buyer as possible. We therefore recommend finding out what deal they can offer while remembering that you are under no obligation to accept their mortgage offers – in fact, it is illegal for them to require you to do that.

What to do if you have been given poor advice

If you believe you have been given poor advice, the first step is to complain, in writing, to the lender, financial adviser, or broker. If they do not resolve your complaint satisfactorily within eight weeks, you can take your complaint to the Financial Ombudsman Service.