Even today, after the seemingly endless changes brought about by the Mortgage Market Review, (MMR), there still seems to be a general misconception of what a mortgage broker actually does.
Brokers can tell you in seconds what the cheapest rate in the market is and, at various times, this will vary between a direct to lender product or a broker only deal, but this misses the point. Can this product actually be attained and is it the best to fit your personal circumstances? Furthermore, is the amount you want to borrow actually affordable, not just now, but if rates rise in the near future?
And what if your circumstances change? Are there any plans in the pipeline that could mean that there needs to be a degree of flexibility built in? Will one lender be more adept at dealing with this than another?
Then there is the paperwork. Making sure an application hits a lenders underwriter in the very best light, with all the documentation required to speed up the process is more important than ever.
Every day there are tales of woe from all areas of the consumer market about people who bought the cheapest products which turned out to have a sting in the tail and cost a lot more in the long run.
A good independent, professional mortgage broker provides a service that a borrower cannot obtain direct from a lender and certainly not from a comparison site, neither of which actually advise on all the best products in the market.
The key issue is around advice. For those who want to take out the biggest loan they are ever likely to have without obtaining any kind of advice then the internet is a wealth of information. However, the cheapest product does not take into account the myriad of personal requirements and future flexibilities a client may need.
Therefore 1st Time Buyers, who may need a hand to hold throughout the process, should always look to obtain proper advice.
For high net worth individuals also, the whole range of highly competitive products, (sometimes market leading), available through Private Banks, who offer a blank sheet of paper approach to underwriting, remain the preserve of the more respected broker.
For those who are generally time poor, or need to move quickly, the service a broker provides can take the pain and hassle out of the process and ensure that deadlines are met without you breaking sweat.
There are two key words here, independence and advice. An independent broker will be able to look at every product on the market as well as some that are only available through the mortgage broking market.
A lender, even though they are giving advice these days, can only talk about their own products. A mortgage is the largest commitment that most people will ever make and to do this without taking full independent advice and comparing all the other options available on the market is a risky game, especially with all the small print and fees that surround mortgage products.
A small fee paid to a broker can still save thousands of pounds over the term of a mortgage or avoid costly penalties in the future.
Service is also key. Securing the property of your dreams often means moving quickly and many larger brokers have immediate access to the decision makers, rather than having to go through the layers of process that walking into a branch often entails. This means that any potential issues can often be anticipated and the whole process smoothed.
Helping a busy client to complete the mortgage application, prepare all the documentation and liaise with the lender, valuer, estate agent and solicitor to ensure deadlines are hit is a time consuming process and this is all part of the brokers service. A good broker really is the fulcrum of every application and having a good team; broker, agent and solicitor, in place really does make a difference.
Knowing which lenders are able to proceed quickly and which ones have a paperwork backlog can be the difference to actually getting the property you want or losing out.
There is also the aftercare service, not only looking at how clients can ensure they are able to both repay the loan and protect their new home, but advising them each time their product comes up for renewal or their circumstances change mid-term.
There are not many professional services left that provide all this for a relatively modicum fee when compared to the fees of Estate Agents and Solicitors and, let us not forget, the transactional, sales approach employed by many banks.
The days of a broker simply looking down a list of products, pointing at the cheapest and pocketing the inflated commissions are thankfully long gone. As mortgage criteria toughens, professional mortgage advisers who provide genuine independent advice and a proper relationship based service are, and always will be, in demand.