Buying a property can be pretty stressful particularly if it is your first purchase. Most people need a mortgage loan secured on the property and finding the right lender can be a real challenge. Once you have chosen your mortgage lender then there is paperwork to complete and the payment of your deposit.
Should you use an Independent Mortgage Broker?
These days there are many different lenders offering many different mortgage loans. You can spend a great deal of time online and calling lenders to make a decision about which mortgage offer is best for you.
You may be reluctant to use an independent mortgage broker because you are not sure how they operate and how they make their money. Using a mortgage broker is a good way to find the best mortgage deal for you and it is not as complicated as you may believe.
How do Independent Mortgage Brokers make money?
Some people think that a mortgage broker is going to charge them a large fee for their services which is why they will not consider them. But this is not always the case and sometimes you will not have to pay anything at all to use their services.
Mortgage brokers are prohibited by law to charge you very high fees or to add any “extras”. They will normally receive around 1% or 2% of the total loan amount. They have to tell you what this amount is upfront and whether you as the borrower will have to pay it or the lender will pay the fee.
If you have to pay the mortgage broker’s fee then this is normally added to the loan and you will be able to pay it back over time. The broker’s fee has no impact on the interest rate of the mortgage and a lot of lenders will pay the broker’s fees because they want the business from them.
So what do Independent Mortgage Brokers do?
The first thing that you need to understand is that a mortgage broker is not a lender. They are in the middle of you and the various lenders and will liaise with them on your behalf. They will also discuss the documents that you need to produce so that you are more likely to qualify for a mortgage.
The broker will analyse your credit history, debt and income and then choose lenders that are the most likely to grant you a mortgage. You will never have to deal directly with the lender – only the mortgage broker the entire time. This saves you from having to talk with several different lenders.
The Advantages of using an Independent Mortgage Broker
A broker can help you to achieve approval from a mortgage lender a lot quicker than if you were to try and do this on your own. They have a lot of knowledge about how various lenders operate and can find the right deal for you a lot easier than you can.
A mortgage broker can negotiate with a lender to tailor your monthly payments so that they fit your current budget. The property buying market is very competitive and you need to act fast and a mortgage broker is the best way to do this.