How to choose a mortgage broker

Q. I’m looking to buy a property and want to make sure I get a good mortgage deal, but there are so many options – how do I know which is best for me?

A: There are thousands and thousands of mortgage products available across different lenders, so using a good mortgage broker should help you to quickly identify which mortgage might be most suitable for you. Note that there are some mortgage products which lenders will only offer if you come to them direct and not through a mortgage broker, so it’s always worth approaching your existing bank directly at the same time. However the majority do tend to be available on the open market.

If you do decide to approach a mortgage broker, think about whether or not you’re willing to pay a fee. Some brokers charge a fee which is payable once the mortgage is secured and drawn down. Others don’t charge you, the borrower, and their payment is solely via commission they receive from whichever lender you opt for. For any brokers who don’t charge a fee, you need to trust that they are acting in your best interest and that they will give you the best advice, rather than you being steered towards a certain mortgage product just because the commission is higher for them.

Make sure you don’t just focus on the headline mortgage rate, ask what other fees are attached for example arrangement fees or valuation fees. When you spread the cost of these out over the course of the mortgage, the rate you’re being offered may not be so attractive after all if the saving is being swallowed up by expensive fees.

The type of mortgage broker you choose also depends on your financial situation and how complex it is. If your finances are straightforward, you can use pretty much any broker. However, if you have complex finances, or want a slightly more exotic mortgage, such as a foreign currency mortgage, it is likely you will need a specialist broker who will have good relationships with private banks and can negotiate bespoke terms for you and your situation. Also, certain professions have specialist brokers who concentrate on them; professional footballers, for example, often obtain five year mortgages due to the nature of their salaries and potentially short careers.

Personality also plays a part; you need to choose a broker who you feel comfortable discussing your finances with and who you trust. Some brokers take you through the smallest detail and translate everything into layman’s terms, whereas others are much bigger picture in their style, so speak to a few and decide who you feel most comfortable with.

If you have a question you’d like Jo to answer please email or tweet her @joeccles.