60% of mortgages are arranged by Independent Mortgage Advisors and that number is set to increase.
Gone are the days when if you wanted a financial product as daunting – and expensive – as a mortgage you would pop into your local bank branch for a cosy chat with the manager. In N.Ireland, we have already seen The Ulster Bank and First Trust closing multiple branches, meaning less access to your own banks.
As recently as 2012, most mortgages were taken out directly from a bank or building society. Yet fast forward a couple of years and a combination of fewer bank and building society branches, a growing loss of faith in many banks’ ability to give sound advice and, more recently, more complex rules around taking out a mortgage, mean just over 60% home loans are now taken out through a mortgage advisor. Some industry experts are predicting this will be the preferred route for as many as three-quarters of borrowers in the next five years.
So should you join them and head to a mortgage advisor for your home loan – or are brokers a waste of money?
Anyone who has recently tried to get a mortgage directly from their bank or building society branch may have found themselves faced with a wait of weeks for an appointment. This is because the new rules also mean that all mortgage sales now need to be advised, so lenders’ staff will have to be qualified and will not be allowed to sell home loans without assessing customers.
Making the wrong choice about your mortgage can cost you hundreds – even thousands of pounds– more than you need to pay. Mortgages products are awash with additional fees and charges it’s all too easy to get tripped up. That’s why it makes a lot of sense to go with a mortgage advisor.
What to look for in a Mortgage Advisor
The three key things to look for are the number of loans they offer, the amount you will be charged for their service and what kind of reputation they have.
Their reputation might be the most difficult to assess, but many borrowers go on a recommendation from a friend or family, which can be invaluable. Otherwise, it’s worth researching online and off to see what people are saying about a particular firm. Also consider what kind of service you want: are you are happy to talk to a mortgage advisor entirely via the phone, or do you want a face-to-face appointment?
In terms of the loans available, a lender that is “whole of market” or “fully independent” will have access to the greatest number of loans, as opposed to brokers who only look at a select panel of lenders.
Independent mortgage brokers will assess just about every mortgage out there, except those offered direct only. Even then, some mortgage advisors will be willing to talk to you about whether a mortgage from that lender looks a good deal on the face of it, even if they can’t help you apply for the loan.
Most mortgage brokers also have access to “broker exclusive” deals, which may be better than those offered directly by the lender.