What is an Independent Mortgage Advisor?

Hiring a mortgage advisor (broker) is one of the best things you can do to save money on the costs of moving home.

An independent mortgage advisor is someone who gives you financial advice and support on different mortgage options. They have a duty of care to you, enabling them to offer you unbiased advice as they are not tied down by a particular lender (bank). 

There are three types of mortgage brokers:

  • Brokers that are tied to a specific leader (bank)
  • Brokers that look at deals from a limited list of lenders
  • Brokers that search the whole market for a wider range of mortgage products (whole-of-market brokers)

They can help you find the best mortgage for your financial situation, saving you thousands in the long run.

If you decide to look yourself without consulting an advisor, you do not have the network or information to access many different kinds of mortgage products that could benefit your house move.

Is it a Good Idea to Seek Mortgage Advice?

In short, yes!

Banks (lenders) will offer their advice when discussing mortgage options with you. However, both their mortgage options and advice will be limited regarding how much they can offer you.

When buying a house, you should be ending up with a mortgage that suits your personal needs and financial situation. A bank might only have up to five options available to you.

On the other hand, an independent mortgage broker will be able to search through their portfolio of contacts, lenders and mortgages to address your unique situation and find you the best deal possible.

It’s easy to search for mortgage answers online but talking with a professional about this major investment will help you immensely in the long-term.

Potential Risks of Not Receiving Mortgage Advice

If you have received advice from an independent Mortgage Broker and by some chance, the mortgage turns out to be unsuitable, then you have every right to complain and seek suitable legal help. Financial misselling is just one of the routes you could go down if you could not afford to keep up the repayments.

However, if you do not seek advice from a broker, then this means that you must take full responsibility for your mortgage and any repayments you can’t afford.

If you choose not to seek a mortgage broker, then you could end up being rejected by your chosen lender (bank) because you did not go through the effects of the mortgage thoroughly enough. You could also end up with a mortgage terribly suited for your situation and, with hindsight, you would have chosen differently had you understood it more.

An independent mortgage advisor will go through all of this with you, making sure that you understand every financial detail.

Unsure about different Mortgage terms & jargon?

See our handy Mortgage Terminology Guide, perfect for beginners, first-time buyers and exeprienced hats who need some extra knowledge.

Who Should Use a Mortgage Broker?

Anyone who’s thinking about getting a mortgage!

Many homebuyers swear by using a mortgage broker because the mortgage process has been that much smoother for them when using one.  

If you have any financial queries about how different mortgages work and want to be given as much information as possible regarding your own, then you will want to hire an independent mortgage broker.

Benefits of Using an Independent Mortgage Broker

There are numerous advantages to using a mortgage broker instead of approaching a single lender:

  • They will check your financial situation to make sure you can afford the necessary repayments.
  • They will help you understand all the costs involved with your mortgage.
  • Some brokers might have exclusive deals with select lenders that are not available elsewhere.
  • Brokers will complete your paperwork, so your application should be put through much quicker.
  • They will communicate which mortgage option will be best for you judging by your unique financial situation

See our full article on how a mortgage broker can benefit your house move.

What are a Mortgage Broker’s Fees?

A Mortgage Advisor usually has two possible sources of income:

  • Commission-Based

Almost all lenders (banks) pay the mortgage broker a 'procuration fee' of roughly 0.35% of the transaction (e.g. £350 from a £100,000 mortgage). This is commission based on your mortgage loan size – and doesn't affect the cost of your mortgage. It comes out of the amount already owed.

Mortgage brokers must inform you of the amount they will be paid before you put through a mortgage application.

  • Fee-Based

Some mortgage brokers charge you a direct fee. This can either be instead of the commission or in addition to it.

Be careful here. If any broker does not offer this option, then they are not classed as an independent mortgage broker.

Any broker that you come across can charge up to around 1% of the mortgage value, either for their fee or their commission. This maximum percentage is even applied to those with a bad credit rating.

Your mortgage broker will tell you where in the process they will charge the s fee. This means that they can charge you during the mortgage application or after. Be wary of mortgage brokers who are asking for big fees upfront before completion! It’s likely that you’ll legally agree to pay them even if the purchase falls through!

Why Hire a Mortgage Advisor?

There are many important areas of the house-moving process. Making sure you get the right mortgage is one of them. But why should you hire a mortgage advisor?

  • Professionally Qualified

Independent mortgage advisors have to gain professional qualifications before they can advise you.

In comparison, if you ring up a lender (bank) and start asking for questions and advice, you might realise that you aren’t talking to a qualified professional. There are new regulations in place so that this scenario doesn’t happen, but this isn’t a solid guarantee for those unaware.

  • Industry Knowledge

An independent broker has dealings with different lenders every day. They know how long the application process takes to go through and which lender completes this without delay.

A broker will know the lender’s background and what clients that they usually take on, giving you the chance the cross them off your list if they happen not to accept applications like yours.

If a broker is putting through numerous clients to a select lender, then they can exert their influence in matters you could not sway yourself. They will have the right contacts, the network and communication skills to get you the right deal at the right price.

  • Strong Protection

If you feel you have been given false advice, then there is a strong legal system in place to complain and be compensated for poor service.

However, if you went to the bank to get a mortgage, didn’t receive any suitable advice and end up paying for a mortgage that you cannot afford, then the current legal system does not offer you a simple way out.

Going with a mortgage broker offers strong protection against unsuitable mortgages.

  • On Your Side

Independent mortgage advisors have a duty of care to you – unlike the banks. They work for your best interest, meaning that they have to recommend the best mortgages for your suitable situation.

Brokers are on your side, not that of the lenders.

They’re able to give you unbiased advice on a far bigger range of mortgage products than that of a single lender. You’d be able to choose from a range of lenders and all of their various products. Rather than try to choose from a limited range, you’d get a whole list of different ways to pay for your house that works best for your financial situation.

Even if you have a CCJ, mortgage advisors are the best at fighting your corner for the best mortgage deal!

The Value of Professional Mortgage Advice

Mortgages can be a very complex process to get your head around. You've got to think about rates, agreements, lenders, length of terms etc.

A mortgage advisor will speak to you about your unique circumstances and what you're looking for.

From this, they will recommend the most suitable mortgage products to you.  

The thorough nature of their work makes their professional advice well worth seeking.

Where Can I Get a Mortgage Broker?

You’re in the right place!

My Big Move can provide you with the best mortgage advisors from across the UK, both local and nationwide. 

All of our providers are regulated and adhere to the best mortgage advisory practices. Find your perfect mortgage advisor now!