Do I Need To Use My Estate Agent's In-House Mortgage Broker?
8th June 2017
Legally you’re under no obligation to use the mortgage broker your estate agent recommends when buying a property. They might try to pressure you into using their in-house broker, but you’re always free to do your own research and use an independent broker you trust to find you the right deal.
If you’re buying a home, you might find the estate agent you’re dealing with stating you have to use their in-house mortgage broker to find your mortgage. They may even threaten that you’ll miss out on the property unless you use their broker of choice. However, this isn’t true.
Estate agents have no control over which mortgage broker you use, but they may attempt to pressure you into using their in-house broker because it could be beneficial for them.
There are a few options when it comes to deciding on how to get a mortgage. You can seek advice from an independent mortgage broker, go directly to the lender, or use the broker your estate agent recommends, but the choice is yours - not your estate agent’s.
Why do estate agents say you need to use their in-house mortgage broker?
There are a number of reasons why estate agents encourage buyers to use their in-house mortgage broker.
Generally, it’s because they have a commercial deal whereby they’re paid a fee for every recommendation they make. Some also might have sales targets to hit.
You might start to feel the pressure more if the property they’re selling is in demand, as a pool of buyers to choose from means they’ll pick whoever’s going to make them money.
However, none of these reasons mean you’re obliged to use their in-house broker.
Should I use my estate agent’s broker?
There’s no right or wrong answer, but it’s important to remember that it’s completely up to you which broker you use.
Do you like them?
You’re likely to be in contact with your mortgage adviser a fair amount. It’s therefore important you trust them to find you the right deal, and if you like and trust the adviser recommended by the estate agent, it could be a good option.
Have you looked around at mortgage deals?
Before you commit to using your estate agent’s in-house mortgage broker, it’s a good idea to have a look around to familiarise yourself with the deals available.
It’s also important to consider that some brokers are tied to a few lenders, which means they can’t search the whole market. A broker who looks at the whole market is likely to find you the most suitable deal.
Do they charge a fee?
If the in-house broker charges a fee, look elsewhere. Many mortgage brokers are fee-free, and instead receive a small percentage of the mortgage amount from the lender rather than charging the customer.
Is their service good?
Sometimes you could find that an independent broker gives you a better service than the broker your estate agent recommends. This isn’t true in all cases, but as independent brokers rely on word of mouth for recommendations, it’s in their interests to deliver on service. If the in-house broker is getting constant business from an estate agent regardless of your recommendation, you might be viewed more as a means to an end.
Reading online reviews will give you an unbiased indication of the type of service you can expect - Trustpilot is a good place to start.
Are they looking after your best interests?
Remember that as the estate agent is working in the interests of the seller, there could be a conflict of interest. A mortgage broker should have your best interests at heart, so if you feel like you’re being pressured into a deal to move things forward quickly and keep the seller happy, look elsewhere.
The most important things to consider when choosing your mortgage broker are their fees, whether they search the whole of the market to find you the most suitable deal, and your personal preferences. You’ll be in regular contact with your adviser, so it’s worth choosing someone you get on with.
Other ways to get a mortgage
Go direct to your lender
Speaking to your bank before deciding on a mortgage broker is a good way to establish which deals are out there, and how much you could be paying. However, lenders can’t advise you of a better deal with another lender as they can only see their own products, so it’s advisable to look around before you commit.
It’s likely you’ll have to organise your mortgage face-to-face or on the phone if you choose to go directly to your lender, which can be time-consuming.
Use a mortgage broker
Most mortgage brokers work with a panel of lenders, including most high street banks. Others work with a mortgage club, meaning they have access to the ‘intermediary market’ and can search across deals for a large number of lenders. Trussle has access to the imtermediary market and searches more than 11,000 deals from over 90 lenders.
It’s advisable to use a mortgage broker if your income is complicated - for instance if you’re self-employed, or have a less common salary structure. You can choose to use either a traditional mortgage adviser or an online broker - both will take all your details into account to find the right deal.
Online mortgage brokers like Trussle give you the benefit of managing your application online, and even from your mobile. You’ll still get the same personal service from a real adviser - just at a time that suits you.