Mortgage broker guide
A mortgage broker could help you on your journey towards homeownership. But what is a mortgage broker? And what should you consider when choosing a mortgage broker?
What is a mortgage broker?
Mortgage brokers look at your options and help you through the process of getting a mortgage. They are sometimes known as advisers and intermediaries.
The Financial Conduct Authority regulates mortgage brokers. Brokers may be authorised themselves, or act as agents of another regulated firm.
Brokers are qualified to compare the best deals across the market from a range of lenders, to get one that suits you.
Trussle is a mortgage broker
Trussle is an online mortgage broker. We can give you mortgage advice and help you find the best deal for your personal circumstances.
Unlike most brokers, Trussle is completely free. We will not charge you a penny for expert mortgage advice or for arranging a mortgage with a lender.
Should I use a mortgage broker?
A qualified industry expert will tell you that it could be easier to get a mortgage with a broker.
Brokers will help make sure your application is of a high standard so it's more likely that a lender will accept it.
In most cases, we would recommend using a broker rather than walking into your local bank branch. That could be Trussle or another company that you trust.
Different kinds of mortgage brokers
Some brokers prefer dealing face to face, whilst others prefer over the phone.
Online brokers like Trussle are proud to be able to deal with most of the application online.
Large broker firms may:
employ hundreds of advisers
use more sophisticated technology to make the application process smoother. This is not always the case
Smaller firms may:
only employ one or two employees
argue that they offer a more personal and face to face approach
Brokers may specialise in different things such as:
Whole of market and limited panels
Some brokers have access to more lenders than others.
Some brokers are described as ‘whole of market’ or ‘independent’. These may cover more of the market than a broker with a ‘limited’ lender panel.
A limited lender panel refer business to a select number of lenders
Before you decide to use a broker, ask how many lenders they have access to.
Some smaller or newly-launched mortgage lenders only offer their mortgages through some brokerages. So it’s difficult for any broker to cover 100% of the market.
How much do mortgage brokers charge?
Some mortgage brokers charge you a fee to use their services. Others, including Trussle, are fee-free.
If you use a broker that charges a fee, you can expect to pay between £300 and £500 for a normal residential mortgage.
All mortgage brokers and advisers get paid a ‘procuration fee’ by the lender or building society. They get paid when they successfully arrange a mortgage. This is how fee-free brokers make money without charging you anything.
The fee is made up of a small percentage of the loan amount.
Choosing a broker
There are a few ways to find and choose a broker.
research well known broker firms that show when you search for ‘mortgage brokers’
search for broker firms in your area. Some companies have tools that let you find local advisers
check in local newspapers, magazines or on TV where brokers may advertise
ask people you know who they used
ask a develop or estate agent to refer you to a broker. Do some research on the recommendation before agreeing
check customer review sites such as Trustpilot look at reviews. This way you can check their reputation and see if they're trustworthy
Not all brokers satisfy customers
Applying for a mortgage can involve a lot of paperwork. As well as back and forth when using a traditional broker or lender.
We found that a lot of customers have not always had a positive experience when taking out a mortgage in this way.
In 2018 we surveyed 2,000 people and found that:
40% of homeowners recall their previous mortgage experience as being negative
2 in 5 homeowners found the mortgage experience stressful
1 in 5 said the most stress came from the amount of paperwork they needed for their initial application
15% blamed the industry’s use of jargon for adding stress
Online brokers do everything online. This could reduce a lot of stress as you know you can go through the mortgage process from your own home.
Traditional mortgage brokers vs. online mortgage brokers
Online mortgage brokers let you access your account any time of day. Some major brokerages with sophisticated systems can say the same.
One person brokers will sometimes agree to meet you at unusual times of the day or evening. But they cannot be available 24/7.
Technology-based brokers have an edge if you're looking to remortgage.
Trussle can check the market and tell you when it makes sense to switch to another deal. This is useful when you come to the end of your current deal.
Our algorithm will tell you if it makes sense to switch despite paying early repayment charges. It could be a better choice long term to change your mortgage deal long before your current one expires.
Monitoring the market in this way is not something traditional brokers can do.
Online advisers tend to use chatbots, online forms, or apps, as well as phone calls if you prefer.
This is ideal for some but some prefer a face-to-face experience. So it depends what you’re comfortable with.
In both cases, you'll need to submit some paperwork. But you can do this online and an adviser can help you with the application process.
More about brokers
Mortgage brokers do not handle credit checks themselves.
You can check your credit rate for free using agencies like Experian, Equifax, and TransUnion.
When you apply, lenders will do a credit check.
This can be a soft check which does not affect your credit score if you are turned down. Or a hard check which could.
You should avoid applying for lots of mortgages or loans or credit cards at the same time.
Many credit applications could harm your ability to get a mortgage in the future. Especially if you're turned down.
A broker can often get a better deal as they're able to compare what's available across the market. So are better placed to get deals through quicker.
Going straight to a lender could be quicker. But will not give you the benefit of having someone compare deals from different lenders.
Some lenders’ deals are intermediary access only. This means you can only get a mortgage with them through a broker.
This also means that brokers may be able to get customers exclusive deals with these lenders.
Good brokers are familiar with the most competitive products at any given time. They'll also know which lender may suit you best.
It’s up to you which broker you use but you might want to ask yourself some questions.
Do you like them?
You’re likely to be in contact with your mortgage adviser a fair amount. It’s important you trust them to find you the right deal.
Have you looked around at mortgage deals?
Before you agree to use your estate agent’s mortgage broker, check what sort of deals are available.
Some brokers are tied to a few lenders, so they cannot 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?
Look elsewhere if the broker charges a fee. Many mortgage brokers are fee-free. They get a small percentage of the mortgage amount from the lender instead of charging you.
Is their service good?
You could find that you get better service from an independent broker.
Independent brokers rely on recommendations, so it's best for them to offer good service.
If the in-house broker gets constant business from an estate agent, they may view you more as a means to an end.
Reading online reviews will give you an unbiased idea of the type of service you can expect. You can check reviews on Trustpilot.
Are they looking after your best interests?
Estate agents work in the interests of the seller so there could be a conflict of interest.
A mortgage broker should have your best interests at heart. If you feel pressured to move quickly into a deal, look elsewhere.
The key thing to consider when choosing a broker is their fees.
Even if they search the whole market to find you the best deal and your personal preferences.
You’ll be in regular contact with your adviser, so it’s worth choosing someone you get on with.
Get a mortgage with Trussle today
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Your home could be repossessed if you don't keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage.
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