Do mortgage brokers get better rates?

If you’re thinking about getting a mortgage, you might be wondering if using a mortgage broker can get you a better deal. This article will help you understand what mortgage brokers do, how they may help you get better rates, and whether you should use one or go directly to your bank.

What is a mortgage broker?

A mortgage broker is a person or a company that helps you find a mortgage. They act as a middleman between you and the banks or other lenders. Instead of you going directly to a bank to apply for a mortgage, a broker helps you find the best deals from multiple lenders.

They can save you time by comparing different mortgage options, and sometimes, they might even help you find deals that you wouldn’t have found on your own.

How do mortgage brokers access better rates?

Mortgage brokers are often able to get better rates than you could get by going directly to a bank. Let’s look at how they manage to do this:

Access to the whole of the market

Mortgage brokers work with many different lenders.
They can compare offers from all over the market to find the best deal.
When you go to a bank on your own, you’re limited to that bank’s offerings.

Lender relationships and negotiation power

Mortgage brokers have established relationships with many lenders.
These relationships can help brokers negotiate better rates.
Brokers can sometimes secure better rates than you might find on your own.

Exclusive rates that are not available directly

Brokers sometimes have access to exclusive rates that are not available to the public.
These rates are special offers that you can only get through a broker.
If you went directly to a bank, you wouldn’t be able to access these exclusive deals.

Should I use a mortgage broker or go to my bank?

Now that you understand what mortgage brokers do, you might be wondering if it’s better to use a broker or go directly to your bank. Let’s look at some things to consider:

Service levels and advice

Mortgage brokers provide personalised service and advice.
They should take the time to understand your financial situation.
Brokers can explain the pros and cons of different mortgage options from various lenders.

Direct applications with banks

If you already have an account with a bank, it might be easier to apply directly with them. Your bank may also offer customer-exclusive mortgage deals that a broker can’t.
Going directly to a bank may offer a more straightforward process if you’re already a customer.
Banks can only offer their mortgage products, so you might not get the best deal available.

Fees and commissions

Mortgage brokers may charge a fee for their services.
- Some brokers charge a flat fee.
- Others may earn a commission from the lender for bringing in customers.
It’s important to ask about any fees upfront to understand what you’ll be paying.

Incentives and cashback

Banks sometimes offer incentives or cashback for mortgage applicants.
These could be one-time offers that can save you money in the short term.
Mortgage brokers can also help you find incentives, but they may not always offer the same deals that a bank might provide directly.

Do mortgage brokers always get the best rate?

While mortgage brokers can often help you find better deals, they don’t always guarantee the best rate. There are a few things to keep in mind:

Some brokers may not have access to every lender or every mortgage deal available.
The best rate for you depends on your personal circumstances, such as your credit score, the amount you want to borrow, and how much you can afford to repay.
Brokers will work to find the best deals for you, but it’s important to remember that no one can promise the absolute best rate for every situation.

What situations can a mortgage broker help you with?

Mortgage brokers can be very helpful in certain situations. Here’s how they can assist in different scenarios:

Being a first-time buyer

If you’re a first-time buyer, brokers can help you navigate the mortgage process.
They will help you find lenders who are more likely to approve your application.
Brokers can explain all the different mortgage options available for first-time buyers.

Remortgaging or looking for a buy-to-let mortgage

Brokers can help if you’re looking to remortgage or buy a property to rent out.
They will help you compare different deals to find the best one based on your goals, whether it’s lowering your monthly payments or getting a better interest rate.
For buy-to-let mortgages, brokers can help you find deals that are specifically tailored for people who want to rent out a property.

Poor credit history

If you have a poor credit history, brokers can find lenders who are more likely to approve your application.
They know which lenders are more flexible when it comes to low credit scores and can help you find a suitable mortgage.

Being self-employed

Being self-employed can make getting a mortgage more difficult, but brokers can help.
They know which lenders are more likely to accept self-employed applicants and can guide you through the application process.

Summary

In conclusion, mortgage brokers can be very helpful in finding better mortgage rates, but they don’t always guarantee the best deal for everyone. Here’s a quick recap of what we’ve covered:

Mortgage brokers help you find the best mortgage deals by working with many lenders, using their relationships, and accessing exclusive rates.
They can offer valuable advice and save you time by comparing different options.
Going directly to a bank may be easier for some people, especially if they already have an account there. However, brokers may provide better rates in certain situations.
Mortgage brokers can be especially helpful if you are a first-time buyer, self-employed, have poor credit, or are looking to remortgage or get a buy-to-let mortgage.

If you’re looking for a better deal on your mortgage, don’t hesitate to find a mortgage broker who can help you find the right solution for your needs.