What is a Mortgage Broker and How Are They Different to a Bank?

Whether you’re getting a mortgage for the first time or you’re remortgaging to find a better deal, dealing with mortgages can be intimidating. Once you’ve used a quick mortgage calculator to get an idea of how much you can afford, your next step is to decide where you get your mortgage. You may have heard of mortgage brokers or banks, and they’re both great places to start. There are some big differences between banks and brokers, so we can help you talk through them.

If you’re wondering, “Do I need a mortgage broker?”, you’re not alone. Mortgage brokers are becoming increasingly popular. As much as 90% of mortgages in the UK involve a mortgage broker. But what’s the difference between a mortgage broker and a bank? And which should you use?

What is a mortgage advisor?

In our last article, we covered exactly what a mortgage broker is and what they do. But in case you need a refresher, they essentially work as a liaison between you and a lender. They have access to a lot of different deals from many different lenders, and will look at all of them to decide the right fit for you. Because they have access to a wide range of deals, they may be able to find you a mortgage that better suits your budget, potentially saving you hundreds of pounds.

They also handle the paperwork, so you don’t have to worry about ticking the wrong box or submitting an invalid proof of address. A mortgage broker takes a lot of stress from your plate during the process.

What about banks?

A bank is essentially the lender – they’re the ones letting you borrow the money for your mortgage. And you can go directly to them. If you have a good relationship with your bank and are happy with their deals, then you can proceed to see what deals they have available. The downside to going directly through your bank is that they have limited offers as they only advise you on the bank’s products, so you may not be getting the best deal available.

Consider fees

Whenever you’re thinking about mortgages – whether you’re buying your first house or remortgaging – remember to factor in fees. Mortgage brokers often make money from a lender, but sometimes they charge a fee. Read the fine print, as some advisors are more transparent about their fees than others.

As for lenders, look out for product fees and arrangement fees to see how much it will really cost. That being said, if you find a great rate, then it might be worth considering a product fee. If you go with a mortgage advisor, they can talk you through your options so you feel empowered to make financial decisions.

Is it better to go through a mortgage advisor or a bank?

Ultimately, it’s your choice. There are many benefits of using an advisor as they explore more mortgage options, take care of the paperwork and do all the chasing for you. There’s a reason most people use a mortgage advisor, after all. However, if you feel you want to stick with what your bank is offering, you’ll be able to deal with any hiccups directly with them.

Find your mortgage advisor

Our trusted mortgage brokers and advisors can guide you through the process, and help you find a deal that’s right for you. From remortgaging to finding a mortgage for your first home purchase, they can help you wherever you are in the journey. To start making more informed decisions when it comes to buying a home or remortgaging, get in touch today.