Mortgages: Bank Or A Broker?
Many people wonder if they should use or mortgage broker or just go directly to a bank, maybe even their own bank for a mortgage.
Does one way have advantages over the other and what is the best option for your circumstances?
In this blog, we look at the different options and how to decide what may be the right choice for you.
Bank or Broker?
The biggest and most obvious difference between directly sourcing your own mortgage deal is the amount of access you will have to different deals; plus the time it would take you to check out all the options you come across.
A broker can save you significant amounts of time when it comes to sourcing a great deal. If you were to go to all the different lenders yourself it would be a sizeable project!
In addition, a mortgage broker may also have exclusive access to products that are not available to you as an individual.
Getting a Mortgage With A Bank
As mentioned, sourcing your own mortgage may mean spending more time shopping around and doing research. You may also miss out on deals offered by brokers.
But you may also find a really great deal with a bank, particularly if it is your own bank and you already have a relationship.
Your own bank may also be able to offer you perks based on your existing relationship, such as covering fees for you. Gaining a mortgage through your bank can often be seen as a relatively simple process (provided there are no factors that could affect your chances of getting a mortgage approval), but this isn’t always the case.
The downside of using your bank is that any advice given will favour the bank – a bank wants your custom so they aren’t going to advise you if you could get a better deal elsewhere. Hence why it is important to do research when working with your bank. Look at what other banks are offering, interest rates and your credit history – you may get a better deal with another bank.
Getting a Mortgage With A Broker
A mortgage broker is a middleman between you and mortgage lenders, which includes banks. Although brokers may have incentives to use particular lenders, the wide range of options they have access to makes them a great resource when it comes to finding a great deal.
Although you will usually pay a fee to use a broker’s services, many people find this fee worthwhile when you realise how much time and money you could potentially save. With a mortgage broker, there is no running around to different lenders yourself and your mortgage broker may be able to find you a much better deal.
Personal circumstances are another great reason to choose a mortgage broker – if your credit history is a little shaky, you are a first-time buyer or have any other circumstances making your search for a mortgage a bit trickier, then a mortgage broker may be a better option for you.
Mortgage brokers are also called mortgage advisors because a large part of the service offered involves looking at your circumstances and coming up with a plan that gives you the best possible chance of being accepted for a mortgage.
How to Choose Between a Bank and a Mortgage Broker
Getting a mortgage with your bank or a broker are both good options – each has its advantages, and your final decision will likely come down to your circumstances, how financially savvy you want to be, and the amount of time you want to spend shopping around.
Why not first speak to friends or family and ask them what they did? If any of them used a mortgage broker, ask if they would recommend you use them too.
There is also nothing wrong with speaking to both a broker and a bank – you could get a mortgage in principle from your bank and a broker (just be aware that a mortgage in principle is not a guarantee and the costs can change) just to compare. You also need to be aware that doing this can affect your score due to the number of searches.
Can’t Make Up Your Mind?
Whether you are looking to move home, remortgage, are a first-time buyer or even just want some advice, please get in touch with us.
You can call us on 01302 436333 or email email@example.com
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for arranging a mortgage and the precise amount will depend on your circumstances. This will typically be £399.