Whether you are buying a new house of simply refinancing, a good mortgage advisor can not only save you lots of hassle, but also give you home loan savings
There are many reasons why every homebuyer should use a mortgage advisor, but the most important being “best rates”. It could take weeks for you to organise appointments with competing mortgage lenders – and an independent mortgage broker knows you’d probably rather spend your time house-hunting!
So they would work directly with dozens of lenders, and can quickly narrow down a list of those that suit you best. It makes comparison-shopping fast, easy, and convenient. Many people are also uncertain or uncomfortable negotiating mortgage directly with their bank. This is another reason for working with mortgage advisors.
But what are the questions you should ask a mortgage advisor to get good home loan savings?
1. How Independent are you?
Many brokers that describe themselves as independent will actually work from a panel of different providers that are representative of the market. Truly independent mortgage brokers that can deal with any lender will therefore often describe themselves as ‘whole of market’.
2. Which lenders’ products can you offer me?
If a panel is being used, find out how many lenders are on it. Anything less than 10 is no good. Larger panels should be sufficient for most borrowers, and, in many cases, lenders may offer preferential service to the broker. It is worth asking whole of market advisors how many different lenders they have used in the past year. Around 10 is a reasonable answer.
3. What level of service do you provide?
Before you commit to a mortgage advisor, get them to talk you through the process from start to finish, and find out whether they will make an actual recommendation or only provide information. Those offering the most comprehensive service will help you through the application process right the way through to completion.
4. How do you operate?
A mortgage advisor operates over the phone and face-to-face. Both work well, so your choice will ultimately come down to personal preference. The important point is that they are easy to get hold of and that you understand their advice.
5. How will you be paid?
This is an important question to ask as it will have a direct impact on your home loan savings. Some mortgage advisors will charge a fee for their service. Others don’t charge you at all and are instead paid a commission by the lender whose mortgage you buy. Some borrowers prefer to pay a fee as it means there’s no incentive for advisors to push loans paying the highest commissions. Borrowers should not feel unduly concerned about using commission-earning advisors.
6. What other services can you offer me?
A good mortgage advisor will recommend protection such as home insurance when you take out a mortgage, because it’s important to be adequately coverer. But it’s not uncommon for a broker to be whole of market in terms of the mortgage providers they use, but tied to recommend one particular provider for other services. If you are not happy with this, there’s no harm in shopping around for these extras yourself.
7. What can you offer me that a lender can’t?
This question may stump some mortgage advisors, but ultimately there are distinct benefits of using a broker over going direct to the lender. These include impartial advice, access to the most suitable and competitive deals on the market, and assistance through the application process and beyond. Advisors will also often negotiate special deals which wouldn’t be available direct from the lender.
8. Why are you offering me this product?
This question shouldn’t really need to be asked – if the mortgage advisor has listened to you requirements, the recommended mortgage should clearly reflect this. Brokers have to give written confirmation explaining their proposal, but it’s always worth asking them to talk you through their reasons first, just to check they have understood your needs.
9. When will your work be done?
A mortgage advisor’s job isn’t done until your mortgage closes. They will help ensure your mortgage transaction take place on time and to your satisfaction.
10. What next?
So you’ve listened to their advice and taken out a mortgage, but this doesn’t mean the end of the relationship with your mortgage advisor. The service will often be a one-off, but many advisors will offer ongoing support and get in touch with you when your special rate expires and you’re due to re-mortgage.