A Comprehensive Guide to Mortgage Brokers in the UK: Why You Should Consider Using One (2023)

FAQs

A Comprehensive Guide to Mortgage Brokers in the UK: Why You Should Consider Using One? ›

Benefits of using a mortgage broker

Explain the various mortgages available and the different types of deals. Advise you on how much you can afford to borrow. Have access to special mortgage deals that are not available on the open market.

Benefits of using a mortgage broker

Explain the various mortgages available and the different types of deals. Advise you on how much you can afford to borrow. Have access to special mortgage deals that are not available on the open market.

Of course, cost is one of the most important factors when choosing your lender. You'll want to consider the interest rate, obviously, as well as loan origination fees and other charges the lender imposes. The goal should be to get the lowest rate from a lender offering the best overall loan terms.

A mortgage broker is a go-between who deals with banks or other lenders to arrange a home loan. Mortgage brokers must act in your best interests when suggesting a loan for you. A good broker works with you to: Understand your needs and goals.

Mortgage Brokers are cheaper than a bank

A mortgage broker will also have a much better understanding of your needs, and will be able to find the right mortgage for you. If you're looking to get a mortgage, rather than going through a bank, you should definitely consider getting a mortgage broker on board.

They'll check your finances, so they'll intuitively know which mortgage will suit you best – even if you have other ideas. They might be able to save you money and get you exclusive deals with lenders. They can help with the 'red tape' side of things – for example, complex paperwork and contracts.

Yes! In the UK, it's not usually standard practice for a buyer to hire an estate agent. Usually, an estate agent will only represent the person selling their property. However, if you're a buyer, there are some very useful ways you can use estate agents to help you find the right home, for the best sale price.

There are thousands of mortgage brokers in the UK. If you want to find someone local, you should start by visiting Unbiased* – which will list ones in your area. Personal recommendations can be a good way to find a reliable broker.

How easy is it to get approved for a mortgage? This all depends on your personal and financial circumstances, including if you already have an existing mortgage. Factors such as deposit, credit history, income and debt all play a large role in you being approved for a mortgage.

What are the four factors that are important to determining a mortgage payment? ›

A mortgage payment is typically made up of four components: principal, interest, taxes and insurance. The Principal portion is the amount that pays down your outstanding loan amount. Interest is the cost of borrowing money. The amount of interest you pay is determined by your interest rate and your loan balance.

A broker is an intermediary between an investor and a securities exchange—the marketplace where financial assets are bought and sold. Because securities exchanges only accept orders from individuals or firms who are members of that exchange, you need a broker to trade for you—that is, to execute buy and sell orders.

The answer to this question is yes you can use multiple brokers to act on your behalf, but the problem is, it might not help you get the mortgage you want and, in some cases, can prevent you from getting a mortgage altogether.

There's really no wrong answer. A broker can make the mortgage experience easier but limits your options. Doing it yourself takes more time, but when you've found the right loan and lender, you might end up with a better deal.

Repayment Mortgage

The most common mortgage type, repayment mortgages are the base for the vast majority of other mortgages on the market, regardless of their fancy marketing names and terms.

The UK's largest mortgage lenders are Lloyds, Santander, Nationwide, Barclays, NatWest (including former Royal Bank of Scotland accounts) and HSBC.

UK brokers have more flexibility than brokers in any other part of the world. They do not have any trading restrictions. Brokers here also create an account with only $1. Even spread betting here is exempted from taxes and it is the trader's duty to make sure that spread betting is considered legal in their region.

You should also be asked to bring a proof of address, like a recent utility bill, current bank statement or council tax statement. The lender is also likely to want proof of your income, so you may want to have with you your latest three payslips, your P60, and bank statements from the past three months.

Firms offering mortgage advice must be regulated and authorised by the Financial Conduct Authority (FCA). Details of all regulated firms are held on the FCA's Register.

Can I buy a house in UK as non resident? ›

Can foreigners buy real estate in the UK? Yes, whether you're an American, an EU resident, or another non-UK resident, you can buy a house in the UK. Buying a home in the UK as a cash buyer, on the other hand, is less challenging because obtaining a UK mortgage may be tough.

Most brokers allow you to buy and sell shares on the US market in the same account that you would normally use to buy UK shares.

In the UK, contracts are not exchanged and the purchase is not legally binding until close to the completion date (sometimes the day before!). This is why buying property in the UK is far more stressful compared to the US, where contracts are usually exchanged within a week of the offer being accepted.

American nationals can secure mortgages on UK real estate. The banks which will lend depend on whether you will remain resident in the US, or whether you are resident in the UK, and which type of visa you have.

Can you get a UK mortgage as a foreign national? Yes, it's possible. You don't have to have a UK passport in order to take out a buy-to-let, residential or commercial mortgage. You'll have to apply for what's called a foreign national mortgage.

They evaluate credit and payment history, income and assets available for a down payment and categorize their findings as the Three C's: Capacity, Credit and Collateral.

There are four types of QMs – General, Temporary, Small Creditor, and Balloon-Payment.

Students classify those characteristics based on the three C's of credit (capacity, character, and collateral), assess the riskiness of lending to that individual based on these characteristics, and then decide whether or not to approve or deny the loan request.

There's no overarching maximum age limit on getting a mortgage in the UK, but mortgage lenders normally set their own age limits. Typically, this is either: Your age when you take out a new mortgage, with the limit ranging from around 65 to 80.

What is the minimum salary to get a mortgage UK? ›

There is not a set wage you need to earn to get a mortgage. Instead, it will depend on the lender. Most lenders will look at what you can afford on a case by case basis. But some may have set conditions that can stop you from getting approved.

The most important factor of your FICO^® Score^☉ , used by 90% of top lenders, is your payment history, or how you've managed your credit accounts.

Your income and employment history are good indicators of your ability to repay outstanding debt. Income amount, stability, and type of income may all be considered. The ratio of your current and any new debt as compared to your before-tax income, known as debt-to-income ratio (DTI), may be evaluated.

Working with a mortgage broker can potentially save you time, effort, and money. A mortgage broker may have better and more access to lenders than you have. However, a broker's interests may not be aligned with your own. You may get a better deal on a loan by dealing directly with lenders.

While a real estate agent works underneath a broker, a real estate broker can work as an independent contractor or begin their own brokerage. Having a brokerage license can mean a higher salary or higher commission rates.

Get quotes from multiple lenders

Most experts recommend getting at least three rate quotes when you shop for a mortgage. But there's no limit to the number of mortgage companies you can apply with. And research suggests that the more quotes you get, the more money you'll save.

Some brokers do check lenders' direct-only deals too. However, they are more likely to charge a fee. In reality, it's unlikely a broker could guarantee you access to EVERY mortgage, as exclusive deals can be arranged between lenders and brokers (and clubs that brokers can join).

Can I change mortgage brokers? ›

Yes, you can switch mortgage brokers. However, unless you feel that a mortgage broker is really not working in your best interests, you may want to think twice about changing brokers during the application process.

A broker will be able to offer you practically the entire finance market. If you want a home loan, a quality broker can identify the most appropriate loan for you, normally from over 30 lenders. A banker can offer one set of products from their own bank, nothing else.

Are brokers better than banks for getting a mortgage? Mortgage brokers typically have two main advantages over banks. They offer access to a wider selection of mortgage products and they can leverage their relationships with multiple lenders to get their clients better rates.

They are not lenders and, as such, do not use their own funds to advance mortgage loans. Instead, they act as intermediaries, helping consumers comparison shop, bringing them a variety of quotes from different lenders at one time.

If you are about to get a mortgage, you should always get a mortgage from an experienced broker. Mortgage brokers have the knowledge and experience to find the right mortgage for you, so you can be sure that you will get the right mortgage with the right terms and conditions.

The Bank of England's base rate was at a record low of 0.1% between March 2020 and December 2021. These ultra-low deals began to vanish once the Bank started raising the base rate. The rate of borrowing has increased eleven times in a row since, to the current level of 4.25%. This has led to a rise in mortgage rates.

Lenders' typical standard variable rate (SVR) stood at 7.24% today, according to Better.co.uk. It's edged down from 7.28% which was the highest level seen since 2008. Average SVRs a year ago in May 2022 were 4.53%. At the start of April there were 5,146 residential mortgage deals on the market, according to Moneyfacts.

The Bank of England will cut the base rate to 3 per cent by the end of next year and then 2.5 per cent by the end of 2025, according to forecasts. That would be a substantial decline from the current 4.25 per cent but would still represent rates rising like a rocket and falling like a feather.

What are the different types of brokers UK? ›

Most mortgage lenders will pay mortgage brokers a commission, or procuration fee, of about 0.35 per cent of the loan size. This means that, for a £100,000 mortgage, a typical commission would be £350.

types of brokers

Your primary role is to buy or sell securities, stocks, shares or financial products on behalf of an investor. You complete the transactions through the stock exchange, and investors pay commissions and a fee. As a stockbroker, you also advise clients on the best investment opportunities.

There are 1,626 Insurance Agents & Brokers businesses in the UK as of 2023, a decline of -0.4% from 2022.

Estate agents are principally regulated by the EAA 1979 and the Consumer Protection from Unfair Trading Regulations 2008.

A major aspect of compliance is about responsible selling and ensuring that brokers and their staff do not mis-sell mortgages. This can occur in a variety of ways, for example when a broker has advised a borrower to take a loan which they cannot afford, or under terms the broker knows the borrower cannot meet.

A mortgage broker is someone who specialises in mortgages. They're also known as mortgage advisers – the term is interchangeable.

Working with a mortgage broker can potentially save you time, effort, and money. A mortgage broker may have better and more access to lenders than you have. However, a broker's interests may not be aligned with your own. You may get a better deal on a loan by dealing directly with lenders.

Local lenders provide a more personalized experience.

With other mortgage lenders, you may deal with service lines, no direct contact, and delayed service. With local lenders, you will have direct communication and a partner who will be there to guide you throughout the process.

Is it better to use an independent mortgage broker? ›

Your mortgage broker has access to more deals

These broker-only deals can't be found on price comparison sites or directly from providers. So by using a broker you increase your chances of finding the best deal to suit your needs and circumstances.

The cost of mortgage advice can vary from around £400-£500 to no direct fee at all, with the mortgage broker instead receiving commission from the lender. Sometimes the broker will charge one or the other, and in some cases they will receive both a fee and a commission.

What is a substantial disadvantage to using a mortgage broker? The broker may charge more points and higher closing fees than a traditional lender.

UK mortgage rates have gone down since they spiked last autumn and are expected to gradually return to pre-pandemic levels. Mortgages reached 6.94% last autumn – the highest level since 2002. But products are now on the decline.

banks. Are brokers better than banks for getting a mortgage? Mortgage brokers typically have two main advantages over banks. They offer access to a wider selection of mortgage products and they can leverage their relationships with multiple lenders to get their clients better rates.

If you want to check that you still have a competitive rate, a broker can reach out to your lender on your behalf to check if they can offer you a lower rate.

They consider multiple plan options and negotiate on your behalf to find the best value for your coverage. Their expertise and existing relationships with various companies give them a broader understanding of the offerings available.

Applying to multiple mortgage lenders allows you to compare rates and fees to find the best deal. Having multiple offers in hand provides leverage when negotiating with individual lenders.

Many mortgage brokers assume that their repurchase obligations are limited to instances of fraud or gross negligence. Similarly, mortgage bankers may believe that their repurchase risk is significantly lessened when the investor performs or oversees the underwriting on the loan.