Mortgage Brokers - Recommended Questions

 

PROPERTY ADVICE BLOG - Mortgage Brokers - Recommended Questions

Before you decide on your mortgage broker think about how well you relate to them and whether you find their service informative and relevant. In addition there are three important questions to ask.

•    Are you ‘whole of the market’?

•    Are you also an independent financial adviser?

•    Do you charge on a commission basis?

•    Are you whole of market?

 

If a Mortgage Broker is ‘whole of market’ it means that you will be offered a mortgage which has been chosen from a wide field. In this way you should be able to find the best deal for you which is available on the market. This is an important question to ask as some mortgage brokers only deal with a small selection of lenders because it is cheaper for them to do so. Property Advice Blog recommends ‘whole of market’ mortgage brokers for a thorough search and ultimately a better mortgage deal.

Are you also an Independent Financial Adviser? - You may find that you need the skills of an Independent Financial Adviser if you took out an endowment mortgage in the 1980s or 1990s. This type of ‘interest only’ mortgage which is paid into an endowment is designed to pay off the mortgage debt. However, many endowment mortgages fail to deliver as the investment is not adequate to repay the mortgage, and a large number of borrowers are not able to make up the shortfall. If you need property finance advice on dealing with a failing endowment mortgage you’ll find that a mortgage broker who is qualified as an Independent Financial Adviser is a worthwhile investment.

Do you charge on a commission basis? - Mortgage brokers typically gain income from two sources: commission and fees.

Commission - Many lenders pay mortgage brokers commission known as a ‘procuration fee'. This figure is generally around 0.25% to 0.5% of the mortgage's value and can extend to 1% depending on whether you have a poor credit rating. E.g. For a mortgage of £150,000, a mortgage broker would earn around £375 to £1,500.

Fees - Some mortgage brokers ask for a fee which can be charged at any time in the process.

 

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