There is always the question of whether to go with a mortgage broker, or directly through the bank when you are applying for a mortgage. There are, of course, pros and cons for both, but ultimately it is the individual’s decision. Read on to find out more about your options.
Starting with the basics, mortgage brokers are there to guide you through your mortgage application, acting as a middleman between yourself and the bank you are/want to lend from. They will help to put together your application, get your documents in order and so on.
Banks do this too; however, mortgage brokers are not bound to one bank. They can shop around to find the best deal for you and your situation. Especially if you are someone with adverse credit, or who has been turned away by mainstream banks – a broker can help to find a lender who will accept your circumstances.
Pros & cons of mortgage brokers
Pros of mortgage brokers
- They have access to many different lenders for all different client situations, meaning the chances of being accepted for a mortgage if you have, for example, adverse credit, are increased. They can also find the lender with the best rate/fees
- They have wider knowledge of the practice, as their job is consistently working with mortgages and dealing with a variety of scenarios (whereas banks usually assign a general employee within the bank)
- Brokerages tend to be smaller companies, meaning your service can be more personal and tailored to you
- A mortgage brokerage company is exactly that. A bank has different departments, branches, etc. With a broker, there will be easier contact methods and usually quicker processing time
Cons of mortgage brokers
- The fees can be higher. This will vary from case to case, and sometimes paying a little more up front can save you a lot of money in the future – as your broker can find you the best rates
- There can be delays when documents have to be sent to be checked by the lender’s underwriting team. As brokerages do not usually have an in-house underwriter, the processing time could be extended
Pros & cons of banks/direct lenders
Banks or direct lenders are the companies providing you with your mortgage loan. They will, like brokers, help you through your mortgage. You will have to do the research to find the bank you would like to apply with.
Pros of banks/direct lenders
- Potentially save on fees
- You have direct contact with your lender, meaning it can decrease the processing time of your application
- If you are accepted at your local bank, you may already have experience with them and know the banker.
Cons of banks/direct lenders
- Less flexible requirements. If you have low credit/bad credit or any sort of adverse history in your case, you may be denied a mortgage
- The rates will be the lenders' rates, so they may not be the lowest or best you could get
- The assigned employees could potentially be less experienced than a mortgage broker, as they are not experts in the subject
- There are fewer mortgage options
To conclude
Overall, it is what works best for each individual. Both have valid pros and cons that you will need to take into consideration before applying for your mortgage.
If you are interested in going down the brokerage route, call us today on 0333 320 8658, or send us an email at info@viewfinance.co.uk. Our experienced and friendly brokers, specialising in adverse cases, will be more than happy to speak with you about your options and hopefully begin your mortgage application. Don’t hesitate; contact us today!
