Mortgages Uncovered

Why is it that brokers can’t seem to find as good deals on mortgages as we can find for ourselves online?

Many brokers are being locked out by banks and loan companies because of the uncertainty in the mortgage market right now. This means that even with the best will in the world they can’t always find deals as appealing (on the face of it) as some you might be able to find for yourself online. In a recent report by Moneyfacts, it was shown that, based on £150,000 mortgage, the best 13 deals for a two-year, fixed-rate home loan weren’t available to brokers at all and had to be purchased straight from the lenders themselves.

Generally speaking, this has been caused by an uncontrollable increase in applications to lenders due to the credit crunch and the hike costs from home loans from mortgage and home-loan companies. Odd though it may seem at first glance, too much business actually threatens the profit margins of lenders and so they have blocked off brokers, who, as lenders have to pay them a substantial commission, have been deemed an unnecessary expense in these difficult times.

This means that if customers want to find the best deals on mortgages they will have to do a lot of the looking around and administration for themselves. It is still worth approaching at least two brokers to find you the best deals, remembering that even if they charge for their time they do not get paid until completion of the deal – so if you don’t settle on a deal they offer you don’t pay them. Essentially you are just getting advice from them.

While the brokers are looking around for deals prospective home-buyers should really throw themselves into researching for a good deal on the internet, from both independent sites and also from the lenders own websites. Eventually you should have a list of options from your own research and from the brokers you approached and from there it is just a matter of weighing up which deal is best for you, taking into account your income and how much free time you have to do any essential administration.

If you choose to go it alone without a broker you will be freed from whatever commissions and additional expenses that come with them. Then again, you will have to deal with the valuers, solicitors and mortgage lenders for up to two months, on top of the usual stresses and responsibilities in your life (your job, children etc)

A Broker will tend to cost more, but will deal with all the paperwork and administrative nightmares that can arise from house-buying and entering into mortgages. One of the The biggest concerns of not engaging a broker is that even if you find a good deal it still might not be the best mortgage for your personal circumstances. Maybe a slightly more expensive but very flexible mortgage would serve you better than a cheaper fixed term contract? Remember that brokers aren’t just there to find deals that you can find for yourself with a bit of legwork – brokers can also offer expert advice about your situation.

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