As a first time buyer, one of the all important things is securing a mortgage as, without one, the dream of becoming a home owner unfortunately ends. Very few of us are in a position, especially as a first time buyer, to buy a home outright and, as such, rely on a mortgage to lend us the money needed to make the purchase. Following last year’s Mortgage Market Review (MMR), however, it’s become increasingly difficult to secure a mortgage unless you meet the lender’s very strict criteria (this, as you’d expect, is imposed upon lenders by the government) and, as such, more and more individuals and couples are finding that they application is turned down.
Securing a mortgage is by no means impossible, however and it’s often simply a case of knowing what you would and wouldn’t be accepted for and, as such, we wanted to take a look at the two differing approaches of applying direct to a lender compared with using a mortgage broker. In order to have a look at these two options and weigh up which is potentially the best option, we recently spoke with Bristol mortgage broker, David Sharples of Search Mortgage Solutions. We asked David to outline the benefits of using a mortgage broker in order to generate our own opinion as to why this is seen by many as a preferential approach nowadays rather than going direct to lenders.
Applying Direct To A Lender
Whilst many have traditionally applied direct to a lender for a mortgage, this is quickly becoming a thing of the past. Despite comparison websites and the like, finding the best mortgage is a difficult and time-consuming task, especially if you’re not 100% sure as to what different types of mortgage are and how they compare to one another.
It’s often the case that first time buyers want to be spending their time finding their dream home, not looking at different mortgages which, let’s face it, often don’t make much sense!
If you go and speak to an advisor from a bank or building society, they’ll only be able to push their products which, let’s face it, may not be the best on the market! Going direct in some cases, can offer special ‘customer’ rates, however you’ll also find great deals when going through a broker.
For most people, there’s no benefit at all to going direct to a lender.
Going Through A Mortgage Broker
When you go through a mortgage broker, you’ll get so much more than someone to fill in an application for you! If you find an independent mortgage broker (which most are), you’ll find they’re able to offer advice on deals from all lenders and aren’t tied to anyone in particular. As such, you’ll often find you can secure the best deals and interest rates this way whilst still avoiding the time consuming task and hassle of searching for these and comparing yourself.
To many, the main attraction of a mortgage broker is their ability to offer invaluable advice as to the most suitable mortgage both now and going forwards. For some this will be a fixed rate whilst for other, a variable may be more suited…however it’s the advice that counts!
In many cases, mortgage brokers don’t charge a fee and simply get commission on successful mortgage applications, further justifying their use given that it often won’t cost the borrower a penny!
Times are changing and, in many instances, the most attractive and effective solution for first time buyers is to forget going direct and speak with an experienced mortgage broker from day one!