Mortgage Brokers vs. Banks: Which are better?
If you’re looking to find a mortgage on your new home, deciding whether to go with a bank or mortgage broker can be a difficult decision to make. Read on if you want us to simplify this for you!
Trying to suss the difference between a mortgage broker and a bank can be a tricky task. You may find yourself asking if one has significant perks over the other. Whether your personal financial situation will affect which one you go for, or if these are the only two options open to you. But don’t worry. All of these questions are perfectly normal ones to ask. Over this article, we’re going to go over what the pros and cons are for mortgage brokers and banks and see which one suits you best! Let’s get started.
So, what’s the difference between mortgage brokers and banks?
This is simple but, I may be biased. If you visit your bank for mortgage advice you will recieve information on guidance on what that particular bank is able to offer you. What you wont get is that particular bank or building society recommending a competitor who may have mortgage products more suited to your needs.
What you do get with a bank is a fees free advice process & a direct line of communication with your chosen lender. They will deal directly with you for information & further requirements so, speed of response is in your control
With a mortgage broker who has access to a comprehensive range of lenders, you supply your details once & this information is then used to search the mortgage market to find you the best product to meet your needs. This way you know you should be getting the most suitable mortgag edeal from across the market.
The mortgage broker will then process the application on your behalf & liaise between you & the lender to ensure the case proceeds.
This sounds a no-brainer but, it's not that straight forward. Many mortgage brokers charge a fee for their services, which is normally around the £500 mark. Also, the service can vary massively between brokers so the choice isn't as simple. As many Mortgage Brokers are sole traders their focus is very much on meeting with new clients. Less focus may be placed on case progression due to time constraints.
If you are looking to choose a Mortgage Broker, our advice is to check out review sites for an independent opinion of the person or company you are looking to select, after all, this is probably the biggest financial commitment you will make so, getting the right deal is vital.
Pros of going directly through a bank
If you already have a relationship with the bank you’re looking at getting a mortgage with, this may bring you some security and familiarity with the bank itself and staff. While you might think this is a pretty small reason for going directly through a bank, don’t overlook it! Who knows, if you’ve proven yourself to be a loyal customer, then you could get a better deal.
Pros of going with a mortgage broker
If you’re clever, using the services of a mortgage broker can be very productive. A lot of mortgage brokers offer one-stop-shop type services where all you will have to do is fill in one application and then your broker will return to you with the best quotes.
Also remember that when you’re going with an independent broker you’re getting quotes from across the whole property market. This can be a great way of getting real breadth on potential mortgage advice and potentially help you find a better deal! They’ll also be able to take your personal financial situation into account when they’re comparing deals for you. This means that if you’ve got a poor credit history then they’ll be able to look for lenders who will be willing to offer you a bad credit mortgage in spite of this.
What we can do at Mortgages Online
If you feel like you still can’t make up your mind over whether to go directly to a bank or seek advice from a mortgage broker, then don’t worry! This is where we come in. At Mortgages Online we compare thousands of deals from hundreds of different lenders across the property market to help find the best deal tailored to your financial situation. We’re a simple service that’s free and easy to use so no credit card needed.
MO offer tonnes of information about all things mortgages, including info on credit scores, fixed-rate mortgages, mortgage applications and the mortgage process too. All you have to do is visit our Articles section, to find out all you need to about mortgages!