Financial talk

The process of finding, buying and moving into a new house can be stressful enough, and choosing the right kind of mortgage for your circumstances can add another layer of complexity to the proceedings. This is especially true if you choose to handle it all yourself rather than going through a mortgage broker.

If it has been a while since you arranged your last mortgage, you might be surprised at the number of options available. Whereas the only real decision you would once have had to make was between fixed rate and variable, there is now an enormous number of permutations. Wading through these to compare the best mortgage quotes can be overwhelming.

If you do choose to arrange your own mortgage, there are websites that can take much of the work out of it by comparing literally thousands of different options for you. Of course, you will then need to follow the results up yourself, contact the relevant bank, building society or specialist mortgage company and make the necessary arrangements. Even then, however, you may not feel confident enough that you are getting the best deal, and given the sums of money involved you may want some expert advice for peace of mind.

How mortgage brokers can lend a hand

The alternative to doing it yourself is finding a mortgage broker, who will be trained to look at your specific requirements and compare best mortgage quotes across the market to find the deal that is cheapest and most suitable for you. In addition, they may be able to secure particular deals for you that would not otherwise be available if you chose to shop around yourself. Of course, this advice will come at a price – although the advantage you get in better rates is liable to outweigh the cost, especially when you consider the effects of compound interest on a sum of £200,000 or more.

Sometimes you will need to pay a fee up front, whereas on other occasions it is incorporated into the mortgage itself – either by adding the sum to the amount you are mortgaging for, or because the broker is paid by the mortgage company itself in the form of a commission, which is of course then passed along to you in the rates and in your monthly payments back to them: there is no such thing as a free lunch. Note that a fee should only be paid after completion; brokers can ask for it at any time, but it can be problematic if you have already paid and the deal changes before you have signed on the dotted line.

Within reason, then, you can consult more than one broker without financial penalty. This may be advantageous as some mortgage brokers have special deals with certain lenders.

Your mortgage broker should be authorised with the Financial Services Authority (FSA), or must work for FSA-authorised firms, and you should be sure to check this as soon as possible. The authorisation means that they are bound to follow certain rules, which ensure standards of competency and fair treatment for clients.

Steven Clarke