Do You Really Need A Financial Adviser To Arrange Your Mortgage?
Financial advisers offer help and guidance on a whole host of financial matters. For something specific, such as a mortgage, you need to speak to a specialist mortgage adviser. But you probably know people who have done their own mortgage fact finding so is it really necessary to use a mortgage adviser or will it just be another expense to add in to the already mammoth costs of buying a property?
WHY USE A MORTGAGE ADVISER?
- Specialist mortgage advisers are bang up to date with what’s new in the mortgages sector. They have to be in order to be legally compliant. This is a heavily regulated industry and its members have a duty of care to you, the customer, to provide you with the best product for your need.
- Independent mortgage advisers are not wedded to any one product or lender. They have the pick of the mortgage products and won’t favour one lender over another. They’re on your side, not that of the lenders.
- There are dozens of mortgage lenders out there. You could devote weeks of your time to sifting through interest rates, terms and conditions and early redemption fees. Or you could let a mortgage adviser do the work for you – they’ll know what’s not right for you and can work with you and your credit history to fit something to your exact repayment, deposit, or term of loan needs.
- The duty of care of all mortgage advisers is your insurance policy. Your adviser needs to be able to quantify why they sold that particular product to you. And if you are mis-sold a product, you have the right to complain and potentially receive compensation. It is much more difficult to untangle yourself from a mortgage you have entered into directly with a lender.
- A mortgage adviser will guide you through all the policies you need – do you really want to take out the biggest loan in your life without any insurance? What happens if you can’t make the payments due to critical illness or redundancy? Your mortgage broker will find you the most complementary products for your peace of mind and future security.
WHAT ARE THE COSTS TO USING A MORTGAGE ADVISER?
There will be a cost involved in using a mortgage adviser and it varies from broker to broker. This is their job, after all. You need to weigh up the cost of buying someone’s time and expertise versus spending time you probably haven’t got investigating mortgages that might not even be right for you.
A mortgage adviser’s costs are completely transparent and up front. They have to provide you with a Key Facts document showing their fee so there aren’t any hidden costs later down the line. They will also receive a fee from the lender for either selling their product or introducing you, but this has no bearing on their choice of product and, again, will be shown on the Key Facts document.
WHERE DO YOU FIND A MORTGAGE ADVISOR AND HOW DO YOU CHOOSE WHICH ONE TO USE?
There are many, many mortgage brokers out there. A local internet search will give you hundreds of results. Many people trust the recommendations of their friends and family, you could consult a guide such as VouchedFor’s 2019 Guide to the UK’s Top Rated Financial Advisers, as published in The Times on 23 February 2019, or you could opt for someone that your estate agent recommends. You could choose a completely independent one-person business where you will always be dealt with by the same person or go for a bigger organisation where you might interact with several different people. Be sure to check the credentials of anyone you instruct and don’t forget you do have the security of a heavily and firmly regulated industry on your side.