Mortgages - A Guide to Mortgage Brokers

Buying your first home or any piece of property for that matter is likely to be the most costly and stressful purchase you will ever make. For this reason, a mortgage broker is brought into the equation, making the buying process simpler.

Essentially, mortgage brokers are highly trained individuals who specialize in the home loans market, who help buyers seek out the most suitable and competitive mortgage for their requirements. They comb through all of varying mortgage packages that offer countless different interest rates and incentives, presenting the potential buyer with the best deals.

Not all brokers are the same, and it's important to highlight the distinction between the three main types.

The first and most restrictive of the three are lender specific brokers, meaning that they will only look at and source from one particular lender. The obvious problem with these brokers is that you are not going to get a true taste of the whole market, on the flipside though; such brokers are usually able to offer better deals on the small amount of mortgages they deal with.

Secondly, there are brokers that are able to recommend mortgages from a panel of lenders. This offers a little more variety than lender only brokers; the whole market though, is still not covered. Some brokers that fall into this category can refer to themselves as "whole of the market" brokers, as long as they offer at least one mortgage from all lenders.

Lastly there are independent brokers, whom, as the name suggests are completely independent from any specific lender. The main advantage of such brokers being their ability to offer you deals from the whole of the market.

Unlike specific and panel brokers who charge commission, independent brokers usually charge a flat upfront fee. In both cases expect to pay around 200, and it really does pay to call around a few brokers before making a choice.

By far the best way to source a broker is by personal recommendation, either from current tenants or friends and family. If this is not possible, then the internet and press adverts are an excellent source.

Firstly a mortgage broker will asses your financial situation, credit history and calculate how large a mortgage you will be able to afford. Mortgages are best sourced online; any mortgages you find should be discussed with your broker.

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