Even those with experience can find it daunting to find the best funding arrangement when looking to buy a property. There are so many different factors to take into consideration such as fees, interest rates and the duration of the loan. So, when should you use a mortgage broker?
Lack of experience
If you have a lack of experience when it comes to financial affairs then it may well be worthwhile employing the services of a mortgage broker. Their fees, commissions, etc are now more transparent than ever before due to ever tightening regulations. So, you know who they are allowed to talk to, how much it will cost you and you have an array of protections when working with regulated companies.
Special situations
In the world of finance we often come across very different parties looking to secure funding to acquire property. These may include expats from a different country, those with significant assets but poor cash flow or those with relatively low credit ratings. A mortgage broker will be able to find the most appropriate funding partners, within their scope, and hopefully instigate a degree of competition between the parties. This will allow you to secure the very best terms!
High net worth individuals
The world of high net worth individuals is very different from the traditional UK mortgage market for example. We are literally talking about millions of pounds in mortgage funding often secured against different properties and funded by a variety of income streams. We tend to find that high net worth individuals will also have income streams from various parts of the world which are not always appreciated by traditional UK banks.
Extended relationship
If you follow the private banking sector, as one example, you will be well aware that not only do they offer mortgage funding but an array of other specialised and personalised services. Therefore, very often high net worth individuals will find it easier and perhaps more cost-effective to have all of their assets and additional services under one roof. This can be anything from mortgage funding to assets under management, insurance cover to property development funding.
Know your client
While it may seem a bit harsh, if you don’t ask the right questions then you can’t expect to get the right answers. With mortgage brokers and other investment advisers this is known as “know your client”. If you present a particular scenario to a bank when looking for mortgage funding directly then the bank can only advise you on the details you provide. However, mortgage brokers tend to take an all-round approach and will ask probing questions about your finances and your expectations going forward.
Private banks and niche lenders
While it is starting to change a little, access to the full range of private banks and niche lenders in the UK and globally can often only be unlocked via mortgage brokers. In effect you are utilising the relationships of a mortgage broker with lenders in the UK and across the globe. Many private banks and niche lenders are invitation only therefore in effect they are out of the reach of the general public. However, a well-connected and well-informed mortgage broker will not only open many doors but also instigate some very competitive funding tenders. A good mortgage broker will often save you more than the fees they charge.