Getting a mortgage is one of the biggest financial decisions you’ll make, so it’s important to get it right. A professional can help you navigate the mortgage market to find the right deal. Here’s what you need to know.
What does a mortgage adviser do?
A mortgage adviser is a professional who searches the mortgage market for you and recommends the best deal for your needs.
They’re also called mortgage brokers, but both do the same job.
They’re either independent or ‘tied’ to a mortgage lender, where they might be restricted to certain deals or providers.
To give you mortgage advice, they must have completed a qualification called a Certificate in Mortgage Advice and Practice (CeMAP), which is approved by the Financial Conduct Authority (FCA).
Make sure the firm you choose is regulated by checking the FCA registerOpens in a new window
Do you need a mortgage adviser?
Independent mortgage advisers have a wide knowledge of the mortgages available from different lenders and their lending criteria. They can search the market and recommend the best deal for you.
To find these deals on your own involves a lot of research and talking through your circumstances many times with different lenders.
An adviser might also be able to find a deal you can’t find on your own. They can also improve your chances of being accepted for a mortgage as they’ll know which lenders are best suited to your circumstances.
They can be particularly helpful if:
you have a small deposit
you haven’t been with your employer for long
you’re self-employed.
Risks of not getting mortgage advice
When you get regulated mortgage advice rather than doing research on your own, your mortgage adviser will recommend an appropriate mortgage for your needs and circumstances.
If the mortgage later turns out to be unsuitable for any reason, you can make a complaint. If necessary, you can take your complaint to the Financial Ombudsman ServiceOpens in a new window This means you automatically have more rights when you take advice.
Not getting advice means you have to take full responsibility for your mortgage decision.
If you don’t get advice, you could end up:
with the wrong mortgage for your situation
applying for a mortgage that doesn't fit the lender’s lending criteria.
When to see a mortgage adviser
It’s important to see an adviser at the start of your mortgage journey, whether it’s your first mortgage or you're looking to remortgage. It will save you a lot of time and effort in the long run.
It’s a good idea to speak to a few different firms to see what’s on offer and to compare fees.
There are two main types of mortgage adviser
Mortgage advisers connected directly to a lender
- They usually only recommend mortgages from a specific lender.
- They can be cheaper as you avoid up-front broker fees.
- Some lenders will have exclusive rates or discounts only available for their current customers.
- If you’re remortgaging and want to stay with your current lender, using their mortgage adviser might work out best for you.
Mortgage brokers or independent financial advisers
- They can offer mortgages from lots of different lenders and often know what criteria you need to meet to be accepted.
- They will deal with the lender on your behalf.
- Some brokers are ‘whole of market’ and they can offer a wider range of products. But they might not cover everything. If you need a specific mortgage, like Buy-to-Let or Interest-only, you’ll need to find the right adviser for your needs.
- If you’re shopping around for a mortgage, it makes sense to choose a broker or adviser, particularly one who provides a ‘whole of market’ service.
Always compare deals including fees and charges to choose the best option for you.
Other reasons to use an adviser
They’ll check your finances to make sure you are likely to meet the individual lender’s lending and affordability criteria.
They often help you complete the paperwork, so your application should be dealt with faster.
They can adjust your borrowing if the amount changes as a result of negotiations.
They’ll help you take all the costs and features of the mortgage into account, beyond the interest rate.
They should only recommend an appropriate mortgage for you and will tell you which ones you’re likely to get.
Finding a mortgage adviser
You can find a regulated mortgage adviser on these websites:
It’s also a good idea to choose a firm that’s a member of the Association of Mortgage Intermediaries (AMI)Opens in a new window
Make sure they are regulated by checking the FCA registerOpens in a new window
Can you speak to a mortgage adviser for free?
Mortgage advisers might charge you for their service, depending on the product you choose or the value of the mortgage. This charge could be a flat rate or hourly rate, or a percentage of the amount you borrow. Others will be free but the adviser receives commission from the lender.
Some charge fees and receive commission, but you should be told beforehand how an adviser will be paid and all the costs involved in providing the advice.
The fee can be added to the mortgage, but you have to agree to this first and you’ll pay interest on the fee as well as the rest of the mortgage, until the whole amount is paid off.
Most mortgage advisers won’t charge for your initial conversation, but always check if you’ll pay for this. If it’s free, you can speak to more than one before deciding.
Once hired, your adviser will make recommendations and they must give you a mortgage illustration document.
Mortgage illustration document
The mortgage illustration document outlines a lot of the details about the mortgage you’re being offered. This includes:
the frequency and number of your repayments
any fees or charges you have to pay up-front to get the mortgage
the overall cost of the mortgage, including interest, over the full term
the rate of interest or Annual Percentage Rate of Charge (APRC), and the type of interest (fixed or variable)
what happens if interest rates rise and how this affects your repayments
if there are any special features of the mortgage, such as the ability to overpay or underpay
if you can make overpayments to the mortgage and any penalties for doing so
what happens if you don’t want the mortgage anymore
the length of the reflection period (at least seven days, or more depending on the lender).
This helps you understand what you’re agreeing to and is an easy way to directly compare mortgage offers.
This document is usually provided with a suitability report, which lists why the mortgage adviser has decided this product is suitable for you.
