What is a Mortgage Broker?

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What is a Mortgage Broker?

A Mortgage Broker is a trained professional who will act as an intermediate party between a borrower and lenders or mortgage providers, a broker will both initiate the loan application and process the necessary paper work.

A mortgage brokerage primarily makes its money through what’s known as a procuration fee or commission which comes directly from a lender for effectively setting up a business deal.

However, there are some brokers who may charge a fee for a quotation and for their professional and individual advice. In addition to this they may receive extra commission for arranging the purchase of partner products, such as home insurance or life insurance.

To browse through the definitive UK mortgage broker directory, see our Mortgage Brokers section.

There are a number of advantages of using a mortgage broker to set up a mortgage, primarily that they will have experience and knowledge of the vast number of options that are available across the mortgage market as well as possibly knowing vital details about the quality of service a borrower can expect to receive from particular lenders once a mortgage loan has been purchased.

A brokerage may have access to mortgage options that are not available through comparison websites or direct from lenders. In addition to these benefits, a broker will be able to provide a borrower with personalised mortgage advice and may give them several options that may not have been taken into consideration if the process was undertaken alone.

Mortgage brokers are currently experiencing the strain of the credit crunch in similar ways to mortgage lenders in that the housing market in its present state has resulted in fewer people buying property and therefore less demand for first time mortgages.

In addition to this, the interest rates are currently at an all time low, people may be requesting to know their possible options from a mortgage broker on refinancing or changing mortgage plans to benefit from lower monthly repayments yet not making any changes effectively wasting the mortgage brokers time and leaving them without their procuration fees.

A website such as Mortgages.co.uk gives a consumer a comparison of many of the products available on the market allowing a self-search of mortgage companies and various plans, in addition to this, initiations with a highly specialised and experienced team of mortgage brokers who will provide personalised advice on mortgage options will also be arranged combining the best of both options.