What Does A Mortgage Broker Do?

What Does A Mortgage Broker Do?

When you are considering your mortgage options you will likely discover that there are many different ways to find out the information you want and subsequently make any necessary arrangements. One of these options is to use a mortgage broker. But what does a good mortgage broker do for you?

To help answer this we’ve put a guide below of what you should expect.

Know their customer

If a mortgage broker is to do what is fundamentally required of them, that being to give the best mortgage advise suited to the client, they must know their customer. A good broker will ensure that this is paramount to their process and make certain that this is the part of the whole journey that is given the main focus. They will likely use a fact finding questionnaire that will consist of some standard questions however, whilst this will serve in enabling the basic requirements to be gathered a good mortgage broker will use this fact finding exercise to really listen to the client – not simply find out about their current circumstances but also their future plans.

Give an initial indication of your mortgage ability

Before a broker starts to discuss the ins and outs of mortgages with you, such as the potential interest rates available and in turn the monthly payments to expect, they need to establish based on your circumstances if you have a chance of actually getting a mortgage. At this time you would not expect them to be carrying out any credit checks as this should come in to play later in the process however, what they should be able to do is give you an indication based on their knowledge of criteria what your possible chances are of obtaining a mortgage. If all looks to be OK here then yes, now is the time to get a little more in depth with the mortgage terms.

Research how much you can afford

Whilst lenders adopt a fairly universal way of calculating what they deem to be affordable, they all do this in slightly different ways. A mortgage broker will be able to check lenders’ affordability calculators and input the information exactly how it needs to be done to ensure you receive an accurate figure of what they deem to be affordable. Whilst this may enable you to discover what a lender feels you are able to borrow, a good broker will discuss and establish your own budget and affordability. Just because a lender feels you are OK to borrow a certain amount does not mean you will have the same opinion. Your mortgage term will likely also play its part in the cost of the mortgage and a broker will discuss with you the pros and cons of the length of your mortgage.  Ultimately however, regardless of you using a broker or not, a lender will not lend more than they deem affordable even if you have a different view.

Recommend the most appropriate mortgage scheme

When a broker has established your current situation and discussed your future plans with you, they should now be able to recommend the most suited mortgage rate from those lenders that are available based on criteria i.e., there is no point in discussing the market leading interest rate with you if sadly the lender offering this rate cannot assist you based on their criteria. Remember the lowest rate may not be your best option and indeed the scheme offering the lowest cost may also not be the most appropriate if it does not provide any other benefits you require such as the ability to repay the loan early. The length of the scheme will also be taken into consideration e.g., is a 2 year scheme better suited or maybe a 5 year? In addition, they’ll recommend the type of rate such as a fixed or a tracker. Remember the broker should have a great knowledge of the market so should be best placed to recommend how your mortgage is arranged rather than adopt a one size fits all approach.

Corresponds with the lender on your behalf

Your broker should be your one and only point of reference for your mortgage and be on hand to deal with every aspect of your application for you. They will likely have a good support team behind them assisting throughout the process but the broker should hold the ultimate responsibility. They will ensure your application is submitted for you to carry out the initial credit check and all being well here, then proceed with the full application. They should now ensure a smooth process from the start of the application, getting the lender to issue your formal offer and then see it right through to completion. The broker, together with any support team they may have, should continue to communicate with you throughout this process to ensure you are kept well informed. This will involve proactively contacting you when necessary but also ensuring they are on hand to answer any of your questions.

Advising you of your protection needs

When owning property whether this be for your own personal use or as an investment this must be insured. Whilst the rules can be different if the property is leasehold, it will likely be your responsibility to ensure the property is protected. This will be a legal requirement of the lender should you have a mortgage. You may also have a requirement to protect the contents and personal possessions and lest we forget, there is likely a need to protect your ability to pay the mortgage in the event of any unforeseen circumstances. Your mortgage broker should discuss all of these possible requirements with you and where possible also make the necessary arrangements. If they are unable to do this themselves then they should still be able to recommend someone else who can.

What a broker will do after completion

Whilst you would not expect your broker to be contacting you on a regular basis following completion they should remain available at any time for your future borrowing needs and for any questions you may have in regard to your mortgage. They should also make a diary note to contact you again in the future to review your mortgage arrangements especially for when any scheme is due to expire.

Try our mortgage affordability calculator below.

Author's Avatar

Carl Shave

CEO and co-founder

About the author

Carl Shave has been involved in the mortgage & finance industry since leaving education and is one of the co-founders of Just Mortgage Brokers. He has written guest posts and provided journalist comments for companies such as The Times, FT Adviser, Mortgage Strategy, Mortgage Solutions and others, demonstrating his extensive industry knowledge.