First-time buyers: Do you need a mortgage broker?

Whether it’s your partner, your mum or your bestie, it’s helpful to have a support system to lean on throughout the home buying process – especially if it’s your first time. And a mortgage broker could be a useful addition to the squad.

A mortgage broker trawls through available deals to link you up with the right mortgage lender for you. It’s not compulsory to use a mortgage broker, and there are many ways you can lock down the right mortgage for you. So let me take you through the pros and cons of speaking with a human mortgage broker vs using an online version vs doing the darn thing yourself.

Speaking with a human mortgage broker

What’s good

A mortgage broker will do the heavy lifting of finding the right mortgage for you based on your personal circumstances, income and more. And they’ll use their years of experience to make the mortgage application on your behalf, which could give it a boost in the eyes of your mortgage provider.

Having a real human to touch base with can be invaluable, especially when faced with unexpected or complex issues. My broker became like a home-buying counsellor, and continues to check in with mortgage rate updates; so a huge support during and after the home-buying process.

Potential downsides

All this lovely support doesn’t come for free. Mortgage brokers will charge a fee in a variety of ways: a fixed fee, a percentage of the loan or commission from the mortgage lender.

Choose an option that works for you and your budget. Your broker should be totally transparent about any fees in advance. Not all mortgage brokers cover the whole market, which means they may only have access to limited mortgage options. Full market is typically the way to go, unless you have very specific mortgage requirements.

What to look for

Mortgage brokers or advisers must complete a Certificate in Mortgage Advice and Practice (CeMAP), which is a qualification approved by the Financial Conduct Authority (FCA). So, look out for these when researching potential brokers.

Online mortgage brokers

What’s good

Online mortgage brokers are ideal for people who don’t want to DIY but typically throw their phone across the room when they see a call come through.

An online mortgage broker will compare mortgages and apply on your behalf – all via a digital service like a website or app. You may get matched with a personal mortgage expert, but comms will typically all be via live chat or some kind of online portal or app. Online brokers aim to make the process fast and efficient, and often come with a sophisticated dashboard to help you easily track and manage your mortgage application – as well as potential additional tools and calculators.

Potential downsides

Similar to human mortgage brokers, online brokers will likely charge a fee, even if it’s commission from the mortgage provider. However, any fees you personally might incur are typically cheaper than those charged by a traditional mortgage broker.

Being a digital-only service, online mortgage brokers may offer less personalisation than human brokers and it may be harder to access support for a particularly complex or nuanced issue. Again, unless you have very specific requirements, ensure your online broker covers the whole market, as some may only have access to limited mortgage products.

DIY

What’s good

The do-it-yourself model could be a good option for your type-A personalities, planners and spreadsheet lovers – or, if you CBA to fork out a broker fee. Taking such a hands-on approach to finding the right mortgage gives you tons of oversight over the market and the rates, products and terms that are available. And, essentially, you automatically have full-market access (aside from a few deals only available through brokers). Plus, with no middleman, you’ll have direct contact with your mortgage provider.

Potential downsides

While I don’t doubt your skills as a researcher, being a first-time buyer you’re essentially learning on the job, which could mean you miss an important detail or mortgage product you didn’t know existed. So it’s up to you to be super thorough.

Check in advance how your mortgage provider likes to communicate. Some providers will want you to manage everything via an online portal, for example, which could be frustrating if you prefer handling queries over the phone. These kinds of portals or chatbots can also be quite rigid if faced with all the inevitable weird and wonderful stuff that can cause roadblocks along the way.

About the author

Louise Bastock is an editor at Finder, covering a broad range of personal finance topics, from financial wellness to first-time buyers. As video manager, she’s also responsible for presenting and producing the UK’s video content across multiple channels, including YouTube, TikTok and Instagram.

This article originally appeared on finder.com/uk and was syndicated by MediaFeed.org.