Will you ask an expert?

Many people choose to use a bank or building society over a mortgage broker simply because they prefer to stick to what they think they know; some may even search the World Wide Web (it’s an age thing!) for a mortgage deal and apply directly to the lender. In either case it may not be to their advantage, even if successful they may not be getting the best deal on the market and in many cases, they probably do not meet the criteria for the advertised rate or lender they have researched, but alas it does not stop them from trying.

All the above aside it is not just about a good rate and cost when applying for a mortgage, of course they are important features, but using a credible mortgage broker should ensure a client gets these as a matter of course. What is more important is the advice and support the client gets, mortgages are not a one size fits all product, they require an understanding of many factors such as requirement, client circumstance, risk profile, credit history and so on and so on which, taken as a whole form the basis of what is hopefully a choice of lenders and lender products. 

A good broker will explain the various types of rates available and associated fees and then advise the most appropriate lender and product for the client, and it does not stop there, they will also provide their ongoing support throughout the whole mortgage process, talking the client through the legal process, explaining the stages and various documentation required along with answering any lender queries on the client’s behalf. Good brokers are professionals and experienced within their field whether it be residential mortgages, Buy to Lets, Help to Buy or Equity release. They will also have an awareness and understanding of the constant regulatory rule changes and taxation, not to advise the client obviously but certainly to help explain what it means to them (it is ironic then that any man or woman off the street can obtain a mortgage directly, but you need to be qualified to advise them on one) and they will have the knowledge and experience to find a solution that is right for the client.

 These are the reasons I firmly believe that every mortgage applied for should be submitted by a broker, there are just too many variables and unknowns when committing to a long-term debt in addition to the ever-changing processes of the application and rules and regulations. It is not a question of whether we should use a broker but more a case of we need to use a broker. 

Brokers within our industry spend thousands of ￡’s in marketing this message, along with LinkedIn and other social media platforms you will see posts, blogs/vlogs, Joe Bloggs, all advocating why we should use a broker when applying for a mortgage and rightly so.

What is important for us all to understand though is brokers are not Jacks of all Trades; you cannot be all things to all people. It is highly unlikely that even the best of brokers will be knowledgeable enough to deal with every enquiry that hits their desk regardless of how qualified they are, and this is where specialism counts.

Specialist lending is an oft overused phrase within our industry as it is applied to almost all forms of borrowing, yet the role of a specialist broker is exactly that. 

Brokers such as those dealing with bridging, commercial or development funding are by definition specialists, that is not to say they are any more special or superior in what they do (a common misconception amongst brokers) but they are experts in all things bridging, development and commercial. These areas of lending are niche and require a completely different skill set to that of brokers in the residential mortgage space. 

The types of deals tend to be far more complex in both client and asset class and can often require larger sums of borrowing than your typical residential mortgage. Lender criteria is often bespoke and quirky and not something that can be found on any sourcing system. LTV’s will vary depending upon asset class even with the same lender, rates are frequently priced on a deal-by-deal basis and the legal process also differs greatly from lender to lender and that of standard residential lending, knowledge and experience are for the most part all a specialist broker can rely upon when structuring a deal meaning, the specialist broker really does need to know their stuff.

Take for example a development loan, the very nature of a development loan is making a lending case for something that does not even exist yet (in most cases). This requires a good deal of knowledge and expertise, in the first instance you need to know what is involved with a development before you can confidently submit a solid case to a lender, how else will you know what to ask the client for? This can also be said of heavy refurbishment bridging, development exit bridging, portfolio BTL’s, trading business or commercial investment loans the list goes on, they are all complex within their nature.

There is a clear distinction between a mortgage broker and a specialist mortgage broker, and we should all know when to get help with certain types of enquiries yet too many brokers still insist on ignoring their own advice and ‘having a go’ instead of letting someone who knows what they are doing do it for them. In doing so they are gambling with their client’s application and their own reputation, if you do not know what you are doing there is no shame in getting help, after all your client gets the right result, you get more time to deal with your day to day enquiries and above all, you get paid for the privilege.