Mortgages

What does a mortgage broker do?

I could mention lots of things that a mortgage broker does in terms of making applications and dealing with lenders, but the most important thing from a client perspective is getting advice.

You might not be aware that if you’re dealing directly with a lender or a limited panel mortgage broker, you might not get much advice. A lot of the decision-making is really on you, which can be quite daunting.

But as an advisor with a comprehensive range of mortgages, we give you advice and, of course, we walk you through that journey and the most suitable products. We’ll take you through the application process and deal with the lender on your behalf, keeping you updated throughout.

What’s the difference between going to a mortgage broker like Heron Financial versus your local high street lender?

I’m not sure if anyone’s been in a bank branch recently, but it’s one of the most depressing places you can possibly go. You’d need a lot of time to trawl down to your local branch and get the information you need, and obviously if you bank with Halifax, for example, they’re not going to tell you about the deals next door at Barclays.

A broker will always work for you. We’re looking to get your mortgage paid off as fast as possible. I’d always want the money in my client’s pockets rather than the bank’s pockets, so our advice is focused on keeping costs down.

Criteria is also a huge factor. If you go to a lender they may only talk to you about their products and their criteria. A broker could look across the whole market and structure things specifically for you.

For example, if you can’t borrow the amount you want to borrow, your bank may not offer a guarantor setup – or what’s often called a Joint Borrower Sole Proprietor mortgage. Brokers offer lateral thinking around how to help you get the right outcome. A bank is fundamentally just selling you their products whereas you are our client and your needs come first with us.

What services does a mortgage broker offer?

As things stand, things are improving [podcast recorded in June 2024]. We’re seeing more products land every single week. But that brings complexity with it, and lots of decision making.

As well as having to look at lots of different lenders, there are also schemes we need to explore – for example, the Own New scheme, Shared Ownership and Discount Market schemes. Your broker is going to assess these and give you the right options. We’re also then going to get into the nuts and bolts of the mortgage process.

We will arrange an Agreement in Principle, getting you a certificate to present to an estate agent – or a house builder, if you are buying a new build. That’s often a prerequisite, these days.

And, beyond that initial process of getting you that mortgage and getting you into your home, a good broker will stay in touch with you and periodically review your situation. We’ll talk to you about your remortgage when that’s due in a few years time, and again repeat that process of looking at the market as a whole – not necessarily sticking with one particular lender.

There are also other services such as advice on life insurance, income protection and critical illness cover. You might not have had that conversation before. So it’s not just about the transaction and your goal of getting the mortgage paid off as soon as possible. We could also extend out to potentially buy investment properties or other things.

We’re seeing a lot of debt consolidation at the moment under the cost of living squeeze. More people are looking at consolidating debts onto a mortgage and a broker is really well placed to advise you. We don’t just put all your debts onto the mortgage: sometimes that makes sense, and sometimes it doesn’t.

If you’ve got money on 0% credit cards, for example, it makes no sense to consolidate that. We could even look at alternative forms of finance. Would a personal loan actually fill the gap rather than paying every debt over the long term?

Banks are reluctant to get involved in the more complex areas of advice, but this is where a broker will really hold your hand. It’s about what’s right for you, not for the bank.

When should I see a mortgage broker? Is there a specific time in that process?

As soon as possible. If you’re looking at moving, talk to us as early as you like in the process. It’s just so important to understand what you could do.

I’ve been a broker for 20+ years now and the two most commonly asked questions are ‘how much can I borrow?’ and ‘how much is it going to cost?’ We deal with that straight off the bat.

If you already have a property, typically we’ll pick up with you around six months from your product ending. That’s the earliest point at which you could refinance, and we’ll advise you depending on the market conditions at that time. If you’re looking at doing some home improvements or debt consolidation, just come to us. We could at least show you what’s possible so you can make an informed decision.