Mortgages are available from a number of different sources. There are specific mortgage brokers as well as banks, building societies and other financial institutions, all fighting to get your custom. This is because they make money out of it and so they all want you to sign up with them. It is now common to see advertisements for companies who want you to change your mortgage supplier and who are willing to pay the costs associated with this for you. It is always worth questioning why companies are willing to do this. It isn’t because they truly value you as an individual, it is because the more people who have their mortgage with them, the more money they make. However, it can also be beneficial to the borrower as repayments can decrease or more flexible terms introduced.
A mortgage broker has access to mortgages being offered by a wide range of financial institutions. They can compare offers for you and work out which would be most beneficial to you personally in your situation. Obviously they have to make their own money and so they charge a fee for their services. However, they do save you time and possible confusion by searching through a large number of possible solutions for you. It is vital that you ask exactly what the broker’s fees will be before you commit to anything so that you can decide whether you feel that a better value loan in the long term is more beneficial than a larger outlay in the short term. These brokers generally do a good job and 50% of all mortgages taken in the UK stem from a mortgage broker.
A mortgage banker is someone who works for a bank and sells mortgages. This works on the same principle as a bank which also provides mortgages. As these institutions are generally nationwide they tend to have set interest rates and charges and do not deviate from them. This means that they offer more stability in terms of how much it will cost you. In addition to this, the company where you took the mortgage out is the company who you will continue to deal with for the life of your mortgage. With a broker, once the deal is finalised you then deal directly with the loan provider and do not have further contact with the broker.