Mortgage brokers

[Paddybare]

Sorry for a potentially daft question but just want to get the process of using a broker clear in my head. Can anyone tell me if I’ve got this right or not?

So;

Firstly have a conversation with a broker, discuss our circumstances, they advise on max purchase price and a potential mortgage product, providing an example of what repayments and term could look like.

We then make an offer on a house, get that accepted and then ask the broker to make the full mortgage application.

The application then goes to the lender.

Do we then ever deal directly with the lender or do they just make a mortgage offer or not via the broker?

Is it this straightforward or are there appointments with the lender directly for us first before an offer is made?

Many thanks and sorry if this is basic stuff.

If you go through a broker then you don't need to deal with the lender directly until after you have bought the property.

You don't have to go through a broker though and can approach lenders directly if you prefer. It's just that most FTBs prefer the convenience of using a broker and most are free to use (they get their commission from the Lender).

You've got it about right.

We've just sorted out a mortgage through a broker - she was brilliant. All done on zoom too.

When we did it (for a remortgage, not house purchase), the initial application was through the broker but then subsequent forms / communication were direct with us (ie broker not involved). Also once you get a mortgage offer (ie they agreee they'll give you a mortgage) it's usually valid for six months, so you might be better off having that in place before you start house hunting as you'll be able to move quicker once you se somewhere you like...

I had a mortgage that was potentially difficult to get due to my age . My broker searched a number of lenders which saved me approaching them all and managed to get me a good deal . I paid a fee of about £550 and she got commission from the lender and insurance company. It was worth it for the stress she took out of the whole process.

Thanks all, so the grilling that I’ve heard about regarding monthly spending, would that be the broker doing that (if I use one).

No one "grills" you. The broker will discuss your income & expenditure which you then back up with bank statements (usually the last 3 months). No one is interested if you spend £10 a month on the slots or £50 getting your nails done.

And a mortgage offer is only produced after a mortgage application has been made on a specific property that the lender has had valued.

And brokers get told a day or two in advance when lenders rates are going to change. I've organised a remortgage for a client and the rate has changed 4 times since. Reduced by 0.6% during the past 2 months.

>Firstly have a conversation with a broker, discuss our circumstances, they advise on max purchase price and a potential mortgage product, providing an example of what repayments and term could look like.

You missed a stage; the broker will get an Agreement in principle from the lender you have chosen which usually covers the cost of your intended purchase and sometimes a little bit more. Estate agents will want to see this when you submit your offer.

>We then make an offer on a house, get that accepted and then ask the broker to make the full mortgage application.

You missed another stage; pay the broker a fee which is the bank’s fee. Usually between £500 and £1500. Some lenders offer cash back when the mortgage is complete.

Depending on whether you go for a paid or free broker, a fee may also be payable to them. I think that happens upon completion, but don’t quote me on that, check for yourself.

The only direct contact with the lender will be the offer that comes through the post.