The housing market is currently experiencing huge volatility as mortgage rates have recently soared and property prices in the UK have fallen.
One way to tackle these challenges is to find a mortgage broker who can scan the whole market for the best deals.
You could also consider a mortgage adviser, but they usually recommend mortgages from a specific lender, so there is typically less choice.
Finding the best mortgage broker can be tricky, so we’ll run through the 10 best questions to ask before signing on the dotted line.
1. Are you regulated?
All mortgage brokers in the UK should be regulated by the Financial Conduct Authority (FCA).
You can check whether your broker is regulated by looking at the FCA register.
Alternatively, you can search for a mortgage broker via Unbiased, which connects you to the best FCA-regulated mortgage broker for your circumstances.
2. How much do you charge?
You can get a fee-free broker (who makes their money via commission) or choose one that charges a fee.
If you’ll be charged, ask how much and whether this will apply to future remortgages.
Mortgage brokers can be helpful by checking any documents before you apply.
It’s a good idea also to consider the cost of other fees, such as mortgage arrangement and valuation fees, which varies by lender.
3. What’s the best type of mortgage for me?
There are different types of mortgages with various pros and cons.
For example, a repayment mortgage means you pay a monthly amount over an agreed period until the capital and interest are paid off.
With an interest-only mortgage, you only pay off the interest each month and repay the capital at the end of the mortgage term.
These aren’t the only mortgages you can choose from.
Your mortgage broker should be able to recommend the right one for you based on your circumstances and future plans.
4. How many lenders can you access?
If you’re looking for the most competitive deal, a whole of market broker can access all lenders and products in the market, while single-tied ones will only have access to one lender.
Multi-tied brokers typically have access to a panel of lenders but won’t be able to get all deals.
5. How do I need to save to buy my home?
The amount you’ll need to save depends on how much your property is worth and the percentage of that value the mortgage provider is happy to lend (known as loan to value or LTV).
If you’re a first-time buyer, you can get up to 95% LTV, but if you have a bigger deposit, you’ll likely be able to access more competitive deals.
On top of the deposit, make sure you can also pay other fees, such as moving and legal costs.
6. How much can I borrow?
While a deposit will help you buy your home, if your mortgage lender won’t offer you enough, you won’t be able to buy it!
A mortgage broker will assess your circumstances, including your salary, monthly spending and credit history, to determine how much you’ll be able to borrow.
7. What is the interest rate, and will this change?
If you’re going for a fixed-rate mortgage, the interest charged will not change until the mortgage term ends, and you’re moved to a standard variable rate (SVR), which is typically higher.
Other types of mortgages, like tracker mortgages, are affected by the Bank of England’s base rate.
A mortgage broker can advise on the best mortgage type for your needs.
8. Are there any restrictions on my mortgage?
This is vital to ask, especially if you’re considering moving to another property in the future.
For example, is your mortgage portable? If so, you would be able to move your mortgage as is to a new property.
Early repayment charges (EPCs) are also worth asking about as you could get charged for ending your mortgage before the term is up or for overpaying too much.
9. Can you help me with other aspects of the house-buying process?
It’s a good idea to ask whether the broker gets a commission for recommending any products and how much this is.
10. What documentation do I need, and how long will it take to get my mortgage approved?
Mortgage brokers may ask for documentation such as payslips and proof of identity.
By ensuring you have these ready, you can help get your mortgage application processed quicker.
The process can vary depending on your circumstances, but your mortgage broker may be able to let you know how long the process will take.