Mortgage Broker vs Bank

Which is better?

If you’re looking to purchase your first house or move houses, you have the choice of speaking to a bank directly or using a mortgage broker. Both come with their own set of advantages and disadvantages.

What’s the difference between a mortgage broker and a bank?

Bank or Credit Union

A direct mortgage lender like a bank will be the one who actually funds the mortgage. They will only have access to the mortgage products that are available at their specific bank.

Mortgage Broker

A mortgage broker doesn’t work for any specific financial institution and will have access to a panel of lenders. A mortgage broker will compare rates and terms with the aim of finding their client a mortgage that fits their goals best.

In return for their services, a mortgage broker will charge a broker fee.

Why use a Mortgage Broker when they charge a fee?

A mortgage broker like ourselves, we always have the client’s best interest at the forefront of everything that we do. We have access to a large panel of lenders, some who specialise in different areas.

Therefore, we will search our panel of lenders to find you the best rate and term based on your circumstance.

Whereas if you weren’t to use a broker, you will need to get in touch with lenders and submit the supporting documents that they need in the correct format. If you were to submit supporting documents incorrectly or miss a document out, it can lead to your application being rejected or taking longer to complete.

There are less than 4,400 residential mortgage products currently available in the UK across around about 100 mortgage lenders.

In conclusion, yes you will be paying a mortgage broker fee but they will be doing all the hard work for you, making the process as stress free as possible for you and you will be relying on their expertise and knowledge. Additionally, at Amplo Mortgages we will liaise with your estate agent and solicitors on your behalf as well as chasing lenders to get an update on your case and find out where your application is up too. 

What if I have a more ‘complicated’ situation?

If you have a more complex financial situation such as a history of bad credit or ‘non-standard’ income – a specialist mortgage lender may be the solution.

A good mortgage broker will have a thorough knowledge of specialist lenders who they will be able to approach. In some cases, specialist lenders may only work with brokers and won’t deal with consumers directly.

A bank will have criteria that you need to fit in and if they don’t cater for your situation then you need to find another bank that does – leaving you with the stress of trying to find a lender who will be able to offer you a mortgage.

Can a mortgage broker be able to help me with more than just a mortgage?

Some mortgage brokers may offer additional services. For example, here at Amplo Mortgages and Financial Solutions, we can also arrange protection insurance (life insurance, critical illness and income protection) and home insurance.

Our clients have found this highly useful as they have everything that they need under the same roof and once their home purchase is completed, they have peace of mind knowing that everything is protected and they will have one point of call for multiple policies or applications.

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4,400 mortgage products static source: