First time home buyers in particular are often faced with the question of whether they should work with a mortgage broker or directly with a bank or other lender. There is no one-size-fits-all answer to this question. It depends on your particular circumstances. Below we’re going to look at both sides of the question: Is it better to use a mortgage broker or go direct?
About Direct Lenders
A direct lender is a bank, credit union or other institution that uses its own money to fund your mortgage. When you work with a direct lender everyone you encounter during the process works for that financial institution. Every mortgage product you will be offered is one that originates with that particular lender. In other words, you will not be offered a range of mortgage products from different lenders to choose from.
The advantages of working with a direct lender are simplicity and the potential to save some money. Simplicity because everyone you talk to works for the same lender. They’re all on the same page and they’re all familiar with the mortgage products they’re discussing. The potential to save money comes from the lack of a middleman. No broker means no broker fees. However, because your choice of mortgage products will be limited you may wind up paying more in interest, which over the life of the loan, may effectively negate any savings from not having to pay a broker fee.
About Mortgage Brokers
The mortgage broker is an intermediary. They do not fund mortgages themselves, instead, they act as a go-between connecting borrowers with lenders and advising borrowers of the plethora of different mortgage products available. Because they are not bound to promote the products of a specific lender they are free to give unbiased advice that could wind up saving you money in the long run. The broker is also an invaluable assistant who can help you navigate the blizzard of paperwork associated with mortgages.
Get in Touch With Mortigo
As a long-established and trusted broker Mortigo can help you find the mortgage that’s exactly right for you. Give us a call on 0808 164 1616 to learn more.