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FAQs

Is it better to go with a mortgage broker or bank? ›

a Bank. A mortgage broker can offer a wider array of options and streamline the mortgage process, but working directly with a bank gives you more control and costs less. Kate Wood joined NerdWallet in 2019 as a writer on the homes and mortgages team.

Working with a mortgage broker can potentially save you time, effort, and money. A mortgage broker may have better and more access to lenders than you have. However, a broker's interests may not be aligned with your own. You may get a better deal on a loan by dealing directly with lenders.

The answer to this question is yes you can use multiple brokers to act on your behalf, but the problem is, it might not help you get the mortgage you want and, in some cases, can prevent you from getting a mortgage altogether.

Why Use a Mortgage Broker? Brokers have a success rate of over 90% that we will secure a better interest rate and mortgage terms than any individual working on their own.

Cons of Using a Mortgage Broker

A broker might not have as much negotiating power as you might with a lender with which you have an existing relationship. Some brokers could favor working with certain lenders, leaving out others that may offer you a better deal.

Brokers charge fees for a multitude of services, such as consultations, delivery, purchases and negotiations. Before you start working with a mortgage broker, you should ask for their costs and confirm this in writing, as the pricing models can vary from one broker to the next.

When you go direct, it's up to you to compare the various mortgages and, eventually, settle on the best deal. However, mortgage broker advice is extremely beneficial as you are protected. Essentially, they have a duty of care to you and must justify why they believe this mortgage is suitable and in your best interests.

The short answer: as soon as you've got a property goal. The longer answer: whether you're scoping out your options, have a long-distance goal in mind or you're ready to enter the property market (like, yesterday)… chances are you'll benefit from having a chat with a mortgage broker.

Mortgage brokers will offer advice and guidance throughout the process and will also act as your advocate with the mortgage lenders, making it less stressful and increasing your chances of securing a mortgage. Mortgage brokers can also sometimes get very good deals, better than you could get going direct to the lender.

L&C Mortgages

It is one of the largest and best-known national mortgage brokers, offering a whole-of-market view with no fee.

How many mortgage brokers fail? ›

50% of new-to-industry brokers fail in the first 18 months.

However, not all mortgage brokers have access to every lender out there. Some may only collaborate with a select group of financial institutions, limiting your options. When searching for a broker, it's crucial to ask about their lender connections.

According to Zippia, a provider of online recruitment services, there are more than 25,510 mortgage brokers currently employed in the US – 32.5% of which are women and 67.5% men, with an average age of 44 years old.

They normally receive a 1% origination fee when they package and sell the mortgage on the secondary market. They also receive closing costs and any points less expenses. Many banks will also service the mortgages they sell and receive a fee for doing so.

It's also important to make sure you're comfortable with the company that's originating the loan. Although many parts of the mortgage process are the same across all lenders, there are some differences that can affect the fees you are charged and the service you receive that are worth considering when you shop around.

Your lender already knows you, so approval may be easier

In some cases, having an established relationship with the lender could make it more likely you'll be approved for the loan. Since you're an existing customer, the bank will be able to see your past habits.

They will look at lots of factors to decide whether you are eligible for a mortgage. These include your finances, any debts, your credit history, how much you earn and how much you spend. It's not good for the lender or the borrower if a mortgage is given to someone who can't afford it.