Over the last few years, there’s been a big marketing effort on the part of the “go-direct” brands. The irony of this is that actually these brands are not encouraging you to “go direct”, they are encouraging you to use their website to make your decision instead of either actually going direct or going to a proper, human mortgage broker, who can give people professional advice customised to their situation. To see how this works in practice, let’s look at the three different situations.
The “go-direct” brands
The “go-direct” brands are basically, affiliate-marketing sites. That means they get paid a commission for referring people who then go on to become customers. In other words, they work on exactly the same basis as the mortgage brokers they advise you to avoid using. They simply use computer algorithms to try to replicate the knowledge and expertise of a financial professional. Even though many jobs are currently being replaced by computers and there may come a time when artificial intelligence can do as good a job as a highly-skilled human, that time is still far off and as, when and if it does come, the “go-direct” sites are still likely to offer limited options in comparison with going to a human mortgage broker for the simple reason that some companies refuse to work with them for various reasons, many of which revolve around the fact that these sites encourage people to compare deals on headline price rather than looking at the specifics of the offer and the overall value it could provide.
Genuinely going direct
Genuinely going direct can be a perfectly feasible option, if you know your way around the mortgage market. If, however, you don’t you can spend a whole lot of time and energy looking for the best deal and still wind up not finding it or finding it and not being accepted for it. An often-overlooked fact about mortgage brokers is that they will not only make sure that they only suggest deals for which you have a decent chance of being accepted, but they will help to make sure that your application ticks all the right boxes (literally and metaphorically) to maximise your chances of being accepted and they may even have contacts with lenders which they can use to help turn a borderline case into a yes.
Going via a mortgage broker
There are basically two sorts of mortgage broker. One sort charges a direct fee to the client. The other works on commission. Neither sort is right or wrong and neither is better or worse than the other. Both sorts of mortgage broker will be working on behalf of the client and aiming to get them the best, possible mortgage deal. Their continued success depends on having a constant stream of satisfied customers (ideally customers who are satisfied enough to recommend other people). Mortgage brokers are, essentially, the average person’s guide through the labyrinth of the mortgage market. They can be very useful even if you’re “the perfect buyer” and hence in a solid position to find a good deal for yourself. Mortgages may carry relatively low-interest rates (meaning as compared to standard consumer debt) but they are usually for large amounts and hence the difference between a good deal and a great deal can add up to be an awful lot of money over the years. If you already know you are a less-than-perfect buyer and/or you are aiming to buy a more niche property (or to build your own home), then the more you should think about going to a mortgage broker rather than trying to go direct.
Your property may be repossessed if you do not keep up repayments on your mortgage.