If you’ve finished saving a deposit and you’d like to get the ball rolling to buy your own place, one of your first steps will involve getting a mortgage in principle.
In short, a mortgage in principle (also known as an agreement in principle) is an agreement from a lender to say that if you find a property that you’d like to buy, they’ll probably give you the loan required to go ahead and make the purchase.
One way you can get a mortgage in principle is by hiring a mortgage broker. They’ll compare dozens (sometimes even hundreds) of mortgage deals from across the market before highlighting the ones most suitable for you.
Wondering who to choose? Here’s how to find a mortgage broker you can trust.
Are there different types of mortgage broker?
There are several different types of mortgage broker but most can be divided into the following two categories:
Tied mortgage brokers are literally tied to one mortgage lender. Usually, this type of broker is employed by the lender in question and will only offer you mortgage deals from that particular lender. This means you won’t see the full choice of mortgages available.
Independent mortgage brokers
Unlike tied brokers, independent mortgage brokers will compare a wider choice of mortgages, potentially getting you access to a much better deal.
Some independent mortgage brokers will charge you a fee for their services. Often, if they charge you a fee this means they won’t earn a commission from whichever lender they recommend to you. This isn’t always the case so it’s worth checking with them first.
Most independent mortgage brokers are free for home buyers to use. If your chosen mortgage broker doesn’t charge you a fee, this probably means they earn a commission from lenders. Again, ask the broker in question for clarification.
To learn more about buying your first home, take a look at Can’t Swing a Cat’s first time buyer blog section.
Where is the best place to find a mortgage broker?
Here are a few ways to find a mortgage broker…
Your bank will have its own mortgage broker(s) and they’ll be able to guide you through the home buying process from start to finish. However, remember that these brokers will be tied specifically to your lender and therefore you could potentially miss out on better deals elsewhere.
Estate agent brokers
Estate agents will usually have mortgage brokers they work closely with. Sometimes these brokers will work from an office on the estate agents’ premises. Other times they’ll work elsewhere but will strongly be recommended by the estate agents.
If an estate agent broker compares mortgages from across the market and they aren’t tied to a specific lender, they’ll fall under the independent mortgage broker category.
Digital mortgage brokers
As you might have guessed, you’ll communicate with digital mortgage brokers online rather than face to face. Online chat and email are very common but some digital brokers will also speak to you over the phone if you wish.
If your online mortgage broker isn’t tied to one lender and they compare deals from across the market, they’re also considered an independent mortgage broker.
…So who did I use?
After a bad experience with my estate agent’s mortgage broker, I went on to use an online mortgage broker when buying my apartment back in 2017.
I used the digital mortgage broker Habito and they come strongly recommended by me. You can read my Habito review here.
If you’d like to use Habito as your mortgage broker, sign up with my refer a friend link and you and I will each earn a £50 John Lewis voucher on successful completion of your mortgage.
How can you tell if you’ve found the right mortgage broker?
When looking for a mortgage broker, use your intuition. If you meet a broker in person or you start talking to one online and you get ‘bad vibes’ from them, trust your gut and consider looking for a different broker instead. I know this might sound a little woo-woo, but if you don’t trust your broker then there’s probably a reason for it.
You need to find someone who will guide you through the whole process, happily answer all your questions, and explain any complicated parts to you without making you feel like you’re a pain.
I hated the very first mortgage broker I saw. He was like character from Wolf of Wall Street and was very pushy and cocky. Interestingly, my parents (who came with me to the meeting for moral support) thought he was fine, but my suspicions were confirmed when I told him I was going with a different mortgage broker and he threw a royal tantrum.
I eventually ended up with Habito and one thing I liked about my broker there is that whenever I started stressing out or worrying about the home-buying process, he reassured me that it’d all work out okay. To me, all the problems I was experiencing were brand new but to him, they were fairly standard issues that occur when buying a house.
Thankfully, we overcame all the issues in the end and in December 2017, I picked up the keys to my first home!
To learn more about mortgage brokers, here are 3 reasons to use a mortgage broker rather than asking your existing bank for a mortgage.