Mortgage advisor vs broker: What’s the difference?

 

 

There can be a lot to think about when looking to buy a home in the UK. One of the first things that comes to mind is how you’ll pay for it. This is where mortgage advice comes into play.

The question then arises, who should you turn to – a mortgage advisor or a mortgage broker?

The two terms often get mixed up. Although they do similar jobs, they aren’t quite the same. By knowing the difference, you ensure you get the correct support when choosing a mortgage. Let’s break it all down.

What is a mortgage advisor?

A mortgage advisor gives you advice about mortgages. They usually work for a specific lender, such as a bank or building society. Their role is to help you find a mortgage from that one lender.

When you go into your local high street bank, the person you speak to about home loans is likely a mortgage advisor. Their job is to take a look at your income, credit score, and the mount you’re looking to borrow. Based on this information, they’ll then suggest mortgage products from their own company.

They’ll have a strong understanding of their lender’s rules. It can be helpful if you already bank with them and wish to stay loyal, the downside is you don’t get to see what the wider market has to offer.

What is a mortgage broker?

A mortgage broker is more independent. They will work with a range of lenders, not just one. This will give you more options, some brokers will even have access to deals not available to the public.

Ultimately, they’re the middleman between you and the open mortgage market. They’ll take a look at your finances, and search for a deal that suits you.

Some brokers act as “whole of market” which means they are able recommend you mortgage products from almost every lender. Others with only work with a select few of providers.

Pros and cons

Let’s take a look at some of the good and not-so-good sides of each

Mortgage advisor

Pros: They know their lender’s products well and their advice is usually free. This is usually the best route for those wanting a straight path.

Cons: There is usually limited choice, and a strong possibility you may not get the best rate out there.

Mortgage broker

Pros: You’ll have access to a wider choice of deals; they can also find specialist lenders. A mortgage broker will also save you the time of having to shop around.

Cons: Some mortgage brokers charge a fee and may even ask up front. It is also important to bare in mind, not all brokers are “whole of market”.

Which should you choose?

It all comes down to what you need. In the case that you’ve banked with one place for years, you may decide to start with their advisor. They’ve already got your details, and you may get a good deal. However, don’t stop there. It’s always wise to compare.

If your finances aren’t straightforward, maybe you’re self-employed or have poor credit, a broker can help. They usually know which lenders are more flexible.

Even if you have a simple case, it’s worth speaking to a broker, they could still save you money by finding a lower rate.

It’s also important to bare in mind the amount of help you want. Brokers will often guide you through the process. They’ll help deal with paperwork as well as talk to lenders on your behalf.

Do you have to pay?

Mortgage advisors at a bank will not usually come with a fee. Their money is earnt by selling the bank’s products to you.

Some brokers will charge a fee, but not in all cases. Some will be paid by the lender when the mortgage is taken out, some do both. It’s smart to ask how they get paid before signing any agreements.

They are to be clear with you about fees.

What about regulations?

Advisors and brokers have to be authorised by the Financial Conduct Authority (FCA). This means they are bound by rules ensuring they give proper advice.

If something were to go wrong, you would be able to complain to the Financial Ombudsman.

Make sure whoever you deal with is on the FCA register, you can verify this online.

Get expert advice

Selecting the right mortgage is a big decision, choosing who helps you find it is just as important. Mortgage advisor’s give advice based on one lender’s deals. Brokers offer a wider view of the market.

If you’d like more choice or your circumstances are not straightforward, a broker may be worth the cost.

Whichever you go for, always ask the questions. Ensure you understand what you’re agreeing to. Remember, this is your mortgage, your money, and your home. You deserve advice that works for you.

Let Regulated Advice match you with a mortgage advisor for expert advice.