Do you really need a mortgage broker?

Host: Pradesh

Guest: Ifthikar Muhammad, Mortgage Advisor & Experienced Accountant

Introduction

Pradesh: Hello and welcome back to another episode of Let’s Talk About Mortgages. Today, we’ll explore:

• Who mortgage brokers are
• Whether we really need them
• The impact of artificial intelligence on the mortgage advisory process

Joining me is Ifthikar Muhammad, a mortgage advisor and accountant with over 10 years of experience.

Q&A Session

Q1: Why do we need a mortgage broker?

Ifthikar: Your thinking isn’t wrong, but it’s not entirely correct either. A mortgage broker’s primary job is to get you the right mortgage, not just any mortgage.

If you go to your bank, they will only offer their own products. These might not suit your needs, for example:

• You may want an offset mortgage because of your savings.
• Your bank may not provide that option.

A mortgage broker can walk into any bank and recommend the product that best suits your circumstances. They also keep you informed about interest rate changes and proactively help you switch banks if necessary.

Q2: What else does a modern mortgage broker do?

Ifthikar: Today, brokers provide holistic advice, including:

• Life insurance
• Home insurance
• Solicitor recommendations
• Property surveys

They connect you with the right professionals based on your specific needs, making the process smoother.

Q3: Will I get a special rate with a mortgage broker?

Ifthikar: Usually, brokers will secure the best deal available in the market. Sometimes, they even have access to special deals not available directly through banks.

Q4: Can a mortgage broker guide me through the entire process?

Ifthikar: Yes, many brokers today offer end-to-end support, especially for first-time buyers. They can:

• Advise on mortgage applications
• Help with solicitors and surveys
• Provide handholding through technical or unfamiliar questions

However, not all brokers offer the same level of service.

Q5: Why is insurance important during the mortgage process?

Ifthikar: Two types of insurance are crucial:

• Home Insurance: Mandatory from the time of exchange. Covers property damage.
• Life Insurance: Not mandatory, but strongly recommended to protect your family in case of death.

Other insurances like critical illness or income protection are optional but worth considering.

Q6: After my mortgage deal ends, do I need a new broker?

Ifthikar: Not necessarily. A good broker will contact you before your deal ends and advise on your next steps. They can help you remortgage at the optimal time, considering rising or falling interest rates.

Q7: Are mortgage applications guaranteed?

Ifthikar: No, final approval is always subject to underwriting. Brokers can advise and prepare your application, but uncontrollable factors may still affect approval.

Q8: How does communication with underwriters work?

Ifthikar: Communication depends on the bank:

• Sometimes directly with underwriters
• Sometimes via a bank intermediary

The broker ensures clear, accurate communication to address any queries.

Q9: How do mortgage brokers differ from price comparison websites?

Ifthikar: Comparison websites show available deals, but they cannot tell you if you actually qualify. Brokers assess your personal circumstances, including:

• Employment status
• Overtime or commission income
• Credit history

This ensures you get a mortgage you can realistically obtain.

Q10: How is artificial intelligence affecting the mortgage industry?

Ifthikar: AI can:

• Analyze price comparison data based on your circumstances
• Answer common questions

However, the final recommendation must come from a licensed broker, as required by the FCA. AI assists, but brokers remain essential for compliance and personalized advice.

Q11: How to choose a good mortgage broker?

Ifthikar: Consider:

• Qualifications (e.g., CMAP)
• FCA registration
• Online reviews and third-party ratings (Google, Trustpilot)
• Holistic services (insurance, pensions, tax advice)

A broker providing personalized, comprehensive guidance is more valuable than one offering basic mortgage products only.

Conclusion

Pradesh: Thank you, Ifthikar, for this insightful episode.

Key takeaways:

• Mortgage brokers provide tailored mortgage solutions
• They can handle insurance, solicitors, and surveys
• AI can assist, but human expertise remains essential
• Choose brokers based on qualifications, reviews, and holistic advice