What does a mortgage advisor do?

What does a mortgage advisor do? 

Whether you’re buying your first home or your forever home, you might be considering using a mortgage advisor to guide you through the process. Buying a home and, in particular, searching for a mortgage deal can be a really stressful time, so many people turn to a professional for help. Below, we explore what a mortgage advisor does and whether you need to use one for your home purchase. 

Primary duties of a mortgage advisor 

The primary responsibility of a mortgage advisor is to search the mortgage market for you to find the best mortgage deals. This can be extremely helpful for first-time buyers who aren’t particularly familiar with the process, or even for buying your second home or remortgaging your current property, to take a weight off your shoulders and an item off your to-do list. See below a breakdown of a mortgage advisor’s primary duties/tasks they will complete for you: 

Assess your income

The first thing a mortgage advisor will do is assess your current financial situation. They will look into your income, your outgoings and your credit score to determine how much money you can borrow from the bank, and which lender is going to be the best fit for you. They will then issue you a mortgage in principle based on all of the following, informing you of how much you can borrow, so you can start searching for your future home. 

Research the mortgage market 

Once you’ve found your dream home and your mortgage advisor has determined how much you can borrow and what type of mortgage is going to be right for you, they will then research the current market to find you the best deal and interest rate.

Recommend lenders to you 

Once they have undertaken their research and found the best deals for you based on your needs, they will then recommend mortgage deals to you and go through each one so you fully understand your options. It will then be down to you to choose which option suits you best. 

Guide you through the application process 

Once you have chosen the deal you will go with, your mortgage advisor will assist you throughout the entire application process, helping you fill out all the relevant paperwork. This can make the process notably quicker and easier for you, as they can help you make sense of what the lender is asking of you. 

Different types of mortgage advisors 

When searching for mortgage advisors, there are three main types to choose from: 

• Independent mortgage advisor – these types of mortgage advisors can look into all mortgage lenders on the market, offering a wide choice of products for their clients. 

• Restricted mortgage advisor – Restricted or tied mortgage advisors are only able to offer you deals from one lender, usually because they work for one specific bank or building society and will be unable to provide you with deals from competitors. 

• Multi-restricted mortgage advisor – these types of advisors can find and offer you deals from several providers; however, this won’t cover the entire mortgage market. 

How much does a mortgage advisor cost? 

Now onto the question you’re probably most concerned about – how much is it going to cost? Buying a home, whether it’s your first or a second, costs a lot of money. You’ve got solicitor fees, stamp duty (excluding first-time buyers buying properties under 300K), survey fees, and possibly new furniture to save up for. The last thing you want to do is add mortgage advisor fees to your long list of expenses if it’s not necessary. 

But you might just be in luck! Some mortgage advisors work on a commission-only basis. This means they get paid a commission by your lender based on the amount you’re lending to purchase your home. This is the best-case scenario, as it means you won’t have to pay for their services. If this isn’t the case, then you will have to pay a fee for their advice. This will usually be a set amount of around £500 and is often calculated as a percentage of the mortgage amount. In rare cases, mortgage advisors will charge hourly for the work they carry out for you. Always check with a mortgage advisor before starting, to make sure you’re happy with their fee structure. 

Do I need a mortgage advisor? 

The simple answer is no. You don’t need a mortgage advisor to get a mortgage, but they can make the process easier and quicker for you, as well as removing some of the stress involved with purchasing a property, especially if you’re new to this. Or suppose you have any discrepancies on your credit score, for example. In that case, a mortgage advisor can easily rule out lenders that are likely to reject you, saving you time applying for mortgages with several different lenders, without knowing their individual policies. 

Do I need a mortgage advisor to remortgage? 

The same goes for remortgaging your home; you don’t need to use a mortgage advisor if you don’t want to. Once your term is up and you’re ready to remortgage, you might feel more familiar with the process and feel confident in finding your next mortgage deal yourself. But if you’re still unsure, or you have any reason to believe that not all lenders will accept your application, it might be worthwhile hiring a mortgage advisor to guide you through the process again. 

Pros and cons of using a mortgage advisor 

We appreciate that this might be a lot to take in, so below we’ve listed the main pros and cons of using a mortgage advisor to help you make your decision: 

Pros of using a mortgage advisor 

• A mortgage advisor will save you time, especially if you’re unfamiliar with the process or have limited time to search for deals. 

• They will help guide you through the application process once they’ve found your lender, making the paperwork stage easier, as you have someone to turn to for advice when you’re uncertain of what is being asked of you. 

• Mortgage advisors have access to a wide range of lenders, some of which you wouldn’t be able to apply for otherwise. 

• They can help you determine your chances of lender approval, reducing the risk of failed mortgage applications that can affect your credit score and make it harder to be accepted by other lenders. 

• Mortgage advisors can be helpful if you are self-employed or haven’t been working for your current employer for long. They will have a good idea of which lenders won’t have any issues with this, as some lenders will be sceptical of people who are self-employed or in new employment, as they might class this as an unguaranteed income. 

Cons of using a mortgage advisor 

• The main con of using a mortgage advisor to guide you through the process is the potential cost on top of other expenses. 

• For advisors who work on a commission-based fee, they might receive a higher commission from specific lenders, which could bias them toward choosing the best deal for themselves rather than you. 

• Although a mortgage advisor can find you excellent deals without the hassle of having to trawl through lenders, you might actually be able to find a better deal yourself from a bank or building society you are already a customer of, so it’s always worth looking into this. 

Ready to find your perfect home? 

Now you know what a mortgage advisor does and what the benefits are of using them, you’re ready to start your search for your perfect home! If you’re looking for new build homes in the West Midlands, be sure to explore our Wrottesley Village development, where you will find a selection of homes from new build bungalows to fully detached 4-bedroom houses. Register for updates today and contact our friendly team with any queries.