Gone are the days when if you wanted a financial product as intimidating – and expensive – as a mortgage, you went to your local bank branch for a friendly chat with the manager.

As recently as 2012, most mortgages were taken directly from a bank or building society. Yet a rapid advance of a few years and a combination of fewer bank branches and building societies, a growing loss of confidence in the ability of many banks to give sound advice and, more recently, more complex rules regarding taking out a mortgage, mean just over 60% of mortgage loans are now taken out through a broker. Some industry experts predict this will be the preferred route for up to three-quarters of borrowers over the next five years.

So should you join them and head to a broker for your home loan – or are middlemen a waste of money?

Why it’s harder to borrow

Part of the recent surge in traded mortgages stems from new rules introduced in April by the city’s regulator, the FCA, that make it harder to get a home loan. Following the FCA Mortgage Market Review (MMR) lenders must now ask borrowers much more detailed questions, which means that a typical interview to get a mortgage now takes two to three hours. This means that people who may have already secured a loan are rejected under the new scheme, while others face further scrutiny on things like child care and travel expenses. .

“Now, choosing the best rate or the best deals online doesn’t make sense if you don’t qualify for the loan,” says David Hollingworth of London & Country Mortgage Brokers.

And anyone who’s recently tried to get a mortgage directly from their bank or mortgage company branch may find themselves waiting several weeks for an appointment. This is because the new rules also mean that all mortgage sales must now be counseled, so lender staff will need to be qualified and will not be allowed to sell home loans without evaluating clients.

The changing face of mortgages is now being recognized by lenders who previously had little or nothing to do with brokers. Last month, HSBC, which has always dealt directly with its clients, launched into business with the Countrywide broker network. Over the next few weeks, TSB will start selling through London & Country. Both agreements will be extended more widely to other brokers next year.

“Making the wrong choice about your mortgage can cost you hundreds, if not thousands, more than you have to pay,” says James Daley, consumer rights activist for the Fairer Finance website. “And because mortgages are inundated with additional fees and charges, it’s too easy to trip over. This is why it makes perfect sense to hire a mortgage broker.

Homebuyers Matthew Wood and Amy Blowers are a couple who have decided to go with a broker to settle the mortgage on their home, which they will move into on Friday. The couple, from Carlton Colville in Suffolk, are first-time buyers with a 5% down payment for their home and initially did their research online. “We looked at bank websites for mortgage quotes, but we wanted to compare the entire market, especially since we were having difficulty with the deposit amount.” The couple approached London & Country, which secured them a Help to Buy guarantee agreement with Halifax, set at 5.59% for two years.

What to look for in a broker

The three key things to look for are the number of loans they offer, the amount you will be charged for their services, and their reputation.

Their reputation may be the hardest to assess, but many borrowers follow the recommendation of a friend or family member, which can be invaluable. Otherwise, it’s worth doing some research online and offline to see what people are saying about a particular business. Also think about what kind of service you want: are you happy to talk to a broker entirely over the phone, or do you want a face-to-face meeting (which may cost you more)?

In terms of available loans, a “global market” or “fully independent” lender will have access to the greatest number of loans, unlike brokers who only look at a limited panel of lenders.

Independent brokers will assess just about all mortgages except those offered directly, like those from Tesco. Even then, some brokers will be willing to ask you if a mortgage from this lender looks like a good deal at first glance, even if they can’t help you apply for the loan.

There are other exceptions. Some lenders, such as the Yorkshire Real Estate Company (which also owns Chelsea, Norwich & Peterborough and Barnsley real estate companies) and the Co-op do not deal with brokers, although both have separate mortgage divisions only for brokers (Accord and Platform).

“If you go with a broker who doesn’t look at the whole market, it’s worth doing your own checks – just to see if there’s anything better that you’re missing out on,” says Daley. “Google has a good mortgage comparison tool [google.co.uk/compare] which reviews a selection of direct trades and brokers. If you find something better value for money, you can always go directly to the lender.

Most brokers also have access to “broker exclusive” offers, which may or may not be better than those offered directly by the lender.

Currently these include a two-year fixed rate from the post office at 2.95% up to 90% loan-to-value with a fee of £ 995, and a five-year fixed rate from the Skipton building company at 2.56%, up to 60%. LTV, with a charge of £ 995.

How much will a broker cost you?

Some, and probably the best known of these is London & Country, do not charge the borrower anything, but rather take a commission from the lenders, usually between 0.35% and 0.4% of the loan.

The majority of brokers, however, charge a fee and this can be either a flat rate or a percentage. It should be noted that these brokers will also receive a commission from most lenders.

The Which? Consumer group, for example, charges a non-refundable upfront fee of £ 249 and a side charge of £ 250 once you’ve completed your mortgage (or £ 150 if you’re a member of Which?). Other big names such as John Charcol and the Mortgage Advice Bureau charge percentage fees, which can vary depending on your situation. However, these fees should be agreed with you upfront, so there shouldn’t be any hidden surprises.

John Charcol, for example, has a minimum fee of £ 495 and a maximum of 1.5% of the loan value. However, its typical fee is 0.24% of the loan value.

Whatever the fees, a good broker should consider not only which loan is the best price for you, but also which lenders are most likely to secure your loan and which to avoid, such as those with a backlog of applications.

“We know the small variations in the criteria that mean that one lender, for example, will take tuition in their affordability assessment, while another won’t,” says Andrew Montlake of Coreco brokers.

BE CAREFUL WITH …

Lenders are now taking a closer look at the following, which could reduce your chances of getting a home loan.

■ Erratic gains. Self-employed and contract workers struggled to get a mortgage immediately after the RMM changes took effect. However, some lenders have now relaxed their approach and recently big names such as Halifax and specialty lenders such as Precise have started to consider self-employed with only one year of accounts.

■ Child care costs. “The amount you pay for child care is now systematically assessed, and this has had a huge impact on how much people can borrow,” says David Hollingsworth.

■ Travel expenses. A subscription can count against you. “Some lenders will view this as a critical expense while others will not because you may be able to use other means of transportation or choose to work from home,” says Brian Murphy.

■ Pension contributions. Some lenders will deduct your monthly retirement savings from the amount you can borrow. Others, like NatWest, ignore it. “People have to find the right lender for them rather than reducing their contributions,” says Hollingworth.

■ Future financial commitments. If you are planning to take maternity leave in the near future, for example, some lenders will take this into account.

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