If you struggle to source the right loan or mortgage, it might be time to rethink your strategy. Perhaps you suspect your financial situation might make you a less than attractive prospect for a lender. If that is the case, a finance broker might be the best option.
A finance broker is an intermediary who gathers relevant information and approaches different lenders on the behalf of a prospective borrower. While going to a lender directly might result in a solitary finance offer (or none), a loan broker can seek out all your options. Thus you can better decide what is best for you. Everyone has unique financial circumstances. Loans should reflect this. you must tailor terms to suit your budget and responsibilities.
Loan brokers may charge you a service fee or receive commission from the lender for bringing your custom in, so make sure you check how payment works when you first engage them. Moolr do not do this, taking commission from the lenders themselves as reward for sourcing custom. You’ll also want to make sure that they’re authorised and regulated by the Financial Conduct Authority (FCA). You can do this by searching for an FCA-approved loan broker on the Financial Services Register. We are of course fully registered and regulated.
A loan broker is legally required to inform you that they are a broker. This avoids confusion if you were considering going directly to a lender. you need to be aware fully of the process you are using when considering finance.
If you choose to go with a broker, make sure you do some research into the kind of loans you’re looking for before you proceed. This planning will help you form an idea of whether what the broker is offering you is a good deal or not.
When you’re looking for a mortgage for example, there are lots of things to consider. The length of time you’ll pay your mortgage back and the type of mortgage you choose. Then there’s other considerations such as early repayment fees and the range of mortgage conditions. While it’s relatively straightforward to find these details online, comparing the pros and cons of each product can be time consuming – and confusing – especially when you can’t see the small print.
One of the main benefits of using a broker is that they know the market and are best placed to advise you on the best products for your needs, taking a lot of the legwork away. They also understand what different lenders expect, so can provide guidance on whether or not they’re likely to lend to you before you make an application, based on your own individual circumstances, which can be beneficial for your credit score. A mortgage broker should be able to explain everything to you in clear terms so you know exactly what you’re getting with each mortgage.
Another benefit of using a mortgage broker is the exclusive deals they can offer. Brokers often have access to products that might not be available on the open market, as some lenders only deal with them. You might also find your broker offers a more complete service, finding products like home and life insurance to complement the mortgage they’re arranging for you. This way you can tick a few jobs off your to-do list in one go.
Whether you go direct to the lender or use a broker to shop around for loans, the choice is yours. Brokers can save you time and bring some valuable expertise to the table. With other brokers though there could be additional costs. At least in the short term. Their existing relationships with particular lenders might mean they’re not impartial. The regulations state however that they should be. And most are certainly impartial.
However, if your circumstances are complicated, help is at hand. for example, those with a poor credit history might benefit from assistance. Such as enlisting the help of an expert to find lenders willing to work with you. If you’re borrowing for the first time and need some help understanding all the different loan types and conditions, then a broker could be a lifesaver. Make sure you choose a loan broker accredited by the FCA. Be clear on what they’re getting out of the arrangement before you start. This will ensure you really are getting the best deal for you.
Should you have time and your financial circumstances are fairly straightforward, you may find you can get a good deal direct from the lender. So, always do your homework before you approach a broker for their help.