How to remortgage through a broker

Remortgage Guide:  #7

How to remortgage through a broker 

 When looking to remortgage there are two questions to ask a mortgage broker.

Are you 'whole of market' and can you source a mortgage for me from any available UK mortgage lender? Under FSA regulations, ‘whole of market’ is technically defined as the whole of the ‘available’ market, therefore, deals not available to brokers don’t have to be included.

Whilst going to a broker is still the best start point, it’s always worth checking the deals available elsewhere too. Virtually any company may decide to launch a product only available direct to customers, not via brokers. Ultimately this is a question of how much time and resource you can put in to supplementing your broker's best deal.

Brokers have two sources of income.

• Commission. Almost all lenders pay brokers a ‘procuration fee’ of around 0.3 to 0.5 per cent of the mortgage’s value.

• Fees. Brokers may also charge a fee directly, this should not be more than 1.25 per cent of the mortgage’s value.

Previously, fees could only be charged on mortgage completion, now, providing brokers inform you at the outset, they can charge at any point in the process.

If you chose to remortgage through a broker there are a few steps to follow.

Step 1 Choose a broker.

You should be told explicitly what the advice will cost, plus how and when you will be expected to pay.

Step 2 Discuss your circumstances with the broker.

It is helpful if you have a redemption quote from your existing lender.

Step 3 Check direct-only deals.

See if you can beat your broker with deals they cannot access. If you can, discuss the deals with your broker.

Step 4 Select a mortgage.

Your broker should make sure any mortgage selected meets your requirements.

Step 5 You or your broker will make the application to the lender.

Step 6 Valuation and legal work.

This should take between 4 and 8 weeks.

Step 7 Completion.

There are lots of good UK mortgage brokers and if you choose carefully using the questions above, you should get an excellent service.  

Next - #8 What to watch out for when remortgaging