Capstone Finance - Unbiased Mortgage Brokers | Mortgage Advice Bureau | Mortgage Comparison

Getting the right mortgage or remortgage deal can save you £100s each month. With interest rates at the highest they've been for many years, it's possible to get it wrong and end up paying massively over the odds.

In this step-by-step guide, we aim to show you how to find the best mortgage deal, where to look for a good mortgage broker and other key information.

Step 1: Do a 10-min search for mortgage deals online

Before we begin searching for mortgage deals, we're assuming here that you've a basic understanding of mortgages and what kind of deal you're looking for. If this isn't the case, then why not check out our What type of mortgage to choose guide first?

Once you know what mortgage you want, whether you're going for a fixed, variable, discount, or specialist mortgage, you need to start looking at what rates you can get. This will depend on the size of your deposit and the value of the property – the bigger your deposit compared to the value of the property (known as 'loan to value'), the better rates you'll be able to get.

But in starting your search for the best deal, the first thing you need to know is:

'NEVER just go to your bank for a cheap deal.'

Your existing bank will only give you its range of deals, not the array of alternatives, meaning it's unlikely you'll stumble across the best one for you. But do check what it's offering as a starting point.

Benchmark a good mortgage rate using MSE's Best Buys tool

There are lots of mortgage comparison sites out there, but none guarantees to show you all the deals available. This is because the mortgage market is complicated and some deals are only available through certain brokers, making it very difficult for a comparison site to know about every single deal at all times. But our Mortgage Best Buys tool has all deals available direct, and most available to brokers, so it's a great place to start.

Step 2: Now talk to a mortgage broker

Once you've benchmarked a good rate from our Mortgage Best Buys tool, it's time to see if a qualified mortgage broker can beat it.

Mortgage brokers scour the market to find you a good mortgage deal. By using one, you swiftly cover a huge slew of lenders, and get added clout with them to ease your acceptance as well as an extra layer of protection if things go wrong.

They will also be able to advise you about various homebuying schemes (such as Shared ownership) if you're eligible – tell your broker upfront if that's what you're looking for.

Qualified mortgage brokers are also worth their weight in gold, because they know key details about lenders' criteria. So they would know if the lender you're thinking of doesn't lend on properties above shops, or in council blocks – so they'd be able to recommend a different lender that does.

But, the key is to find a broker you're comfortable with. The estate agents you meet when house hunting will often recommend brokers. They may even work from the same office. But you are NOT tied to using these, even if you buy via that estate agent.

Ask friends who've moved for recommendations – many local brokers are fantastic. The aim's to find you the best broker for the lowest possible price. Not all brokers are the same. Some are limited in what they can offer you.

Here are the three crucial questions to ask brokers...

1. Can you get me a mortgage from any UK lender, right now?

This finds out if your broker can source you ANY UK mortgage. Not all can so it's important to know which you're dealing with. Here are some of the possible answers:

'No.' Some brokers are tied to one lender or operate off a small panel of lenders, so they search fewer deals. This makes it simpler and cheaper for them to operate.

'We check all products available to brokers.' The key point to note here is the last phrase – available to brokers. This used to be called 'whole of market'. Many of these brokers will exclude lenders and products which are only offered directly to the public, mainly as they won't receive a commission. On top, they may not be able to submit an application on your behalf.

'We check all lenders.' Some brokers do check lenders' direct-only deals too. However, they are more likely to charge a fee. In reality, it's unlikely a broker could guarantee you access to EVERY mortgage, as exclusive deals can be arranged between lenders and brokers (and clubs that brokers can join).

Just be clear on what your broker is offering. Weigh up the need to check every deal, your willingness to do some legwork yourself, and if you're happy paying a broker fee. Once you've found a broker you're happy with, you need to ask them the next questions to find out if they're the best broker for you.

2. Do you charge a fee?

This tells you how the broker makes their money from your mortgage deal. Brokers have two possible sources of income, which are:

Commission. Almost all lenders pay brokers what's called a 'procuration fee' of roughly 0.35% of the transaction (£350 per £100,000). This is a commission based on your loan size – and doesn't affect the cost of your mortgage. They are obliged to tell you the exact amount they'll be paid before you apply. You can find this info alongside the 'Key Facts Illustration', which they must provide before you apply.

Fees. Brokers may also charge you a fee directly. This might be on top of the commission, or instead of it (in other words, they charge a fee and refund you the commission). If they offer you the choice between fee or commission, then they can call themselves 'independent'. If they don't, they can't – which is a bit confusing.

No reputable broker should charge more than around 5% of the mortgage value, even for customers with a poor credit rating. If yours charges more, walk away. Fees can be charged at any point in the process, provided you're told about them at the outset. Yet avoid using any broker who charges you big fees before completion. If the purchase falls through, you'll probably still have to pay.

As this is a Money Saving site, we've always said our preference is not to pay a fee if you don't have to. For this, you're looking for a fee-free broker (in other words, one that makes their money through commission) who can advise on the widest range of mortgages possible.

3. Are you qualified?

You need to find out whether a broker is qualified to advise you. Make sure you're getting advice from a qualified mortgage adviser (the most recognised qualification is called CeMAP). Your broker should assess your needs and eligibility before recommending the most suitable product for you. This route also offers the most protection for you as a consumer.

If the advice turns out to be wrong, the Financial Ombudsman will be able to investigate any wrongdoing. If you chose a product from an information-only service, you'd have no comeback if you made the wrong choice.

How to find the top UK mortgage brokers

Now you know what you're looking for, as we can't review every mortgage broker in the UK, we've concentrated on some of the big ones that have nationwide scope, plus ways to find local face-to-face brokers. If you have any doubts about a broker, find a different one – there's nothing wrong with talking to several before you settle on one.

Step 3: Then check deals that most brokers miss

If you used our Mortgage Best Buys tool to benchmark a rate before you went to a broker, and it couldn't beat your rate, then you've probably already done this.

And if your broker says it tells you about all deals on the market (not just the ones they can transact for you), this part should already have been done. It may be worth double-checking, but it's likely you've already found the best deal for you.

If you used a standard broker, it may still miss some deals as sadly, some lenders have retreated from the broker market to cut costs. Some simply don't allow brokers to access any of their deals; others reserve some deals for direct sales only.

For belt 'n' braces, compare a broker's best result to the three types of mortgage it may not have included:

Lenders that don't operate through brokers

Yorkshire Bank and First Direct are two examples of lenders that don't offer their deals through brokers, you'd have to apply directly.

Yorkshire Building Society also doesn't work with brokers, though it does deal with them through its own broker brand, Accord. Brokers who say they search the whole market should include direct-only deals in comparison, but they don't have to offer to help you purchase these.

Lenders that don't offer all their deals through brokers

You'll really need to do some legwork for these. A few lenders put some deals through brokers and offer some only directly. Just to show there's nothing like keeping things simple!

In some cases, direct deals can be much more competitive (but not always). Usefully, MSE's Mortgage Best Buys tool finds the best deals for youthat and tells you if they're available through brokers or only directly.

Exclusive deals from other brokers

In the final category are the deals available exclusively through certain broker networks, as they sometimes negotiate their deals with lenders. Unfortunately, we can't cover all of these in our best buys tool, but they're not a significant proportion of the market. For full belt 'n' braces, you could try a few different brokers.

To properly compare deals, find the best deal that a broker can offer you, and the best deal you can find using our Mortgage Best Buys, then use our Compare two mortgages or Compare fixed-rate mortgages calculators to see what each will cost you.

Step 4: Check mortgage paperwork

You could start a library out of the amount of paperwork you get sent when you take out a mortgage or remortgage. The main documents you need to be aware of are:

Key Facts Illustration

The Key Facts Illustration does what it says on the tin. It gives you the 'key facts' about the mortgage product, not all of them, but all the main ones. You should be given one of these before you make an application and you should check through carefully. Here's what to look out for:

Does it have the Key Facts logo on it? (Shown above)

Does it have the correct date on it?

Does it have your name on it?

Does it state who has created it? This will be your broker's details, or the lender if you've gone direct.

Does it say if you've been recommended the product?

If all of the information is in there, file the illustration and keep it. If some of this information is, missing, ask the lender or broker for a new one. In the event you ever have a disagreement with your lender, this document is a crucial piece of evidence that proves what you were recommended, by whom and when. Your lender won't keep a copy forever, so keep it somewhere safe as it could be years before you need it again.

The mortgage offer

Once you've successfully applied for a mortgage, you'll be sent a mortgage offer by the lender. This gives ALL the facts about the mortgage and the conditions on the loan that you are agreeing to.

It's a bit more reading, but it's massively important you read through it and check every detail is 100% accurate. Be sure to look for:

Mis-spelled names or incorrect loan figures. This could stop the mortgage at the very last minute, resulting in delays, additional expense, jeopardising the purchase and even more scarily, losing the mortgage offer completely.

Anything unexpected, particularly info that contradicts your Key Facts Illustration. Pay particular close attention to fees, early repayment charges and the conditions you need to meet to complete (as it's your solicitor's job to check you've met these before the money can be drawn down).

Your broker should also check the mortgage offer, but don't rely on that. If you were to disagree on a point later down the line, it could be very difficult to win the argument if you've signed the document accepting the conditions.

Step 5: Watch out for the hard sell

Some lenders and brokers try to make more money elsewhere in the mortgage process. So be prepared for the hard sell on these products.

Mortgage payment protection insurance (MPPI)

Sometimes called accident, sickness and unemployment insurance (ASU), MPPI is supposed to cover your payments if you have an accident, become ill, or you're made redundant.

You can get limited help from the Government in these circumstances but, at best, it will only cover your interest. So it's sensible to consider, before you take out a mortgage, how you would manage to meet your repayments if these events happened.

MPPI isn't a bad policy but it can be quite pricey and has been mis-sold in the past to people who couldn't actually claim on it. This can happen because the insurer doesn't carry out any checks when you first apply, only when you go to make a claim.

If you suspect that your job might be at risk in future, try your best to get a guarantee that the MPPI on a new policy would pay out.

What to ask before taking out MPPI

If you do decide to take out an MPPI policy, check carefully:

That it will pay out if you claim

When it will pay (you may have to wait several weeks before the policy kicks in)

How much it pay and for how long (it usually only covers your repayments for 12 months)

Ensure you understand all the terms and conditions before signing on the dotted line.

Bundled buildings/contents insurance

All lenders will insist you take out building insurance, and normally it's a condition of them giving you the mortgage in the first place. But be very suspicious of deals thatbuilding insist you buy your buildings insurance through your lender. While the amount quoted may seem reasonable in the first year, you'll then be trapped into accepting whatever premium increases they foist on you in subsequent years, for as long as the mortgage lasts.

Some lenders might add on an admin fee of around £25 if you decline to take their insurance, but this can normally be recouped from the insurance provider you end up with. If you go elsewhere for your home cover, some seriously cheap deals are possible. By using cashback sites, some people have even been PAID to take out insurance. See our Home insurance guide.

Life cover from your mortgage seller

Don't assume just because someone sold you one financial product, they'll automatically get you a good deal on extra bits such as life cover or other insurance.

Buying your first home is probably the first time you've thought about life insurance, but don't rush in and grab the first one offered to you. In some cases, you can save 50% on the life cover sold by your lender or broker.

As Ken told us: "Friends of mine were paying £42 and £51/month for mortgage life insurance through their broker. After researching your site, they obtained quotes elsewhere for £9 and £11/month – a colossal saving as the term is 25 years."

For full information on how to find the cheapest cover, see the Life insurance and Mortgage life insurance guides.