Mortgage Advisers Explained

In general terms there has been a movement away from using middlemen in various areas of our lives and doing things ourselves. Not many of us still go to the travel agent to book our holidays: we research and do it directly online. And similarly with many other types of purchase, including financial ones.

So is a mortgage adviser just another middleman (or middleperson to be PC!) to do away with? Well, no, and the reason is because a mortgage is a uniquely important and uniquely expensive purchase in our lives, it is particularly essential that we get it right as the consequences of the wrong mortgage can be severe.

Indeed, the majority of borrowers in the UK do visit and use the services of a mortgage adviser before taking out their mortgage. With so many products out there it really does take an expert to give the reassurance that the mortgage you are interested in is the right one for you, and if not suggest other options for you.

You may come across a mortgage adviser under a variety of names and guises, ranging from an intermediary (which just means someone in the middle) to a broker (which is usually a buyer and seller, or a dealmaker, in financial parlance). There are various types of mortgage advisers.

The different types include a tied agent, a multi-tied agent and an independent mortgage adviser. These describe whether they only sell the products of one particular institution: for instance a particular bank or building society; or whether they are tied to several providers, or are totally independent and therefore can recommend any product.

Mortgage advisers are regulated by the FSA as of the last five years or so, and this means that there are none of the concerns that there were under the old self regulated system, and now the FSA regulation means that if you get poor advice then you can complain via the Ombudsman service; mortgage advisers have formal tests they must pass before they can take up the role of giving advice.

You may be wondering about the fees that the mortgage adviser will charge: as of course they will. It may be they charge you a direct fee for advice, or that they will get commission when they sell you a particular mortgage from that lender, or it could be a combination of the two.

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Mortgage Advisers Explained