Should brokers have access to all mortgage deals?
One of the traditional ways of finding a suitable mortgage for many people in the UK over recent years has been to go through a broker. Many people who were keen to find the most competitive deal tended to avoid gong from one lender to another in order to browse and compare deals, and get a broker to do the legwork for them, which often saved them time and money. However, in the dark days of the global credit crunch there are many consumers that may find themselves missing out if they go through a broker, and this is something that the mortgage broker industry is not happy about.
In fact, brokers have now filed a complaint about the fact that they have lost access to many mortgage deals as a result of the ongoing global credit crunch, which has resulted in many lenders making changes to the way that they operate. A number of lenders have taken some of their mortgage products off the shelves altogether, but many have also restricted access on their mortgage products, stating that they will only be available to consumers that apply direct to them rather than through mortgage brokers.
A complaint has now been filed by the Association of Mortgage Intermediaries (AMI) with the Financial Services Authority, raising concerns over this lack of access to many mortgage products. Given that over 50% of mortgages are taken through mortgage brokers rather than directly through lenders many brokers could be losing out on business as a result of this. However, the FSA states that the lack of access by brokers to mortgage products doesn’t necessarily go against the consumer’s best interests.
One FSA official said: “It is a commercial decision for a lender whether they want to offer products directly to the public or via a broker. Anyone dealing with consumers should ensure that consumers are treated fairly.”
However, what this situation does mean is that it is all the more important for consumers to shop around for themselves and look for a competitive mortgage deal, as the most competitive deals may no longer be available through a broker, and therefore those that choose to go through a broker could end up missing out on an attractive deal. Whilst there is no harm in seeking mortgage advice and quotes from a mortgage broker consumers also need to check with individual lenders, as the most competitive rates may now be available through the lender directly rather than through the broker.
The global credit crunch has resulted in lenders being far more stringent with regards to who they will offer a mortgage to, and one of the problems that consumers may face when going directly through lenders rather than through a broker is that they may not be able to get a mortgage due to their credit or other factors. This means that they may still end up having to go through a broker, as mortgage brokers have access to a wide pool of lenders, and can therefore find a lender that is more likely to consider your application.
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