Should you 'use' two different mortgage brokers?
Posted on 5th August 2022 at 09:54
This question was posed recently by someone who is asking two different broker Firms to get a mortgage for them. Our response is as follows; (note, I have opened comments on this topic if you wish to add your thoughts and feedback too)
"A great question, and indeed a true dilemma, for you.
The reason why we, when we are faced with this situation, will choose to walk away and close the file, is that we are not mortgage salespeople flogging products and happy to be up for a Dutch Auction, but instead we are professional advisers and we support our Clients with short, medium and long term strategies. We’re simply far too busy to speculate our time against another Broker, when we are privileged to be in a market place where our Clients contract with us. Some of our Clients have 2/300 properties each (whom we have helped from scratch), and of course they could work with other Brokers or banks, but they have remained loyal to us for many, many years, due to the trust and service of our financial advice.
This is not to say that your two Brokers aren’t also excellent at what they individually do, but then that makes it even more curious as to why you would want to play them off against each other. You're not buying clothes from Next, trying them on and sending them back - there's no consequence to this (I know, it's what my wife does all the time :-)), but instead you are placing yourself in to the UK financial services system and records are kept.
Yes, it could cause an impact on your credit report (maybe not a huge one, but still you could have searches recorded), and we would highlight this to you, yes, it is unfair to the two Brokers, because – as long as both are able to provide you with the same access to the lenders marketplace – you are not missing out on opportunities so just stick with one, and yes it is quite likely that your name will pass across the desk of the same lenders/underwriters when the two different Brokers are carrying out the pre-application research, which could lead to questions behind the scenes about you.
Shopping around (pre-Agreement In Principle, pre- Application) is fine, that’s what the comparethefurryanimal sales machines are there for (and caveat emptor should you choose that route), but when working with a professional, qualified, authorised and regulated financial services Adviser, the case that you’re working on should be exclusive. Future cases can be with other Brokers, no problem, but when one case is with two different Firms, yes, this could be to your detriment.
You may not be alerted to the background due diligence, but it will be recorded. Sometimes not even the Broker is alerted, but names can be added to the Hunter systems and other fraud prevention and monitoring shared data bases that the lenders work together on for the mutual benefit of the banking world.
My advice, is … choose a Broker / Adviser, fully disclose what you want to achieve, provide all supporting documents, let them do their proper job for you, and of course because we are all very heavily regulated so all Brokers have to record their recommendations which can be scrutinised by the FCA, and so, on each mortgage case, you should select and work with one known, long established and trusted Broker/Adviser who’s work for you in solely in your own best interest.
Point of interest, many lenders use the same valuers. So, even if you do proceed with two different lenders, via two different Brokers, you could still end up with the same valuer, providing the same valuation.
I would also like to add that a true Adviser also ensures that you speak about your overall financial planning too, including the (financial) impact of death on your family where you leave your BTL debt behind, whether you have updated your Will, do you have Guardians formally nominated, are all of your life insurance arrangements properly written in Trust, who would manage and operate your property business if you lose the capacity to do it yourself (and the cost of maybe having to contract with or employ someone else to do it), the discussion on the length of term of your mortgages and the future remortgage options, the rebalancing of your portfolio to always ensure your LTV’s are such that you can minimise your underlying costs, forward funding facility requirements, etc etc.
To finish, the ‘best’ mortgage product is not always about the interest rate. You may need flexibility of overpayments, porting, further advance, future product transfers …. Not all lenders allow these features in their mortgage products."
Comments are enabled below
Share this post: