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10 UK broker tips

More than 50 per cent of borrowers use a broker to arrange their mortgage. But how do you find one, how do they work and what do you need to know?

1. There are over 12,000 mortgage broker firms in the UK, so plenty to choose from. Brokers range from big companies employing hundreds of advisors, to one-man bands, and are listed in Yellow Pages, on the Internet and in specialist magazines. You can get a shortlist of three financial advisors in your area from Independent Financial advisor Promotions (IFAP) or online at unbiased.co.uk.
2. Make sure the broker you deal with is authorised by the Financial Services Authority, either directly or as an appointed representative of a principal. Regulated brokers should be listed on the FSA website FSA.gov.uk
3. Mortgage brokers have access to literally thousands of mortgage products, so they can scour the market for the best deal to suit you. And of course they need payment for their service. Brokers either charge you a flat fee, or charge you nothing but receive commission from the lender, or a combination of both. They are legally bound to tell you if they will be receiving payment from a lender, and must specify how much if the figure is more than £250.
4. Mortgage advice is now regulated and only qualified and authorised brokers can advise on products across the whole market. There are literally thousands of deals and many brokers deal with a panel of lenders.
5. If you need other financial advice, for example, on pensions or investments, be aware that advisors are regulated by the FSA in these areas. Unlike mortgages, advisors dealing in investment products have to be either tied to one provider or an independent financial advisor who can scour the whole market.
6. Do not be afraid to ask questions. The mortgage market is full of jargon you may never have encountered before. If the broker mentions anything, even one word, that you don't understand, ask them exactly what it means. A mortgage is a big undertaking, so make sure you know exactly what is entailed.
7. It can make sense to use a broker if your mortgage requirements are not straightforward. If you are self-employed, you have a damaged credit history, you are buying an unusual property or have any extraordinary needs, going to a broker who can scour the market could be the most direct route for you.
8. It can make sense to use a broker if you are a first-time buyer. Even if your mortgage needs are very simple, the process of arranging a loan can be daunting. A broker can take the mystery out of the process, so you might feel more comfortable doing it yourself the second time round;
9. Be honest with your broker. They will carry out a 'fact find' to establish your financial position. Do not be tempted to overstate your income or downplay existing debts or other financial commitments. Remember that it is a criminal offence to lie about your income on a mortgage application form.
10. If you have a problem with a broker and wish to make a complaint about them, you can report them to the Financial Ombudsman. Regulated mortgage brokers are registered with the Ombudsman, so you could stand to gain compensation from the offending broker via the Ombudsman.