Should I use a Broker or go Direct to Lender?

As this is authored by a mortgage broker and not a lender you may think my advice is biased. Here are my views so you can decide what is best for you so hopefully you will see that this information is unbiased.

You can shop around for the best terms and the form I have created will allow you to do this (Download Here). I would say that for those that have the time to do the research and there is no desperate rush to complete, then going to a lender direct is fine. All lenders state that completion is possible in less than a week but very few deliver so if speed is important I can put my hand on my heart and say trust in a broker.

Some lenders are more comfortable if the application is via a broker as a good solid exit route can be given with a back up exit route if things go wrong. There is one lender we use regularly that charges a 1,5% arrangement fee payable on completion and for loans over £150,000 we will arrange the loan with the same lender with a 1% arrangement fee, so it is actually more competitive to do the loan via ourselves (if you can find out who we are!).

Generally we can arrange the bridging loan without needing a broker fee and without getting the lender to inflate their fees to build in a commission. I can genuinely say that in more than half the loans we arrange there is no additional premium paid by the client and for the other half the maximum is 1/2% which I think is a fair additional premium to have the peace of mind of not taking the risk on using a lender that cannot provide a certain track record.

I would say that if a broker is putting on a whacking great fee then do the research or use that as a lever to move on to another broker. As an example, if the bridging loan is for £700,000 and the broker is charging a 1% fee they are basically asking for anything in the region of £7,000 to £14,000 for placing a case or preying on your desperate needs. This is not justifiable and there are plenty of reputable brokers that would be willing to work on a flat fee basis.