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What is a mortgage broker?

By 1st August 2023January 18th, 2024Blog, Mortgages
Businessmen and mortgage broker shake hands after completing negotiations to buy a home. Small decorative house, calculator and other stationery nearby.

A career in financial services is an attractive prospect, with the role of the mortgage broker in particular being an attainable and lucrative role to pursue. If you are currently interested in this specific area of the financial services industry and want to know more about what a mortgage broker is, what you must do to become one and what the day-to-day life of one might look like, then this article is for you.

Identifying exactly what a mortgage broker is will provide us with an ideal starting point. A mortgage broker is an intermediary, either a person or a company, who specialises in arranging mortgage policies between a customer and a mortgage lender. With all the complicated language and confusing numbers associated with the housing market, the general public relies on their mortgage broker to source the best mortgage on their behalf. As a mortgage broker, it will be your duty to work closely with your customer and use the relevant information they provide you with to arrange the best mortgage deal that suits their financial objectives.

How to become a Mortgage Broker

The process of becoming a mortgage broker in the UK is fairly straight forward, with a number of avenues available for getting started. Whether you are an academic studying at college or university, or you are taking part in an apprenticeship scheme working within the sector, getting information which will serve you well during your time as a mortgage broker is plentiful. The only qualification absolutely necessary for a prospective broker to obtain in order to meet the FCA’s qualification requirement is a Level 3 Mortgage Advice Qualification, which includes:

  • Certificate in Mortgage Advice and Practice (CeMAP) obtained from the London Institute of Banking and Finance
  • Certificate in Mortgage Advice obtained from the Chartered Institute of Insurance

Upon completion of the assessment, you will have successfully developed and demonstrated an understanding of the financial service sector with a focus on the process of fulfilling individual client needs via the mortgage process. Successful candidates will then be officially licensed to offer mortgage advice and arrange mortgage policies on behalf of their customers. They will normally be offered high levels of supervision and support and remain as a “Trainee” mortgage adviser until they demonstrate competence and achieve Competent Adviser Status (CAS).

Mortgage adviser picking up a block featuring a green house logo with a percentage symbol. Four other blocks are nearby.

What is the difference between a Mortgage Broker and a Mortgage Adviser?

The terms mortgage broker and mortgage adviser are actually interchangeable. There is no discernible difference between the two titles, other than the fact some people prefer to use one over the other. So, the decision as to whether or not you should call yourself a mortgage broker or a mortgage adviser is completely your own.

However, this doesn’t mean that the term mortgage broker is a blanket title that means the same thing to everyone. This is because the way an adviser operates can vary significantly depending on whether you are an independent mortgage broker or a tied mortgage broker. The type of adviser you are will influence how and where you are able to source your mortgages from. Independent mortgage brokers, sometimes referred to as ‘whole of market brokers’, will be completely free to work with whatever lender they choose, so that they can take advantage of the full scope of the market to find the best mortgage possible for their customer. While on the other hand, tied mortgage brokers will be much more restricted in their process, working with an exclusive panel of lenders whose products they will be limited to working with. This may seem irrelevant at first but the major benefit of this way of working is that you are able to build trusted relationships with lenders that offer long-term benefits and exclusive deals.

How do Mortgage Brokers get paid?

While the answer to ‘how do I get paid, and how much will I get paid?’ shouldn’t be the deciding factor in determining whether or not being an adviser is your long-term vocation, it is important to know. As a broker, you will receive payment in a number of ways depending on how you operate. One consistent element is that you will receive payment when you secure a mortgage for a customer from the lender with which it is arranged. Obviously, this means you will be paid on commission in the event that a mortgage is successfully arranged. The amount of compensation you will receive may vary depending on the lender you work with, which is why procuration fees are important to pay attention to. The procuration fee is the fee that a Mortgage Lender will pay to an introducer for introducing the business to that lender.

Some brokers may also choose to charge their customers a fee for providing them with a specific service or as a general fee for managing their mortgage process. It’s possible that you may receive payment just for arranging a consultation with a potential customer as a one-time fee. Of course, not all brokers will choose to charge their customers for this. Instead they prefer to provide a cost-effective mortgage solution for customers and form a successful relationship. This can really come in handy later down the line with referrals and future remortgaging.

In the UK, the average annual salary of a mortgage broker is around £55,000. This doesn’t mean that the moment you achieve your qualifications you will be able to land a job with a high-paying salary such as this, but it does mean there is plenty of scope for progression. Entry-level mortgage adviser roles will likely net you a much lower salary than this, but it is important to note that any commission-based work could result in added income if you are consistently successful in arranging your customer’s policies.

Can Mortgage Brokers work from home?

Well, this is really down to the type of firm you work for. Most firms will be accepting of a hybrid working pattern, with many of our own ARs more than willing to allow their advisers to work from home. If you choose to establish your own firm and work as a self-employed adviser then where you work is completely your choice.

If you are an aspiring mortgage adviser looking for work then we recommend viewing our on-site Vacancy page here, where you can browse available vacancies and submit your CV.

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