Specialist broker or going direct to a lender: which is right for you?

When it's time to arrange a buy to let mortgage, landlords have two routes available: go directly to a lender, or use a specialist broker. Both paths can lead to a mortgage offer, but the journey, the choices available, and the outcome can look very different.

This guide sets out the potential benefits of each approach, so you can decide which route is right for you.

Benefits of using a specialist broker

Using a specialist broker can give you a much broader range of product options, while also taking advantage of advisors’ expert knowledge and experience to get the most effective, tailored support.

Market access

A broker can compare products from a wide panel of lenders, rather than being limited to one. A lender can only talk to you about their own products, they cannot comment on whether their products are the most appropriate for you compared to others. Working with a broker greatly increases your chances of being able to secure the most cost-effective deal for your circumstances as a result. 

Access to exclusive products

Many lenders make certain rates and products exclusively available through brokers as a thank you for the volume of business that intermediaries introduce.

Expertise in complex cases

A specialist buy to let broker will understand limited company borrowing, portfolio landlord requirements, HMOs, holiday lets, and other niche scenarios that a generalist lender contact centre may not be equipped to help with. 

Understanding of lender criteria

Lender criteria is set up to accept applications for properties or from applicants that they have modelled their business to. If, as a borrower, you contacted a few lenders, and they all told you they could not help, you might be left thinking there is no solution for you. 

With dozens of lenders in the market, each with different affordability calculations and property criteria, a broker is specifically equipped to know which lenders can help, and of those who can offer you the most cost effective option, saving you wasted applications and credit searches.

If your scenario does fall completely outside all lender criteria, a broker can quickly tell you - saving you a lot of time and frustration. Most significantly, if this is the case, a broker can tell you how to improve your situation so lending is possible. 

Application management

The ‘run-around’ phase, which involves chasing solicitors and underwriters, can be one of the most stressful parts of any mortgage application. A good, full-service broker manages the process from application to completion, including all of the chasing and admin, while keeping you updated at every stage.

Market insight

Brokers who work in this sector have the most frontline access to lender product launches and other market activity, including general trends on rates and lender service levels, all of which can be critical for a number of different reasons.

Ongoing relationship

A broker can flag your renewal date and get in touch ahead of time, rather than leaving you to remember when your initial rate period ends. 

This is really important because, if you unexpectedly find yourself on your lenders reversion rate – the interest rate you are charged once your deal expires – it can be extremely costly. Mainstream lender reversion rates might be 1-2% higher than the rate you were being charged, and it is no exaggeration to say a specialist lender’s reversion rate could double. 

If you take nothing else away from this guide, the above information is the most important thing to remember, so if you don’t use a broker, make sure you set every reminder under the sun available to you to start looking at a new deal 3-6 months ahead of your deal expiry.

You can secure a mortgage offer that far in advance and your bank balance will thank you. A broker will spare you that anxiety, as it is in their best interest’s to find you a new product well ahead of time, and if you share your portfolio with a broker, they can help you monitor your other mortgages too.

Benefits of going direct to a lender

Submitting a mortgage application directly to a lender can offer a more straightforward pathway, especially if you have prior experience with the lender in question. 

Familiarity

If you already bank with a particular lender or have a good relationship with your existing mortgage provider, going direct can feel like a simpler option.

Speed for simple cases

If you have a straightforward buy to let mortgage enquiry and you already know exactly which product you want, dealing with one lender can be a quick and easy option. 

Weighing up options

It can be tempting to look at broker fees in isolation and feel drawn to the seemingly cheaper option of going direct to a lender. However, this does not tell the full story.

Specialist brokers charge fees to ensure a premium-quality service. The fees cover the work that goes into sourcing a deal, and ensures that everyone involved in the process is committed to moving in the right direction.

A broker with access to a wider range of products, including deals not available to the public, may be able to secure a materially lower rate than the ones available to you directly. Over the course of an initial rate period, the saving on your monthly payments can significantly outweigh any broker fee charged.

There is also the question of vested interest. Lenders are businesses looking to make profit from applications and, understandably, it would be counterproductive for them to direct potential customers towards competitors in their field that could offer better rates. 

Brokers, on the other hand, should not have this limitation – assuming they operate on the values of fair and unbiased customer service. Always research your chosen broker, such as by checking Google reviews, before committing to a decision.

There is also a time cost to consider. Going direct can seem quicker, but only on paper. Even if you are a property investor with a high level of knowledge and experience, speed is not always guaranteed.

Comparing products across dozens of lenders, checking eligibility criteria and managing an application takes time and expertise. Landlords, particularly those with multiple properties or full time jobs, may find the fee worth paying for the sheer amount of hours saved.

Going direct may suit you if…

• You have a very simple, low-risk case, such as a single property held in your own name with a strong income and low loan to value.
• You are extremely confident in your chosen lender.
• You have done extensive research to show that the deal you’ve found is suitable and competitive across the whole market.
• You have ample time to manage the process yourself, from start to finish.

Using a specialist broker may suit you if…

• You don’t have the capacity to research all the possible lending scenarios available to you.
• You want reassurance that you have access to the best options on the market.
• You don’t want to be restricted to a single lender’s product range. 
• You want an account manager to efficiently handle the admin work that moves a mortgage application through to completion as quickly as possible. 
• You have a portfolio of properties, rather than a single buy to let.
• You have a holiday let or HMO property.
• Your income, credit history or personal circumstances are anything other than straightforward.

How Commercial Trust can help

At Commercial Trust, we work exclusively in buy to let and commercial mortgage finance. That means:

• Real-time market insights, which can inform your investment decisions.
• Access to a wide panel of lenders and exclusive rates not directly available to the public.
• In-depth knowledge of lender criteria, so we can match you to those most likely to approve your case.
• Specialist experience with limited company borrowing, portfolios, Holiday lets, HMOs, and more.
• Identifying product terms that meet your circumstances and investment plans.
• Direct access to lender back-office teams to prequalify your case and seek priority and help processing it to a timely completion.
• Current knowledge of lender service levels and turnaround times.
• A dedicated team who will communicate with you at every stage of the application process.

Whether you choose to go direct or work with a broker is ultimately your decision, and the right answer depends on your circumstances. 

If you'd like to find out what's available to you across the market, get in touch with our team today.