Your mortgage lender is more than just a creditor--it's an entity with which you'll have an ongoing, dynamic relationship. With that in mind, it's critical that you choose a lender you enjoy working with. Too often, newcomers to the real estate market accept the first institution that agrees to lend to them. This can often sour into an antagonistic relationship down the road, but by then it's too late.
To deal with this potentially rocky relationship between lenders and borrowers, mortgage brokers mediate between the two parties. Of course, it's not quite that simple. Sometimes brokers are expressly allied with lenders, as the relationship profits both parties. In other instances, mortgage brokers are neutral and simply act as an intermediary. Rarely are brokerages completely on the side of the borrower, though there are some independent brokers in the market who claim to be.
In the UK loan market, there are several different types of lender. Some of these are so-called "direct lenders" who operate without the aid of a brokerage. But typically first-timers need the help of a mortgage intermediary that can objectively report on the state of the loan- or mortgage market and provide detailed and comprehensive information. From this, prospective owners can make their own informed choices.
Of the five major types of lenders--banks, insurance companies, intermediaries, building societies, and specialists--each has its own unique pros and cons. One of the primary factors to explore when considering the right type of lender for you is to whom your lender is most accountable. Sometimes it's a company's shareholders who stand to glean profits. In other instances it's members of a society. Some intermediary lenders are tied to a specific lender. Whatever the case may be, it's important for buyers to know just who stands to benefit most from the transaction.