What a broker does
A broker gathers your details, checks which lenders and products could fit, recommends one and explains why. It then manages the application through to offer and completion. Under the mortgage rules, an advised recommendation must be suitable for your needs and circumstances, and the adviser should be able to explain the reasoning.2
Ask which lenders the broker can consider. Some search a wide panel; others work with a limited number. Neither is wrong, but you should know which service you are getting.
How brokers are paid
A broker may charge you a fee, receive commission from the lender, or both. It should tell you how it is paid, how much you will be charged, when the fee is due and whether any of it is refundable if the loan does not go ahead.3
A service with no customer fee still has a cost: the commission is part of the price of the product. Compare the total cost of the loan and the quality of the service rather than the fee alone.
Going direct to a lender
Dealing directly with a lender removes the broker fee and keeps the conversation to one firm. The lender will only offer its own products, so the comparison across the market is yours to do.
Direct applicants still receive a personalised illustration and, where advice is given, the same suitability protections apply. Where a lender offers an execution-only route with no advice, you take responsibility for the choice.2
Comparing the two routes
| Consider | Through a broker | Direct to a lender |
|---|---|---|
| Product range | Lenders on the broker's panel | One lender's products |
| Advice | Recommendation with reasons | Depends on the lender's service |
| Cost | Broker fee and or commission, plus lender charges | Lender charges only |
| Your time | Broker manages the application | You manage it |
| Access | Some lenders are broker only | Some lenders do not deal with the public |
Checking any firm before you proceed
Whichever route you choose, check the firm on the FCA register and use the contact details shown there to confirm who you are dealing with. Genuine firms can charge upfront fees, but pressure to pay quickly or requests for unusual payment methods are warning signs.4
Habitat Loans acts as an introducer. Advice and arranging are provided by Loans Warehouse.
Questions to ask a broker
- Which lenders can you consider, and are any excluded?
- What is your fee, when is it payable and what is refunded if the loan does not complete?
- Do you receive commission, and does it affect the fee I pay?
- Why does the recommended loan fit my circumstances better than the alternatives?
- What is the total amount repayable, including any fees added to the borrowing?
For loans secured against your home. Introduction to Loans Warehouse. Subject to status and lender criteria. Broker and lender fees may apply.
Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
References
Sources checked on 17 September 2026. Statements about distribution describe the market generally and not the practice of any named lender.
- MoneyHelper: Second mortgages. Getting advice and comparing second charge options.
- FCA Handbook: MCOB 4.7A advised sales. Suitability of a recommendation and explaining why it is appropriate.
- FCA Handbook: MCOB 4.4A initial disclosure requirements. Fees, payment timing, reimbursement and commission disclosure.
- FCA: Loan fee fraud. Warning signs and checking firms through official contact details.