What is a mortgage broker
Mortgage loans are brokered on behalf of companies and individuals by mortgage brokers, who effectively act as intermediaries. Mortgage brokers function to find banks or lenders that will willingly make the exact loan an individual requires. If you work with a mortgage broker in East-Sussex, it won’t be so difficult to get a great deal on the mortgage loan you require. The right broker will also improve your chances of getting a mortgage, even if you have a poor credit score or are subject to any other circumstances that could complicate your mortgage application.
Professional mortgage brokers are bound under strict regulations and required to comply with banking and finance laws in the customer’s jurisdiction, so, you don’t have to worry about being in the wrong hands.
What Is A Mortgage?
Quite simply, a mortgage is a loan. As opposed to personal loans, a mortgage is tied to a piece of property, acting as a security against the loan. If you default on your payments, your mortgage provider has the right to take back (repossess) the property.
Mortgages are usually set for a set period of 25 years, but can sometimes be set for longer or shorter terms. Once you’ve borrowed the money, a repayment plan is then set in place. Mortgages with monthly capital repayment structures are the most common, even though there are other options available.
You will be required to pay interest on the loan Acquired by the collateral of a particular property, a mortgage is an instrument of debt the borrower is required to repay, according to a pre-set payment structure. Mortgages are a vehicle for individuals and businesses to make large property purchases, without paying the entire value of the purchase up front. The property can be owned by the borrower without a mortgage after the loan plus interest are repaid by them over a period of time. Failure to make mortgage payments can result in the lender taking back the property used as collateral for the mortgage.
Should there be a default on mortgage payments, the lender can take back the property, as the bank will have a charge on it. The home’s tenants may be evicted by the bank, the property sold, and the equity used to clear the mortgage debt if there’s a repossession.
There are several types of mortgages. With a fixed rate mortgage, even though there is provision for longer fixed rate terms, borrowers are expected to pay the same interest rate for the initial terms (being two, three or five years). The monthly payment never changes during the fixed rate term. The borrower’s payments will not change on a fixed rate, even though the market interest rates increase. Changes in market interest rates have no effect on the borrower’s mortgage repayment if they have a fixed rate.
At the end of the fixed rate, your mortgage would revert to a ‘standard variable rate’ put in place by the lender, bank or building society from whom you borrow the money. This rate can go up or down whenever the lender sees fit, so if you have a diligent broker or good diary system in place, remember to re-mortgage or call your existing lender and change the rate by looking around three months before that rate increases to the variable rate. This will save you paying much higher monthly payments.
A mortgage may appear cheaper than it really is, because the initial interest rate is mostly a low rate. An increase in interest rates later on could mean that the borrower would not be able to continue with payments. After the initial term, variable rates can be adjusted at any time, making the monthly payments unpredictable.
There are other types of mortgages, such as interest-only mortgages, offset mortgages, tracker rates, bridging loans, secured loans and buy to lets, which are less common but may be available nevertheless. Therefore, you should contact an independent broker to know your options. To match any needs and requirements you might have, our mortgage brokers in East-Sussex can help to find the best possible mortgage deal for you.
Handy Tools and Calculators
You can easily plan your future once you have an idea of the maximum you can borrow and how much the loan will cost. With this handy calculator, get a better understanding of how much your mortgage repayments will be, based on your full loan and interest rate. Just enter those values together with your term and press ‘Click to calculate’ to instantly see how much you’ll need to repay each month.
Why Use A Mortgage Broker?
There are a variety of advantages that come with working on your mortgage application with a mortgage broker in East-Sussex. Of these advantages, some of the more prominent include:
The possibility of saving money is the most obvious advantage of working with a mortgage broker. You only need to provide a few details, before an experienced professional committed to protecting your interests handles the hard work.
Some people worry about how true this is, considering the entire idea of mortgage brokers is still misunderstood somewhat around the globe. So, where is the catch? Even though this line of thought is understandable, you can rest easy, because not working in your best interests is in no way profitable to a mortgage broker.
The broker could actually be at a disadvantage if they cannot prove to you, their regulators, the Financial Conduct Authority or the Prudent Regulation Authority why they made the recommendations in respect of the mortgage in question. Exclusive mortgage deals not found on the high street can be unearthed by many mortgage brokers, which could potentially cut the cost of the entire loan for the client. Detailing the entire cost of the loan and letting you know how they get paid for their services is the duty of any reputable broker. A positive user experience is more important to a mortgage advisor company than just filling the pocket of an individual broker.
Finds The Most Advantageous Deal
A mortgage broker will always be in favour of your own interests and not those of the lending institution. Acting as your agent isn’t all they should do, but also problem solvers and knowledgeable consultants too. A broker can offer the best value when it comes to repayment amounts, interest rates and loan products. This is because a large variety of mortgage products are accessible to them. Mortgage brokers will interview you to identify your needs, as well as short and long term goals. Simple 30 or 15-year mortgages are not sufficient in many cases, which is why innovative mortgages and sophisticated solutions are distinct benefits of working with experienced brokers. These include mortgages to raise capital for repaying debts, money for marital needs or children, home renovations or the purchase of other properties such as buy to lets.
Has Flexibility Expertise to Meet Your Needs
The client will be under the direction of a mortgage broker, who will manage the process and handle any issues that could arise along the way. For example, borrowers with bad credit issues can find great products that will suit their needs through brokers who know lenders that offer such products. A broker will be beneficial in providing the necessary knowledge to source financing if a borrower requires a loan that’s larger than the bank would normally approve.
Save Time & Hassle
It’s never just about money. As much as it’s important to save some extra money, your time and sanity are important as well. Take into consideration the time you would need to research different kinds of loans from multiple lenders. You’d be required to fill out just one application with a mortgage broker, unlike completing one for every different lender. Your mortgage broker can make available a formal comparison of the loans recommended to advise on the information which completely illustrates cost differences, along with present rates, points and closing costs for every loan shown. Major lenders and those not so popular will be compared by your broker to seek out the most suitable deal for you, in terms of lower rates and total cost.
Reduce the workload for yourself and outsource it to someone who can provide professional advice. Mortgage brokers do the bulk of the work by helping you during the application and approval process in ways such as taking care of all paperwork; answering questions; handling applications for government schemes; and providing information about the various options and loan features you aren’t aware of. Some of these features can include drawdown facilities, offset accounts and options for extra repayments to name but a few. Your general mortgage experience and overall expenses can be largely affected by these features. In fact, if you don’t know so much about these concepts and the effects they could have, you can find clarification and get answers to any questions you may have during a phone call.
Access to exclusive non-advertised deals
Brokers have access to exclusive deals which the banks do not announce. The banks push these deals on to brokers, who are in charge of selling the products. Speaking to a broker unlocks these extra perks you would otherwise miss out on by going directly to a bank.
A bank can only sell their own deals – not those of the other banks as well – whereas a broker can search the whole market for the best deal.
Better chance of pre-approval success
Whenever you request an Agreement in principle / Decision in principle of a loan, this leaves a mark on your credit rating if you’re refused. With the required knowledge and experience brokers possess, you’ll have a better chance at approval the first time around.
Access to expert knowledge
The job of a mortgage broker is to help people secure loans. Helpful information and exclusive deals you won’t find yourself are accessible to them. Loans come with certain subtleties you could miss if you’re not looking out for them. At the end of the day, these subtleties tend to improve your mortgage chances. An experienced professional to point you in the right direction is extremely beneficial.
Instead of taking time out of your day to research thousands of loans and multiple lenders – and still potentially missing key subtleties – why not hand the work to someone who’s experienced in this industry? A mortgage broker is a great choice for your home loan requirements, just as a plumber is for fixing a leaking pipe and a hairdresser for dealing with damaged hair.
About Mortgage Saving Experts
Mortgages and insurance are not as complex as they seem at first. For this reason, it’s necessary to find an honest and knowledgeable adviser, with ample experience. Our Mortgage Saving Experts will make your journey as seamless and transparent as possible. Why make things harder than necessary, after all? Let us simplify everything for you and ensure we get the best deal possible.
With the honest and transparent services customers receive at Mortgage Saving Experts, they will come to realise that mortgages and insurance are not as challenging as they seem. Here at Mortgage Saving Experts, we treat all mortgage and insurance applications as our own. These are the things we’re about. Mortgage Saving Experts are available whether you’re a first-time buyer, a landlord, moving on to a new phase or just re-mortgaging. Providing help is why we’re here! Basically “Get information about 1000s of mortgage deals by taking 15 minutes to speak to 1 adviser.”
Our Team of Brighton Mortgage Experts
We make sure we help you get the best available deal the market can offer, as we are regulated by the Financial Conduct Authority (FCA). You’ll get to understand why you received the mortgage you did, because we have to justify the recommendations we make to both you and our regulators.
Down to Earth Mortgage
We are a team of experienced mortgage insurance experts, driven by honesty, passion and enthusiasm.
Our mortgage insurance experts take pride in listening to the current and future objectives our customers have. These goals will be achieved when we work with you intently.
Why chose Mortgage Saving Experts?
You’ll get an initial rate for the first few years after taking out a mortgage. The lender’s variable rate is implemented after the initial rate is complete. You will be contacted by our team approximately three months prior to the renewal time to agree a new deal, before the monthly payment and rate are increased. Here are some of the other advantages you’ll enjoy if you work with us:
- You can save extra cash, because you’ll get a preferable deal to the bank variable rate.
- You won’t have to remember when the deal is due to end, as we will do this for you.
- You can take a breather, while we do the bulk of the work.
- This is our area of expertise; you’ll always receive advice from a qualified mortgage expert.
- To arrange the best deal for you, we compare and dispense advice with regards thousands of mortgage deals.
- You’ll be supported and expertly advised throughout the whole mortgage process.
Our Approach to Mortgage Advice
We provide personalised services and pay attention to all your specific needs. Our approach to mortgage advice involves three simple steps:
- Let’s have an Initial Chat, so we can get to know You and What Your Requirements Are
- We Search the Entire Market to Find the Best Deal for You
- We’ll Present you with the Cheapest and best Deals Available for Both Mortgages and Insurance Cover
How Mortgage Saving Expert Brokers Can Help you:
What makes our services superior to those of other mortgage brokers in East-Sussex includes:
- Find out what your needs and circumstances are through fact-finding.
- Clarify the costs related to buying and selling.
- Request all documents related to the application.
- Provide explanations and recommendations for the prospective mortgage.
- Provide answers to your questions.
- Get an agreement in principle.
- Have your entire mortgage application sent in.
- Liaise with your estate agent, mortgage lender and solicitor to answer any question through to completion.
Mortgage Types We Provide Expert Advice On
We advise our clients expertly on a vast selection of mortgage products. Working together with us, finding the most suitable mortgage product to suit your needs won’t be difficult at all. Some of the most commonly requested mortgage types we help with include:
First time buyers
First Time Buyers are classed by most mortgage lenders as people who have either:
- Never owned a property or
- People who have owned a property in the past, but not owned one for six months or more.
Every lender has different rules and ideas about this. Being a First Time Buyer is usually not an issue. First Time Buyers must not have owned property anywhere in the world before to be eligible for stamp duty relief for stamp duty purposes.
Mortgages may appear to be a rather difficult process, but they really don’t have to be. Buying your first home is one of the most exciting things ever, so if you find a reasonably priced, reputable broker to manage the process for you, do hire their services. Why you should use one is pretty obvious. If you have no knowledge about cars and yours develops a fault, you would call a mechanic rather than attempt to fix it yourself. With mortgages, it is exactly the same. Mortgage brokers can help you save money, time and effort, so why don’t you use one? You won’t have to pay for the initial consultation.
Buying a home
If you’re considering a home purchase in the near future (or even within a few years, you should certainly brush up on your mortgage knowledge. Learn what to do when applying, within the application process and even how to use a mortgage after buying your home. If you can’t deal with all of that, talk to an adviser who will provide guidance accordingly.
Your credit is of great importance.
A mortgage is of major importance. Since the subprime mortgage crisis in 2008, banks have trodden more carefully in terms of risking money up front. To qualify for a mortgage, good credit is helpful, but not essential. We can also offer guidance regarding how much you can afford to pay for your new home and how to set your limit, depending on your ongoing situation. We will help you with funding, the lowest cost and most suitable deal on offer, in addition to helping you buy your dream home.
Re-mortgage your home
In short, this means you’ll switch from one lender to another to get a more affordable rate or cheaper deal. The two of them don’t have to go hand in hand. Let me clarify this. If your mortgage is a small one, you might find that it isn’t profitable paying an arrangement fee to a lender to secure a lower rate. You may realise that it’s less expensive to go on a slightly higher rate than paying any lender an arrangement fee. Asking for advice before making up your mind about the deal is important, so that you don’t end up with a more expensive deal on the whole, even at a lower rate. Be careful.
One benefit of re-mortgaging is that you’ll not normally pay for any valuation or solicitors fees, although not everyone qualifies for this. This is because only your circumstances are considered at the time of re-mortgaging. So, do find out from your adviser.
A brilliant way to ensure you cut down on your mortgage bills is to re-mortgage on time. Although it can be a good thing – depending on your individual needs – a re-mortgage deal might not be the most suitable choice.
Reasons for remortgaging your property
- Depending on your unique needs, like…
- Mortgage debt isn’t so big.
- Financial circumstances have changed.
- Significant early repayment charge.
- Home value dropped.
- You are having trouble with credit.
- Present rate is very agreeable.
- We will dispense advice on the merits of pursuing a re-mortgage.
Buy to Let
A ‘buy to let’ property is one you want to purchase in order to rent out to tenants. Legally, you cannot live in the property. The number of available lenders will be restricted if you’re a First Time Buyer, purchasing a buy to let property. Also, extra checks are made by the lender in cases like these.
- There are a few things you may need to be aware of when purchasing a buy to let property.
- The loan amount you can borrow is mostly based on the total rental income you receive.
- You’ll have to pay an extra 3% stamp duty on top of your normal stamp duty.
- Even if the value of the property isn’t enough to be liable for stamp duty, you are still required to pay an extra 3% of the purchase price.
- TIP: If you’re purchasing a second property, ask your conveyancer/solicitor about the figure you’ll have to pay.
- A knowledgeable adviser will help find the right mortgage to suit your requirements by asking you the relevant questions.
- To see if you’re eligible, reach out now to our advisers.
How Much Do Mortgage Brokers Charge?
Commission is usually paid to mortgage brokers by lenders; this will be a percentage of the mortgage loan you secure. This is often about 0.33%, even though it largely varies, based on your mortgage needs. For example, a residential mortgage or buy to let and if you’ve had any credit issues recently. Many independent brokers charge flat fees, usually around £500. Don’t forget to find out how brokers collect payment. They must be completely transparent, telling you how much is being charged and what fee structure they use.
The fee structure we adopt is based upon charging the client £695 and deducting from that figure any commission paid by the mortgage lender. If the commission we receive is less than £695, we then ask the client to make up the difference between what we have been paid in commission up to £695. For example, if we received a commission of £495, we would then ask you for a fee of £200 which is payable on production of your mortgage offer, so we are only paid on results.
How Much Can I Borrow?
Many factors affect this, such as how much you earn, the amount you deposit, the number of children you have, as well as any debts you might have in the background. How much a lender is willing to lend is based upon a full affordability assessment, whereby they will look to understand your income, as well as any loan or credit card commitments and regular essential household expenditure. In addition, they also perform a credit check to make sure your credit rating is suitable for mortgage purposes.
Prior to applying for a mortgage in full, obtain a decision in principle to form a clear picture with regards the amount you can borrow. Make plans to meet with one of our experienced mortgage experts now. Initially, we can at least give you an idea, without needing to conduct any credit checks.
The Latest Best Mortgage Rates
Whether you’re looking to re-mortgage, move home, find a first-time buyer mortgage or a buy-to-let, we can help. We compare thousands of the latest mortgage deals, so you can find the one you’re after.
What Our clients say About us
In East-Sussex, we have long and diverse list of satisfied clients. If you aren’t convinced that we are the professionals to make the best possible mortgage deal in East-Sussex at the lowest price, take a look at what some of our customers have said about their experience with us. To get a first-hand experience of the great services we provide, call us today.
Latest Mortgage News
The more information you have to hand in your search for the ideal mortgage arrangement, the greater advantage you’ll have. Below is the latest insightful mortgage news to help you get started on the right path.
Mortgage Regulatory Information
Building societies, specialised mortgage lenders and banks provide the most mortgages across the UK. There is a total of 200 different financial institutions which offer mortgages in Britain, although Lloyds Banking Group and Nationwide Building Society owns the market’s largest share.
Even with regulations in the UK that closely guide banks and building societies, a regulatory scheme was set up just for mortgages (as a result of the Financial Services Act 2000) by the FCA (the former Financial Services Authority).
The FCA regulates the professional behaviour of mortgage providers. There are strict rules regarding the use of unfair, misleading adverts and promotions, as well as checks to make sure the terms of any contract for financial services are fair for the consumer. Regulations were originally set out in the rules for Mortgage Conduct of Business (MCOB), but these were overhauled as a result of the FCA Mortgage Market Review (MMR) in 2014.
With regards their financial conduct, deposit-taking firms in the UK come under the jurisdiction of FCA’s sister organisation, the Prudential Regulation Authority. They make sure firms have capital large enough to cancel out their lending risks.
The first step in tackling any issue you have with regards your mortgage provider is to take it up with them. If you feel it hasn’t been dealt with to your complete satisfaction, there is a complaints procedure which can be referred to the Financial Ombudsman Service. Some mortgages are not regulated by the Financial Conduct Authority such as moist Buy to Let mortgages and if you make a complaint about these you are unable to take these to the Financial Ombudsman Service
What To Ask Your Brighton Mortgage Broker?
This is a logical follow-up question. Again, insist on a specific reply.
And once you’ve received answers to these questions, ask if the broker would be willing to put both claims in writing. That will indicate how seriously those claims should be taken.
If a problem arises during the loan application process, you’ll want your broker to respond quickly – hence this question.
Again, demand a specific answer – “Within three hours”, say, rather than “Quickly”.
The reason for this question is so you can discover whether the broker will closely guide you through what is a complicated and stressful process – or expect you to figure it out for yourself.
Organising finance and purchasing property can be complicated and stressful, so you want to know you’re in safe hands. That’s why, before you settle on a particular broker, you should challenge the broker with this question.
Don’t let the broker get away with vague statements like “Because I’m the best” or “Because I provide great service”. Use follow-up questions to demand detail. “What specific things make you better than other brokers? What, specifically, do you do to deliver great service?”
Another important question to ask. That’s because while most brokers focus on ‘plain vanilla’ clients, others might focus on, say, sophisticated investors or borrowers with credit problems.
Hypothetically; Broker A might have done 450 vanilla loans and 50 bad-credit loans, while Broker B might have done 50 vanilla loans and 250 bad-credit loans. So if you were a borrower with credit problems, you might be better off with Broker B.
Next, probe them about their customer service standards
A great way to utilise the knowledge and experience of a broker is to get them to work out the true cost of your home loan. Based on whether you’re paying Repayment or interest only, how much of a deposit you have, the length of your loan term and the rates payable your broker will be able to obtain a mortgage illustration which will have the true cost on it. This is normally depicted by the Annual Percentage Rate (APR)
By maximising your deposit amount and minimising your loan term, you stand to significantly reduce the overall cost of your loan. However, there is much more to answering what the true cost of your home loan will be. Upfront fees such as valuation fees, conveyancing and legal fees need to be added to the total cost. Ongoing fees such as those you can incur for using a drawdown facility.
While it’s impossible to forecast the entire cost of your mortgage to the penny – and let’s not forget how life circumstances and changes can affect your ability to pay your loan too – a broker can can help clarify the big picture details. Mortgage Saving Experts can recommend any protection or insurances to protect you and your family to cover life unfortunate eventualities and our team of advisers can use this information to help you decide which loan is best for your circumstances.
The big question plaguing home buyers tends to be, ‘how much can I borrow?’ Each lender is massively different in this area so as a maximum depending on many factors. In the majority of cases, you can borrow up to around 5 times your gross annual salary but in some instances, you may borrow up to 5.5 times your gross annual income
Once you speak to us, however, we’ll be able to give you a much more accurate indication of your borrowing capacity. Brokers act as the go-between for you and the lender. Lenders will need to know your living expenses, debts, credit score and whether you have dependents. A broker can factor all these things into the right loan.
A broker can also explain home loan terms you’ll need to know, such as LTV, which is the initialism for Loan-to-Value and refers to the percentage of the total loan amount you seek to borrow as a percentage of the property purchase price or value. They can also explain things like the differences in interest rates and repayment types such as Interest Only and Repayment (Capital & Interest)
This is a good follow-up question to ask, as it will give you a better understanding of the mortgage broker’s experience.
For example, imagine two brokers joined the industry in 2013, but that Broker A had written 500 loans during that time and Broker B had written 300. In that case, even though both parties would be able to claim five years of industry experience, there would be a clear difference in hands-on experience.
This is a good place to start, because a more experienced broker will generally be more knowledgeable than a less experienced broker.
Press the broker to give you a specific answer, such as “Eighteen years” or “I’ve been a broker since 2007 and in the mortgage industry since 2001”, rather than something vague like “I’ve got a lot of experience”.