What is a mortgage broker
To broker a mortgage loan, a mortgage broker will act as a link on behalf of an individual or business. Mortgage brokers strive to find a bank or direct lender that will agree to meet the particular loan an individual requires. You’ll have a stress-free time getting a great deal on the mortgage you need in Chigwell if you work with a mortgage broker. If you work with a reputable mortgage broker and have a poor credit score or any other issues that could affect your mortgage application, your chances would be greatly improved.
With regulations in place to make sure professional mortgage brokers follow banking and finance laws in the relevant customer jurisdiction, you won’t have to worry about being in the wrong hands.
What Is A Mortgage?
Simply put, a mortgage is a loan. A mortgage is specifically linked to a piece of property so that it acts as security against the loan, which makes it different from personal loans. Failure to pay when due can result in your mortgage provider taking back (repossessing) the property, as would be their legal right.
Typically, mortgages are laid out for a set period – usually 25 years, although shorter or longer terms are also possible. A repayment plan is arranged as soon as you borrow the money. Mortgages with monthly capital repayment structures are the most common, even though there are other options available.
Aside from repaying the money you borrowed initially, you will be charged interest on the amount you’ve been loaned (the ‘capital’). A mortgage – secured by the collateral of the property involved – is a debt instrument that the borrower must repay against the agreed pre-set payment instalments. Large properties can be bought by individuals and businesses via a mortgage facility, whereby they don’t have to pay the entire cost immediately. Over a period of many years, the borrower repays the loan (plus interest) until they eventually own the property outright, without any mortgage. Failure to make mortgage payments can result in the lender taking back the property used as collateral for the mortgage.
The bank will have a charge on the property, so the lender may repossess it if the home buyer does not make the mortgage payments. 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. While there are longer fixed rate terms provided, the borrower will pay the same interest for the initial term; that is, two, three or five years, with a fixed rate mortgage. Monthly payments remain constant during the fixed rate term. An increase in interest rates in the market won’t change the payments of the borrower if they have a fixed rate. An increase or decrease in the market interest rate will not affect the borrower’s mortgage repayments if they have a fixed rate.
Your mortgage will usually revert to a ‘standard variable rate’ laid down by the bank, building society or lender that lends you the money, once the fixed rate ends. 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. Higher monthly payments may be hard to meet for the borrower if interest rates are increased later. Variable rates after the initial term can be changed at any time, causing monthly payments to be rather 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. Our mortgage brokers in Chigwell can help you find the most suitable mortgage deal to match your unique needs and circumstances.
Handy Tools and Calculators
With a clear idea of the maximum you can borrow and how much the loan will cost, it then becomes easier to plan your future. Take advantage of this handy calculator to determine exactly how much your mortgage repayments will be, based on your total loan figure and interest rate. Simply fill in the values plus your term and press ‘Click to calculate’ to immediately discover the amount you must repay monthly.
Why Use A Mortgage Broker?
There are a variety of advantages that come with working on your mortgage application with a mortgage broker in Chigwell. Some of the more obvious benefits include:
In working with a mortgage broker, the most noticeable benefit would be the opportunity to save money. An experienced expert can take care of the hard work and see to it that your interests are protected. You’ll only need to provide a few details.
Some people are sceptical about this – especially with the concept of a mortgage broker not yet universally understood. There must be a catch somewhere, surely? While this train of thought is understandable, be assured that most mortgage brokers don’t have an incentive to work against your best interests.
If the broker cannot provide genuine reasons for recommending the mortgage they have (to you, their regulators, the Financial Conduct Authority or the Prudential Regulation Authority), then they could be in serious trouble. Exclusive mortgages deals exist on the lower end that can be obtained by a number of mortgage brokers, possibly making the total cost of the loan that bit lower. A reputable mortgage broker will disclose details of how they take payment for their services and convey the components which make up the entire mortgage cost. Filing the pockets of a broker is of little value to a mortgage advisor company when compared to making sure customers have a positive experience.
Finds The Most Advantageous Deal
A mortgage broker represents your interests, rather than those of a lending institution. Acting as your agent isn’t all they should do, but also problem solvers and knowledgeable consultants too. For terms like interest rates, repayment value and loan products, you can get the best possible value from a broker, who has access to a wide array of mortgage products. Mortgage brokers will interview you to identify your needs, as well as short and long term goals. Sophisticated solutions and innovative mortgages are distinct advantages of working with experienced broker, because simple 15 or 30-year mortgages aren’t enough in some situations. These include mortgages to raise capital for debt repayment, money for your children, important home renovations or even the purchase of other properties like buy to lets.
Has Flexibility Expertise to Meet Your Needs
A mortgage broker will work with the client in any situation, as well as manage the process and take care of any bumps in the road that may occur. For instance, a broker will have knowledge of the lenders who offer the best products to meet the needs of a client with a credit issue. The knowledge and capability of a broker to successfully source financing will be of great benefit to a borrower who realises the loan they need may be too large for a bank to approve.
Save Time & Hassle
It isn’t only about money. Your time and sanity are just as important as saving a bit of extra cash. 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. Your broker will set deals from major and less popular lenders side by side in order to discover an agreeable deal, with rates and total costs that are lower.
By outsourcing, you can reduce the workload and get someone else’s professional advice. A mortgage broker can provide an array of support throughout the application and approval process. This can include assisting with paperwork, responding to questions and helping with government scheme applications, as well as explaining all the available options and loan features you may not have considered or been aware of. Drawdown facilities, offset accounts and extra repayments (to name a few) are just some of the features involved. These features can make a massive difference to your mortgage experience and overall costs. Better still, your broker can answer any questions you might have over the phone or provide clarity if you don’t know much about these concepts and the impact they could have on you.
Access to exclusive non-advertised deals
Exclusive deals not advertised by banks can accessed by mortgage brokers. The banks pass these deals on to the brokers, who are responsible for selling the products. Speaking to a broker unlocks these extra perks you would otherwise miss out on by going directly to a bank.
Unlike brokers who have access to the whole market to search for the best deals, banks can offer their own deals alone – and not the deals offered by other banks.
Better chance of pre-approval success
If your request for an Agreement in principle/Decision in principle of a loan is turned down, a mark is left on your credit rating. With the required knowledge and experience brokers possess, you’ll have a better chance at approval the first time around.
Access to expert knowledge
Mortgage brokers assist people with obtaining loans as part of their job. They can access useful information and exclusive deals you likely couldn’t find yourself. There are small details accompanying loans that you might miss if you’re not looking for them. In the long run, subtleties like these are significant to your mortgage. An experienced professional to point you in the right direction is extremely beneficial.
Instead of removing a chunk of your day to conduct voluminous research of loans and multiple lenders as well as possibly missing important subtleties, why not give the work to a person who has ample industry experience? 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 savings experts will ease the process for you and make it as simple as possible. After all, why make things more difficult than they need to be? Let us make things easy for you and make sure we find you the most suitable deal.
You’ll be left thinking that mortgages and insurance are not as difficult as they appear, because of the reliable and transparent service Mortgage Saving Experts provide our customers. At Mortgage Saving Experts, we handle every single mortgage and insurance application like they belong to us. This is what we’re all about. No matter the circumstances – whether this is your first time buying, you’re a landlord, moving onto a new chapter or even re-mortgaging, Mortgage Saving Experts are here to help. Assisting you is the reason 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
As we are bound by regulations of the Financial Conduct Authority (FCA), we must ensure we get you the best available deal on the market. We must justify to our customers and regulators why we make the mortgage recommendations we do, so you know just why you have that mortgage.
Down to Earth Mortgage
We are an honest, enthusiastic and passionate team of mortgage insurance experts, with years of industry experience.
Our mortgage insurance experts take pride in listening to the current and future objectives our customers have. We will make these goals happen by working meticulously alongside you.
Why chose Mortgage Saving Experts?
After taking out a mortgage, you’ll get an initial rate for the first couple of years. The rate is raised to the lender’s variable rate after the initial rate ends. Three months before you’re due to renew, our team will reach out to secure a new deal before your monthly payments and rate increase. Other benefits of working with us include:
- With a deal better than the bank variable rate, you’ll subsequently save money.
- We will help you keep abreast of the expiry dates for deals, so you won’t have to worry.
- You can take a breather, while we do the bulk of the work.
- We know our onions, so you’ll only ever be advised by a qualified mortgage expert.
- We compare thousands of deals, so can advise you accordingly and arrange the very best.
- For the entire mortgage process, you will be expertly advised and supported.
Our Approach to Mortgage Advice
Your individual needs will be duly considered, as we provide fully personalised services. We approach mortgage advice using three basic 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:
Our services are more remarkable than those of other mortgage brokers in Chigwell because:
- Use fact-finding to properly understand your individual needs.
- Point out the costs that come with buying and selling.
- Ask for applicable documents necessary for the application.
- Make relevant suggestions and provide explanations about the prospective mortgage.
- Get answers to any questions you might have.
- Get an agreement in principle.
- Have your entire mortgage application sent in.
- Work with your estate agent, solicitor and mortgage lender to answer any questions comprehensively.
Mortgage Types We Provide Expert Advice On
We advise expertly on a vast selection of mortgage products. In choosing to work with our team, finding the ideal mortgage product to meet your needs will be relatively easy. Mortgage types that we’re frequently asked to handle include:
First time buyers
Most mortgage lenders put people in the First Time Buyers category if they 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.
The rules and ideas on this are different across various lenders. There usually are no issues in being a First Time Buyer. 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. The purchase of your first home can be filled with excitement, so if you discover a well-respected broker to manage the process for a reasonable price, then use one. The reason you should use one is quite apparent. After all, if your car broke down and you knew nothing about cars, you wouldn’t try to fix it yourself. Instead, you would take it to a mechanic. It’s the same with mortgages. With mortgage brokers, you can cut down on money, effort and time, so you should use one. The initial consultation will cost you nothing.
Buying a home
You should brush up your knowledge of mortgages if a home purchase is a viable option for you any time soon (or a few years down the line). Study what you should do before the application, during the process of application, and how to utilise the mortgage after buying your property. If you would rather not take this approach, then instead contact an adviser, who will be able to walk you through the process.
Your credit is a necessity.
A mortgage is a serious affair. Banks put up a lot of money at their own risk. So much so, they’ve been very careful since the subprime mortgage crisis of 2008. Qualifying for a mortgage is boosted by good credit, but it isn’t compulsory. Depending on your present circumstances, we can be your guide on how much you can afford to pay for your new home and help set your cost limit. 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. I’ll explain this clearly. 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 might find it cheaper by going on a slightly higher rate and paying no arrangement fee to the lender at all. 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. Tread carefully.
The potential absence of valuation or solicitors fees is one of the plus points of re-mortgaging, even though not everyone qualifies for this. This is because only your circumstances are considered at the time of re-mortgaging. So, please make enquiries with your adviser.
A mortgage deal conducted at the right time is an effective way to cut the cost of your mortgage bills significantly. Depending on your specific needs, a re-mortgage deal might not be the best option, even though it does have its advantages.
Reasons for remortgaging your property
- Based on your unique circumstances, such as…
- Mortgage debt is considerably small.
- There has been a change in financial circumstances.
- Expensive early repayment charge.
- Home value dropped.
- You have credit problems.
- Present rate is just fine.
- We will advise you whether or not to pursue a re-mortgage.
Buy to Let
A ‘buy to let’ property is one you want to purchase in order to rent out to tenants. You are not allowed to legally live in the property. If you’re purchasing a buy to let as a First Time Buyer, the number of lenders available will be restricted and there will be extra checks carried out by the lender in such cases.
- When purchasing a buy to let property, you’d be required to know quite a few things.
- The loan amount you can borrow is largely dependent on the rental income you receive.
- Other than your regular stamp duty, you will have to pay an extra 3% stamp duty on top.
- An extra 3% of the purchase price will still be required of you, even if the value of the property isn’t high enough for the stamp duty to be liable.
- TIP: If you’re looking to buy a second property, you should ask your solicitor/conveyancer to work out the amount you have to pay.
- To help determine the most suitable mortgage to meet your needs, an expert mortgage adviser will know the specific questions to which you will need to provide answers.
- Contact our advisers to find out whether you’re eligible.
How Much Do Mortgage Brokers Charge?
The majority of mortgage brokers receive commission from lenders, which is a percentage of the mortgage loan you secure. Depending on the type of mortgage you need – whether buy to let or residential mortgage for instance – and whether you’ve had any credit problems of late. The figure is often set at around 0.33%, although this varies widely. The majority of independent brokers typically charge a flat fee of around £500. Be sure to ask brokers how you can pay them. They must be completely clear, letting you know the exact figure and fee structure in place.
For our fee structure, we charge clients £695; any commission we receive from mortgage lenders is subtracted from that figure 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. If we receive a mortgage commission of £495, our client would be required to pay £200, which would be paid after the mortgage offer has been forthcoming, meaning we only get paid according to results.
How Much Can I Borrow?
This is based on a number of factors, such as the amount you deposit, your income, the number of children you have, and any current debts you might have. A total affordability assessment is required to determine how much a lender will agree to lend; this takes into account your income, any loan or credit card commitments you have, as well as regular household expenses. In addition, they will perform a credit check to ensure your credit rating is sufficient for the purpose of a mortgage.
To get an idea of the amount you can loan, get a decision in principle before applying for a mortgage in full. Arrange to see one of our qualified mortgage experts today. We can provide an initial estimate, without the need for any credit checks to begin with.
The Latest Best Mortgage Rates
We can help, whether you’re seeking to re-mortgage, purchase a buy to let, move home or find a mortgage for a first-time buyer. We compare thousands of the latest mortgage deals, so you can find the one you’re after.
What Our clients say About us
We have a list of clients in Chigwell that is both lengthy and diverse. If you’re not yet persuaded that we are the experts who can get you the best mortgage deal in Chigwell at the cheapest cost, see what some of our customers have got to say about working with us. For a first-hand experience of just how amazing our services are, give us a call 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
In the UK, most mortgages are provided by building societies, specialised mortgage lenders and banks. 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.
In the UK, despite there being tight regulations that guide banks and building societies, a regulatory scheme was implemented by the FCA (formerly the Financial Services Authority) in response to the Financial Services Act 2000.
The professional services of mortgage providers are monitored by the FCA. 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 formerly presented in the rules for Mortgage Conduct of Business (MCOB), although they were changed due to the FCA Mortgage Conduct of Business (MMR) of 2014.
Regarding their financial conduct, organisations that take deposits in the UK fall under the FCA’s sister organisation’s jurisdiction, the Prudential Regulation Authority. They make sure firms have a substantial level of capital to offset their lending risks.
If you have a complaint about your mortgage provider, the first step is to take up the matter with them. If you feel it hasn’t been handled properly, there is a procedure that can have your complaint 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?
Again, demand a specific answer – “Within three hours”, say, rather than “Quickly”.
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?”
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.
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
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.
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)
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.
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”.