What is a mortgage broker
A mortgage broker is sometimes considered a middle man who brokers loans in favour of people or businesses. Mortgage brokers function to find banks or lenders that will willingly make the exact loan an individual requires. Working with a mortgage broker in Maldon will help you get the mortgage loan you require at a favourable deal, without any unnecessary stress. If you have a poor credit score or any other problems that could have an impact on your mortgage application, the right mortgage broker can increase your chances immeasurably.
Also, you can rest easy knowing that professional mortgage brokers must work within regulations that require their compliance to banking and finance laws in the jurisdiction of the consumer.
What Is A Mortgage?
A mortgage is in effect 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. Mortgage providers can rightfully take back (repossess) the property if you default on your payments.
In essence, mortgages have a set duration – mostly 25 years – although there are shorter or longer terms available. A repayment plan is set up as soon as you’re granted permission to borrow the money. Although mortgages which involve monthly capital repayment plans are more common, there are also other types of mortgage available.
You will be required to pay interest on the loan A mortgage is a debt instrument, secured by the collateral of a specified property that the borrower is obliged to pay back via a predetermined set of payments. Where mortgages are concerned, individuals and businesses don’t have to make one-time payments up front for large property purchases. Over a period of many years, the borrower repays the loan (plus interest) until they eventually own the property outright, without any mortgage. The property the mortgage is secured on can be taken back by the lender if the borrower discontinues mortgage payments.
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.
Mortgages come in many forms. With a fixed rate mortgage, the borrower pays the same interest rate for an initial term (i.e. two, three or five years), although longer fixed rate terms are available. 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. The mortgage repayments the borrower makes won’t differ if the interest rates in the market change if they are on a fixed rate.
After the fixed rate ends, your mortgage normally reverts to a ‘standard variable rate’, which is a rate set by the lender, bank or building society that’s lending you the money. Lenders may change the rates as they see fit; to avoid paying higher monthly rates, you must remember to re-mortgage if you have a good broker or diary system in place. Otherwise, call your current lender and adjust the rate around three months before it’s increased to the variable rate.
In fact, the initial interest rate is usually a low rate, which can make a mortgage appear less expensive than it is. An increase in interest rates later on could mean that the borrower would not be able to continue with payments. 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. You can receive assistance from our mortgage brokers in Maldon to find a mortgage deal that best matches your individual specifications 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. With this handy calculator, get a better understanding of how much your mortgage repayments will be, based on your full loan 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?
Working with a mortgage broker for your mortgage application in Maldon can be beneficial in various ways. Of these advantages, some of the more prominent include:
In working with a mortgage broker, the most noticeable benefit would be the opportunity to save money. You don’t have to handle the hard work, as this can be managed by an expert with ample experience, who will make sure your best interests are addressed. All you’ll need to do is fill out some 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? A mortgage broker wouldn’t stand to gain anything by not working in your favour. You’ll need to bear this in mind, even though any concerns you might have are understandable.
In truth, brokers have to provide viable reasons to you, their regulatory body, the Prudent Regulation Authority or the Financial Conduct Authority for recommending the mortgage they have. To not do so could lead to them facing significant problems. There are various inexpensive, exclusive mortgage deals that a number of mortgage brokers can find for their clients that could possibly reduce the total loan cost. Reputable mortgage brokers will usually inform you how they get paid for their services, as well as disclose the details of the entire cost of the loan. 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 represents your interests, rather than those of a lending institution. They should act not only as your agent, but also as a knowledgeable consultant and problem solver. 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. The mortgage broker will talk with you to get a clear picture of 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. If a borrower requires a large loan – considerably more than what the bank will approve – the knowledge and expertise of a broker in securing financing would be a distinct advantage.
Save Time & Hassle
It is not just about money. While it’s a good thing to save some extra money, your sanity and time matter just as much. Consider how much time it would take you to research multiple loan types from multiple lenders. With a mortgage broker, you’ll only need one application, rather than completing forms for each individual lender. Your mortgage broker can provide a formal comparison of any loans recommended, as well as advise on the information which accurately portrays cost differences, reflecting current rates, points, and closing costs for each loan. 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. To be of assistance throughout the entire application and approval process, mortgage brokers do the bulk of the work. This includes handling all the paperwork, helping with applications for government ski schemes, answering questions and providing insight on other options and loan features you may not have given thought to. These features can include drawdown facilities, the option to make extra repayments and offset accounts to name a few. Your general mortgage experience and overall expenses can be largely affected by these features. If you don’t know much about these concepts and how they can work for you, reach out to your broker over the phone for clarification and answers.
Access to exclusive non-advertised deals
Exclusive deals not advertised by banks can accessed by mortgage brokers. These deals are passed by the banks to the brokers, who then have the responsibility of selling the products. Contacting a broker will unlock these extra benefits you would miss out on if you were to approach the bank yourself.
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 you’re knocked back after requesting an Agreement in principle/Decision in principle of a loan, this will leave a mark against your credit rating. Brokers have the knowledge and experience required to give you the best shot at being approved at the first attempt.
Access to expert knowledge
A mortgage broker’s job is to help people obtain loans. 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. It’s these subtleties that can make a difference to your mortgage in the long haul. If you have an experienced professional who can show you these things, you’ll be at a distinct advantage.
You can avoid spending valuable time to research numerous loans and lenders (while perhaps missing fundamental key subtleties) and instead give the work to someone with key industry experience. Just as you would contact a plumber for a leaking pipe or a hairdresser to replenish damaged hair, a mortgage broker is an excellent choice for all your home loan needs.
About Mortgage Saving Experts
Contrary to how they might seem initially, mortgages and insurance are not so difficult. Finding an adviser who is reliable, knowledgeable and has significant experience is very important for this reason. Making the process as straightforward and seamless as it can be is something our mortgage experts will do for you. Besides, why complicate things more than necessary? Allow us to ease the entire process and obtain the best deals available for you.
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. All the mortgage and insurance applications we take care of at Mortgage Saving Experts are treated as if we own them. This is what we do. 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 “Search up to a thousand mortgage deals by talking to an adviser for roughly 15 minutes.”
Our Team of Brighton Mortgage Experts
We make it our duty to get you the best deal the market has to offer, as we are regulated by the Financial Conduct Authority. We are required to justify our reasons for making the mortgage recommendations we do to both you and our regulators, so you can understand why you have the mortgage you have.
Down to Earth Mortgage
We are an honest team of mortgage insurance experts, who are enthusiastic, passionate and widely experienced.
Our mortgage and insurance experts are particularly good at listening to your current and future goals. To achieve these objectives, we will then work hand in hand with you.
Why chose Mortgage Saving Experts?
For the first couple of years, you’re allowed an initial rate after taking out a mortgage. The rate is raised to the lender’s variable rate after the initial rate ends. Before your monthly payment and rate are increased, our team will reach contact you to arrange a new deal roughly three months prior to the date of renewal. Included below are the plus points of working with us:
- With a deal better than the bank variable rate, you’ll subsequently save money.
- You don’t have to keep track of the timeline, as we will look after this for you.
- You can sit back and relax, while we do all the hard work for you.
- This is our area of expertise; you’ll always receive advice from a qualified mortgage expert.
- We compare thousands of deals, so can advise you accordingly and arrange the very best.
- You’ll receive expert advice and support throughout the entire mortgage process.
Our Approach to Mortgage Advice
We offer a personalised service that takes into consideration your unique needs. Three simple steps are taken in our approach to mortgage advice:
- 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 Maldon includes:
- Understand your needs and circumstances via fact-finding.
- Explain the costs involved with buying and selling.
- Ask for related documents to help with 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 full mortgage application submitted.
- Communicate with your solicitor, mortgage lender and estate agent to respond to any questions through to completion.
Mortgage Types We Provide Expert Advice On
We provide professional advice on a broad range of mortgage products. Working together with us, finding the most suitable mortgage product to suit your needs won’t be difficult at all. Amongst the mortgage types we’re commonly asked to handle are:
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.
The rules and ideas on this are different across various lenders. Typically, there are no problems with being a First Time Buyer. To qualify for stamp duty relief, First Time Buyers must have never been property owners in any location in the world previously.
Mortgages can seem a daunting process, but they do not have to be. The prospect of buying your first home comes with a lot of excitement, so if you manage to find a competent broker who can oversee the process at a reasonable price, then go right ahead. Why you should use one is pretty obvious. It stands to reason that you would contact a mechanic if your car became faulty – especially if you knew little or nothing about cars. With mortgages, the same principle applies. You can save on time, effort and even money with mortgage brokers, so you should use one. The initial consultation is free of charge.
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 before applying for a mortgage; what to watch for during the process; and how to use a mortgage after you’ve bought your home. If you prefer otherwise, then instead speak to an adviser who will guide you through it.
Your credit is vital.
A mortgage is of major importance. A lot of money has been risked by banks over the years; notably, they have been more and more cautious since the subprime mortgage crisis of 2008. To be eligible for a mortgage, good credit is useful but not absolutely essential. Based on your present situation, we can also be your guide when it comes to how much you can afford to pay for your new home and what your price ceiling should be. 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
Effectively, all you’d be doing with this is changing to a different lender to find a better or more affordable deal. The two do not necessarily go hand in hand. I’ll explain this clearly. If your mortgage isn’t so big, you might consider it not worthwhile to pay an arrangement fee to a new lender for a low rate. You might find it cheaper by going on a slightly higher rate and paying no arrangement fee to the lender at all. Even if the rate is lower, you could find that you chose a more expensive deal when you add it all up, hence the need to speak to someone before deciding. Tread carefully.
One upside to re-mortgaging is that your usually not required to pay for valuation or solicitors fees, although some people don’t qualify for this. This is because only your circumstances are considered at the time of re-mortgaging. So please check or ask your adviser.
A smart way to significantly minimise the cost of your mortgage bills is to undertake a re-mortgage on time. While a re-mortgage deal can be beneficial for some, it’s not the best move for everyone, as it all depends on your unique circumstances.
Reasons for remortgaging your property
- Depending on your individual circumstances, such as…
- Mortgage debt isn’t so big.
- The financial situation is no longer the same.
- Costly early repayment charge.
- A reduction in home value.
- You’re dealing with credit problems.
- Already on a suitable current rate.
- We will provide guidance to help you choose whether to re-mortgage.
Buy to Let
A ‘buy to let’ property is one you want to purchase in order to rent out to tenants. According to the law, you cannot live in the property. If you’re a First Time Buyer, you can purchase a buy to let property, but the number of lenders available is restricted. There are also extra checks made by the lender in these circumstances.
- When purchasing a buy to let property, there are a few things you’ll need to know.
- 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.
- 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 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 find out if you qualify, contact our advisers today.
How Much Do Mortgage Brokers Charge?
A percentage of your mortgage loan is paid as commission to many mortgage brokers by lenders. 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. 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 transparent, telling you how much is being charged and what fee structure they use.
We charge the client £695 as part of our fee structure; if the mortgage lender pays any commission, it is then deducted 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. 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?
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. 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 will perform a credit check to ensure your credit rating is sufficient for the purpose of a mortgage.
Get a decision in principle before you finish your mortgage application; this way, you can form a clearer idea with regards the amount you can borrow. Arrange for an appointment with one of our certified mortgage experts today. Without the need for credit checks, we can at least provide an initial estimate.
The Latest Best Mortgage Rates
We can provide help in many different situations; for instance, re-mortgaging, first time purchase, moving home or buy to lets. We compare recent mortgage deals in large quantities to help you find just what you want.
What Our clients say About us
Our list of happy clients in Maldon is long and diverse. If you doubt that we are the professionals most capable of finding you the best mortgage deal in Maldon at the lowest price, check out what some of our customers have to say about their experience 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 at your disposal when seeking the best mortgage deal, the better the position you’ll be in. To help you begin on the right path, find recent insightful mortgage news below.
Mortgage Regulatory Information
Building societies, specialised mortgage lenders and banks provide the most mortgages across the UK. In Britain, there are around 200 different financial institutions that make mortgages available, even though Lloyds Banking Group and Nationwide Building Society has the biggest portion of the market share.
Due to the Financial Services Act 2000, a regulatory scheme specifically for mortgages was implemented by the former Financial Services Authority (now the FCA), even though close regulations have always been in place to guide banks and building societies in the UK.
The FCA monitors the professional conduct of mortgage providers. There are stern rules that serve as a guide with regards using unfair, deceitful promotions and adverts, as well as checks for financial service contracts for consumers. Regulations were initially documented in the rules for Mortgage Conduct of Business (MCOB), but were overhauled because of the 2014 FCA Mortgage Market Review (MMR).
In terms of their financial conduct, organisations collecting deposits in the UK fall under the Prudential Regulation Authority, the FCA’s sister organisation. They make sure firms have capital large enough to cancel out their lending risks.
If there is something bothering you about your mortgage provider, talking to them about it is the first step to take. If you think it hasn’t been sorted out satisfactorily, you can take the complaint to the Financial Ombudsman Service if necessary. 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”.