What is a mortgage broker
A mortgage broker represents individuals or companies looking to broker mortgage loans. The purpose of mortgage brokers is to look for banks or direct lenders that will willingly provide the specific loan an individual would need. Working with a mortgage broker in Southminster will help you get the mortgage loan you require at a favourable deal, without any unnecessary stress. Even with complicated circumstances or a poor credit score, the ideal mortgage broker will boost your chances of getting a mortgage.
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 simply a loan. Unlike personal loans, a mortgage is specifically tied to a piece of property, so that it acts as security against the loan. The property can be rightfully taken from you (repossession) by your mortgage provider if you do not make payments on time.
While shorter or longer terms are available, mortgages are usually set for a 25-year period. As soon as you borrow the money, a plan for repayment is implemented. Even though the available mortgage plans vary, those that involve repayment plans on a monthly capital basis are very popular.
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. The loan and interest attached needs to be paid back over some years before the borrower can own the property without a mortgage. The lender can repossess the property against which the mortgage is secured if the borrower does not keep up with 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. If there is a repossession, the tenants can be evicted by the bank and the property sold to repay the mortgage debt.
Mortgages come in various guises. Even though there are longer fixed rate mortgage terms available, the borrower would have to pay the same interest rate for the initial terms of two, three or five years. 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. The borrower’s mortgage repayments do not change if the market interest rates rise or fall if they have 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. 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 can seem less costly than it really is, with the initial interest rate often being a low rate. The borrower might not be able to keep up with higher monthly payments, should the rates be later increased. Monthly payments after the initial term are usually unpredictable, since the variable rates could be changed at any time.
Other types of mortgages exist that are not so common. However, they may be available to you, so talk to an independent broker about such options, which include offset mortgages, interest-only mortgages, buy to lets, secured loans, tracker rates and bridging loans. You can receive assistance from our mortgage brokers in Southminster to find a mortgage deal that best matches your individual specifications and circumstances.
Handy Tools and Calculators
Being aware of what you can borrow and the amount the loan will cost will make it simpler to plan your future. Find out just how much your mortgage repayments are going to be, dependent on your interest rate and full loan amount, using this handy calculator. To immediately determine how much you’ll have to repay each month, simply enter the values and your term before pressing ‘Click to calculate’.
Why Use A Mortgage Broker?
Working with a mortgage broker for your mortgage application in Southminster can be beneficial in various ways. Some of the more obvious benefits include:
The most obvious benefit of choosing a mortgage broker is the potential to save money. You’ll be required to complete a few details, but the hard work is managed by an experienced professional, who has your best interests in mind.
Some people are not fully convinced about this, what with the concept of a mortgage broker still vaguely understood universally. So, there has to be a catch somewhere, surely? 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.
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. 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. A reputable mortgage broker will disclose how they are paid for their services, as well as detail the total cost of the loan. For a mortgage advisor company, a positive user experience is higher on the value chain than lining the pockets of an individual broker.
Finds The Most Advantageous Deal
A mortgage broker will work towards protecting your interests, rather than those of the lending institution. They shouldn’t just play the role of your agent, but also those of problem solver and knowledgeable consultant. You can get the best value as per interest rates, loan products and repayment amounts thanks to the wide range of mortgage products to which a broker has access. Mortgage brokers will interview you to identify your needs, as well as short and long term goals. Amongst the benefits of working with experienced mortgage brokers are innovative mortgages and sophisticated solutions, because regular 15 or 30-year mortgages aren’t usually sufficient. These include money for children or carrying out much needed renovations, mortgages to raise capital for repaying debts or even money to buy other properties like buy to lets.
Has Flexibility Expertise to Meet Your Needs
Any problems that may arise can be dealt with by a mortgage broker, who will oversee the whole process, guiding the client through any situation along the way. 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. 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’s not all about money. While it’s a good thing to save some extra money, your sanity and time matter just as much. Give a thought to the amount of time you’d have to invest when enquiring about various loan types from numerous lenders. You would only have to fill out one application form, instead of one for every lender you have to work with. The loans recommended can be formally compared for you buy your mortgage broker. This will serve as a guide to the information which correctly shows cost differences, with present rates, points and closing costs for each loan illustrated. 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.
You don’t have to burden yourself with all the work, as outsourcing is a viable option to take in order to gain expert advice. A mortgage broker can do a lot of the work by providing you with support throughout the application and approval process. This might involve completing all paperwork, helping you with applications to government schemes, answering questions and explaining the options and loan features, about which you may not have been aware. Drawdown facilities, offset accounts and extra repayments (to name a few) are just some of the features involved. Features like these can make a huge difference to your mortgage costs and overall experience. 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
Brokers have access to exclusive deals that aren’t advertised by the banks. The banks push these deals on to brokers, who are in charge of selling the products. Going to the bank directly could cause you to miss out on added benefits such as these, which you can procure by speaking to a broker.
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
A mark is left on your credit rating if your request for an Agreement in principle/Decision in principle of a loan is turned down. Brokers have the knowledge and experience required to give you the best shot at being approved at the first attempt.
Access to expert knowledge
Mortgage brokers help people secure loans for a living. Helpful information and exclusive deals you won’t find yourself are accessible to them. There are small details accompanying loans that you might miss if you’re not looking for them. At the end of the day, these subtleties tend to improve your mortgage chances. Having the services of an experienced professional who can point these out for you is a huge benefit.
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 complicated as they might first seem. Finding an adviser who is reliable, knowledgeable and has significant experience is very important for this reason. Our mortgage savings experts will make your task as easy and straightforward as possible. Why complicate things more than necessary, after all? Allow us to ease the entire process and obtain the best deals available for you.
Mortgage Saving Experts provide an honest and transparent service that will leave our customers thinking that mortgages and insurance aren’t as daunting as they may seem. At Mortgage Saving Experts, we treat each mortgage and insurance application as if it were our own. 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! Essentially “Search up to a thousand mortgage deals by talking to an adviser for roughly 15 minutes.”
Our Team of Brighton Mortgage Experts
Due to regulations by the Financial Conduct Authority (FCA), we must do all we can to get you the most suitable deal on the market. We need to provide justification to our customers and regulators for recommending the mortgages we do, so you understand just why you have that particular mortgage.
Down to Earth Mortgage
We are an honest team of mortgage insurance experts, who are enthusiastic, passionate and widely experienced.
Our mortgage insurance experts take pride in listening to the current and future objectives our customers have. We then work closely with you to achieve those goals.
Why chose Mortgage Saving Experts?
After taking out a mortgage, you’ll get an initial rate for the first couple of years. The lender’s variable rate is implemented after the initial rate is complete. Three months before this rate is up for renewal, our team will contact you again to put a new deal in place before your rate and monthly payments increase. Included below are the plus points of working with us:
- You’ll get a better deal than the bank variable rate and subsequently save money.
- You don’t have to remember when your deal finishes, as we will do this for you.
- You can take time to relax, while we handle the stress for you.
- 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.
- You’ll receive expert advice and support throughout the entire mortgage process.
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:
What makes our services superior to those of other mortgage brokers in Southminster includes:
- 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.
- Reply to any questions you have.
- An agreement in principle will be put in place.
- Submit your full mortgage application.
- Answer any questions and work together with your mortgage lender, solicitor and estate agent until the final stages.
Mortgage Types We Provide Expert Advice On
We advise our clients 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. Amongst the mortgage types we’re commonly asked to handle are:
First time buyers
Many mortgage brokers consider First Time Buyers 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. There usually are no issues in 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.
While mortgages may look like a tedious process, they don’t have to be. It’s rather exciting to be buying your first home, so if you find a reputable broker to get the job done for you at a fair price, then do use one. The purpose of using one is straightforward enough. If you have no knowledge about cars and yours develops a fault, you would call a mechanic rather than attempt to fix it yourself. It’s the same with mortgages. 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 thinking of a home purchase any time soon – or even within a couple of years – you should familiarise yourself with everything involved with mortgages. 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. 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 won’t just facilitate the purchase your dream home, we will also help you fund it with the lowest cost and most favourable mortgage deal on offer.
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 don’t automatically go hand in hand. Let me explain. If you’ve got a small mortgage, paying the arrangement fee to a new lender to go on a lower rate might not seem practical to you. Being on a rate that’s a bit higher may seem more agreeable to you than paying an arrangement fee to any lender. 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. Pay close attention.
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 due to the fact that it is based solely on your disposition at the time of re-mortgaging. So, please make enquiries with your adviser.
Performing a re-mortgage in time is a practical way to reduce your mortgage costs significantly. 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 individual circumstances, such as…
- Mortgage debt is considerably small.
- The financial situation is no longer the same.
- Significant early repayment charge.
- A drop in the value of your home.
- 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 bought with a view to renting to others. You are not allowed to legally live in the property. You can purchase a buy to let property as a First Time Buyer, but you’ll be restricted to the number of available lenders, while extra checks will be made by the lender in such situations.
- There are some things you might want to know 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 be required to pay a 3% stamp duty after your normal stamp duty.
- If the property is below the value at which stamp duty becomes liable, you will still have to pay the extra 3% of the purchase price.
- TIP: If you want to buy a second property, find out the amount you’ll be require pay from your conveyancer/solicitor.
- 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.
- Get in touch with our advisers to see if you’re eligible.
How Much Do Mortgage Brokers Charge?
A percentage of your mortgage loan is paid as commission to many mortgage brokers by lenders. 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. Most independent brokers charge a flat fee, which is typically around £500. Be sure to ask brokers how you can pay them. The should be totally transparent, disclosing the amount to be charged, as well as their available fee structure.
We have a fee structure based on charging our clients £695. From that figure, we then deduct any commission received from the mortgage lender If the commission paid to us falls short of £695, our client will then be asked to make up the difference between the commission we receive and the figure of £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 depends on several factors, such as the deposit value and how much you earn, how many children you have, as well as what debts (if any) you have in the background. 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.
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. We can at least give you an idea, without having to do any credit checks at the initial stage.
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 recent mortgage deals in large quantities to help you find just what you want.
What Our clients say About us
In Southminster, we have long and diverse list of satisfied clients. If you still have doubts about our ability to professionally provide the best deal in Southminster at the cheapest price, see for yourself 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 can be found recent news on mortgages to provide the insight you need to get started.
Mortgage Regulatory Information
Building societies, specialised mortgage lenders and banks provide the most mortgages across the UK. In total, there are roughly 200 financial institutions that provide mortgages in Britain, even though the biggest share of the market is owned by Lloyds Banking Group and Nationwide Building Society.
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 FCA monitors the professional conduct of mortgage providers. Strict rules are in place against using false or unfair adverts and promotions, in addition to checks to ensure the terms of contracts for financial services are fair for the consumer. 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).
The Prudential Regulation Authority (a sister organisation to the FCA) presides over deposit-taking organisations in the UK, with regards their financial conduct. They make sure firms have capital large enough to cancel out 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 don’t like how the issue has been dealt with, you can take your complaint 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”.