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 exist to find a bank or direct lender that will be willing to make the specific loan an individual requires. Finding a good deal for a mortgage loan in Witham will be easier if you work with a mortgage broker. Even if you have a poor credit score or any other issues that could affect your mortgage application, working with a reputable mortgage broker will still boost your chances considerably.
There are regulations in place to guide professional mortgage brokers and make sure they adhere to banking and finance laws in the jurisdiction of customers, so you can be sure you’re in good hands.
What Is A Mortgage?
A mortgage is in effect a loan. Unlike personal loans, a mortgage is specifically tied to a piece of property, so that it acts as security against the loan. Mortgage providers can rightfully take back (repossess) the property if you default on your payments.
While shorter or longer terms are available, mortgages are usually set for a 25-year period. Once you’ve borrowed the money, a repayment plan is then set in place. Even though the available mortgage plans vary, those that involve repayment plans on a monthly capital basis are very popular.
You won’t only have to repay the capital (the money you borrowed), but also the interest on it. 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. Individuals and businesses use mortgages to buy property, without having to pay the total value up front. Over a period of many years, the borrower repays the loan (plus interest) until they eventually own the property outright, without any mortgage. The lender can repossess the property against which the mortgage is secured if the borrower does not keep up with mortgage payments.
The bank has a charge on the house; should the home buyer default on paying the mortgage, then the lender may repossess the property. In the case of a repossession, the bank may evict the home’s tenants and sell the house, using the income from the sale to clear the mortgage debt.
Mortgages come in many forms. Borrowers must still pay the same interest rates on fixed rate mortgages as they would for the initial terms of two, three or five years, even though fixed-rate mortgages are available in longer terms. 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 borrower’s mortgage repayments do not change if the market interest rates rise or fall 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. If you have a diary system in place or a switched-on broker, you must remember to re-mortgage or contact your existing lender and change the rate three months before it increases to the variable rate. This is because the rates can increase or decrease as the lender sees fit, which will help you avoid higher monthly payments.
In fact, the initial interest rate is usually a low rate, which can make a mortgage appear less expensive than it is. If interest rates rise later on, the monthly rates may become too high for the borrower to pay. 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. Our mortgage brokers in Witham can provide help for getting the best mortgage deal to suit your personal specifications and requirements.
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. 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. Find out how much you’ll have to repay every month instantly by simply entering those values with your term and pressing ‘Click to calculate’.
Why Use A Mortgage Broker?
There are a variety of advantages that come with working on your mortgage application with a mortgage broker in Witham. Of these benefits, some of the most evident include:
The possibility of saving money is the most obvious advantage of working with a mortgage broker. You’ll just need to fill out some details and an experienced professional with your best interests in mind will deal with the hard work.
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? As understandable as such thoughts are, it’s important to understand that mortgage brokers have nothing to gain by not working in your best interests.
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. Many mortgage brokers can obtain exclusive mortgage deals not found on the high street, potentially making the total loan cost lower for the client. Reputable mortgage brokers communicate how they expect to be paid for their services, as well as outline the details of the entire 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
For a mortgage broker, your interests – rather than those of the lending institution – are paramount. 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. To ascertain your goals and needs (both short and long term), you’ll be interviewed by the mortgage broker. 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
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, if borrowers face credit issues, the broker will know which lenders offer the best products to meet their particular needs. 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 isn’t only about money. As much as it’s important to save some extra money, your time and sanity are important as well. Consider how much time it would take you to research multiple loan types from multiple lenders. Unlike working with different lenders – which would require you to complete different forms every time – you’d only need one form with a mortgage broker. A formal comparison of the loans recommended can be provided by your mortgage broker to act as a guide for the information that accurately illustrates the differences in cost, showing present rates and points, as well as closing costs for each loan. To find the best deal in terms of lower rates and overall cost, your broker will make comparisons between popular and less popular lenders.
Outsourcing the work to someone who can provide an expert opinion is a great way to relieve yourself of the burden involved. 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. These features can include drawdown facilities, the option to make extra repayments and offset accounts to name a few. Features like these can make a huge difference to your mortgage costs and overall experience. 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
Brokers have access to exclusive deals which the banks do not announce. The deals are pushed by the banks on to the brokers, who are then charged with overseeing the sale of products. Talking to a broker can release these extra perks, which you’d otherwise not enjoy by contacting the bank yourself.
Brokers can search the whole market for the finest deal, whereas individual banks can only offer their own deals and not those of other banks.
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. Brokers are knowledgeable and have the much-needed experience to give you a better shot at approval the first time you apply.
Access to expert knowledge
The job of a mortgage broker is to help people secure loans. They have access to information and select deals you wouldn’t discover by yourself. If you aren’t looking for them, you’re likely to miss the subtle details that come with loans. At the end of the day, these subtleties tend to improve your mortgage chances. It is a huge plus to have the services of an experienced expert to show these things to you.
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. For home loan requirements, a mortgage broker is the best ways to go, just as a hairdresser is for replenishing damaged hair and a plumber for fixing leaking pipes.
About Mortgage Saving Experts
Mortgages and insurance are not as complicated as they might first seem. This is why it’s very important to find honest advisers, who are knowledgeable and experienced. Our Mortgage Saving Experts will make your journey as seamless and transparent as possible. After all, why make things more difficult than they need to be? Allow us to ease the entire process and obtain the best deals available for you.
Mortgage Saving Experts provide our clients with honest and transparent services that leave you feeling mortgages and insurance are less complicated than they first appear. All mortgage and insurance applications are handled like they’re our own at Mortgage Savings Experts. This is what we’re primarily concerned with. It doesn’t matter what the situation is – whether you’re a first-time buyer, a landlord, re-mortgaging or moving on to a new phase altogether – Mortgage Saving Experts are here to help. We are here to assist! Essentially “Search 1000s of mortgage deals by taking 15 minutes to speak to 1 adviser.”
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 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 and insurance experts pride themselves on listening to what your current and future objectives are. We will then work together with you to reach these goals.
Why chose Mortgage Saving Experts?
For the first few years after taking out a mortgage, you’ll be subject to an initial rate. After the initial rate period, the rate is then raised to the lender’s variable rate. 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. Some other reasons for which it’s beneficial to work with us include:
- You’ll save some money, as the deal you get is better than the bank variable rate.
- We will help you keep abreast of the expiry dates for deals, so you won’t have to worry.
- 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 undertake comparisons and then advise and arrange the best mortgage for you, choosing from thousands of deals.
- Expert advice and support will be available to you through the entire 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 Witham includes:
- Get to determine your situation and requirements by fact-finding.
- Point out the costs that come with buying and selling.
- Ask for related documents to help with the application.
- Propose and explain the likely mortgage.
- Provide answers to your questions.
- Collect an agreement in principle.
- Have your entire mortgage application sent in.
- We will collaborate with your estate agent, solicitor and mortgage lender and reply to any questions through to completion.
Mortgage Types We Provide Expert Advice On
We dispense expert advice on a wide 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 classified by the majority of mortgage lenders as those 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 not generally considered to be a problem. 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 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. It is abundantly clear why you should use one. Besides, if your car breaks down and you have no knowledge of cars, you wouldn’t attempt to fix it yourself; you would use the services of a mechanic. It isn’t any different with mortgages. Mortgage brokers can help you save money, time and effort, so why don’t you 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 can’t deal with all of that, talk to an adviser who will provide guidance accordingly.
Your credit is vital.
A mortgage is serious issue. Banks risk a large amount of money and have been steadily more careful since the subprime mortgage crisis in 2008. Good credit helps to qualify for a mortgage, but it isn’t a necessity. 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
Basically, what you’re doing here is changing lenders to get a more suitable rate or cheaper deal. They don’t always sit well together. Let me simplify this for you. 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. You may realise that it’s less expensive to go on a slightly higher rate than paying any lender an arrangement fee. 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 advantage of re-mortgaging is that you won’t have to pay any valuation or solicitors fees. That said, not everyone is eligible for this exemption. This is because it is dependent on your circumstances alone at the time of re-mortgaging. So, please check with your adviser.
A smart way to significantly minimise the cost of your mortgage bills is to undertake a 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
- Based on your specific needs, such as…
- Mortgage debt isn’t so big.
- Financial circumstances have changed.
- Expensive early repayment charge.
- Decrease in home value.
- You have credit problems.
- Already on a great rate.
- We will guide you when deciding to re-mortgage or not.
Buy to Let
A property bought with the purpose of renting to tenants is known as ‘buy to let’. Legally, you aren’t allowed to 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, 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.
- A payment in respect of an extra 3% stamp duty will be required after 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: You should ask your solicitor/conveyancer to figure out how much you must pay when considering buying a second property.
- 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. While the figure varies widely, it is generally set at around 0.33%, depending on the type of mortgage you require. For example, this could be a residential mortgage or buy to let and would take into account whether you’ve had any credit troubles recently. Most independent brokers charge a flat fee, which is typically around £500. Be sure to find out from brokers how you pay them. The should be totally transparent, disclosing the amount to be charged, as well as their available fee structure.
For our fee structure, we charge clients £695; any commission we receive from mortgage lenders is subtracted from that figure Our client will be asked to pay the difference between the commission we are paid and £695, if the amount of commission is less than £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 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. 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 today for an appointment with one of our capable mortgage experts. Initially, we can at least give you an idea, without needing to conduct any credit checks.
The Latest Best Mortgage Rates
Our services are available whether you want to re-mortgage, move home, purchase a buy to let or procure a first-time buyer mortgage. We compare recent mortgage deals in large quantities to help you find just what you want.
What Our clients say About us
The list of happy clients in Witham is a lengthy and diverse one. If you’re not yet persuaded that we are the experts who can get you the best mortgage deal in Witham 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
Having more information at your disposal when looking for the most ideal mortgage deal places you in a more advantageous position. To provide insight and help you get started, find recent news on mortgages below.
Mortgage Regulatory Information
In the UK, most mortgages are provided by building societies, specialised mortgage lenders and banks. 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.
Even though UK banks and building societies have always been regulated closely, the FCA (formerly the Financial Services Authority) put a regulatory scheme in place for mortgages, because of the Financial Services Act 2000.
The professional services of mortgage providers are monitored by the FCA. 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 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.
In terms of their financial conduct, organisations collecting deposits in the UK fall under the Prudential Regulation Authority, the FCA’s sister organisation. They ensure firms have a sizeable enough capital to balance out their lending risks.
Taking up the matter with your mortgage provider is the first step to take if you have any complaints about them. You utilise a complaint procedure via the FCA if you don’t think it has been suitably dealt with. In turn, this can be referred to the Financial Ombudsman Service if deemed 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”.