What is a mortgage broker
Mortgage loans are brokered on behalf of companies and individuals by mortgage brokers, who effectively act as intermediaries. Mortgage brokers function to find banks or lenders that will willingly make the exact loan an individual requires. You’ll have a stress-free time getting a great deal on the mortgage you need in Barking-And-Dagenham 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. A mortgage is not like a personal loan, as it is specifically attached to a piece of property used as collateral against the loan. If you default on your payments, your mortgage provider has the right to take back (repossess) the property.
In essence, mortgages have a set duration – mostly 25 years – although there are shorter or longer terms available. A plan for you to make repayments is drawn up once you’ve borrowed the money. Mortgages with monthly capital repayment structures are the most common, even though there are other options available.
In addition to repaying the original loan (the ‘capital’), you’ll also have to pay interest on top. Acquired by the collateral of a particular property, a mortgage is an instrument of debt the borrower is required to repay, according to a pre-set payment structure. 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 borrower will repay the loan and interest over an extended period of time, until they completely own the property, without any mortgage. Failure to make mortgage payments can result in the lender taking back the property used as collateral for the mortgage.
If the home buyer does not keep up with mortgage payments, the lender can take the property back, as there are bank charges against it. If there is a repossession, the tenants can be evicted by the bank and the property sold to repay the mortgage debt.
There are various types of mortgages. 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 do not change 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. Changes in market interest rates have no effect on the borrower’s mortgage repayment if they have a fixed rate.
At the end of the fixed rate, your mortgage would revert to a ‘standard variable rate’ put in place by the lender, bank or building society from whom you borrow the money. You must remember to re-mortgage if you have a good broker or diary system in place. Alternatively, call your current lender to adjust the rates around three months prior to it being raised to the variable rate. This way, you can avoid paying too much on monthly payments, because lenders can adjust the rates as they deem fit.
In short, the initial interest rate is often a low rate, which can make a mortgage seem more affordable than it really is. If interest rates increase at a later date, the borrower may not be able to afford the higher monthly payments. Variable rates after the initial term can be changed at any time, causing monthly payments to be rather unpredictable.
Talk to an independent broker about other types of mortgages that could be options for you, such as buy to lets, interest-only mortgages, secured loans, bridging loans, offset mortgages and tracker rates, which are not so common. In Barking-And-Dagenham, our mortgage brokers can assist you in finding the ideal mortgage deal to match your unique circumstances and specifications.
Handy Tools and Calculators
Knowing how much you can borrow – as well as the cost of the loan – will help make planning your future easier. 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. Just fill in those values, along with your term and press ‘Click to calculate’ to immediately see the amount you will have to repay per month.
Why Use A Mortgage Broker?
There are a variety of advantages that come with working on your mortgage application with a mortgage broker in Barking-And-Dagenham. Some of the most prominent benefits are:
Of all the benefits working with a mortgage broker provides, the possibility of cutting costs would be the most obvious. You only need to provide a few details, before an experienced professional committed to protecting your interests handles the hard work.
Some people worry about how true this is, considering the entire idea of mortgage brokers is still misunderstood somewhat around the globe. So, where is the catch? Even though this line of thought is understandable, you can rest easy, because not working in your best interests is in no way profitable to a mortgage broker.
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 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. 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. Positive user experience is much more valuable to a mortgage advisor company than padding out an individual broker’s pocket.
Finds The Most Advantageous Deal
A mortgage broker will always be in favour of your own interests and not those of the lending institution. In addition to being your agent, they should also be knowledgeable consultants and problem solvers. A broker has access to many different mortgage products and can therefore offer you great value in terms of relation interest rates, loan products and repayment amounts. To ascertain your goals and needs (both short and long term), you’ll be interviewed by the mortgage broker. 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
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, brokers would know the lenders that can make available the best products for clients with credit issues. If a borrower requires a loan too large for the bank to approve, a broker can be of benefit by providing the knowledge and ability to successfully source financing.
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. You’d only need to complete one application with a mortgage broker, instead of filling out forms for every 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. Comparisons will be made by your broker between popular and less popular lenders to get you the most suitable deal, with lower rates and total cost.
By outsourcing, you can reduce the workload and get someone else’s 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. These types of features can make a significant difference to your mortgage cost and 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
There are exclusive deals that aren’t advertised by banks to which brokers have access. The deals are pushed by the banks on to the brokers, who are then charged with overseeing the sale of products. Contacting a broker will unlock these extra benefits you would miss out on if you were to approach 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. 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 have access to information and select deals you wouldn’t discover by 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. It is a huge plus to have the services of an experienced expert to show these things to you.
Rather than sacrifice a chunk of your day researching thousands of loans and lenders (and still potentially missing out on key subtleties), why not let someone with industry experience handle the work? 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 complex as they seem at first. This is why it’s very important to find honest advisers, who are knowledgeable and experienced. Our mortgage savings experts will make your task as easy and straightforward as possible. Besides, why complicate things more than necessary? Allow us to ease the entire process and obtain the best deals available for you.
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. All mortgage and insurance applications are handled like they’re our own at Mortgage Savings Experts. This is what we’re primarily concerned with. Mortgage Saving Experts are here, no matter what the circumstances, whether you’re a landlord, first time buyer, moving on to a new chapter or just re-mortgaging. We are here to assist! In essence “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 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 a team of experienced mortgage insurance experts, driven by honesty, passion and enthusiasm.
Your current and future goals will be identified by our mortgage insurance experts after talking with you. We will then work together with you to reach these goals.
Why chose Mortgage Saving Experts?
After taking out a mortgage, you’ll get an initial rate for the first couple of years. At the end of this initial rate, this returns 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. Here are some of the other advantages you’ll enjoy if you work with us:
- You’ll get a better deal than the bank variable rate and subsequently save money.
- We can provide updates relating to the end of your deal, so you need not worry.
- We can take care of the hard work for you while you relax.
- We are good at what we do, so you’ll always be advised by professional mortgage experts.
- Comparing, advising and setting up the best possible mortgage deal from amongst the many available is what we do.
- You’ll receive expert advice and support throughout the entire mortgage process.
Our Approach to Mortgage Advice
The services we offer are personalised and take into account your unique needs. The approach we take 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 differentiates our services from those of other mortgage brokers in Barking-And-Dagenham includes:
- Use fact-finding to properly understand your individual needs.
- Explain the costs involved with buying and selling.
- Ask for related documents to help with the application.
- Provide explanations and recommendations for the prospective mortgage.
- Proffer replies to any questions you might have.
- Get an agreement in principle.
- Get your whole 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 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. Some of the most commonly requested mortgage types we help with include:
First time buyers
Most mortgage lenders Categorise First Time Buyers as people who have either:
- Never owned a property or
- People who have owned a property in the past, but not owned one for six months or more.
Every lender has different rules and ideas about this. Being a First Time Buyer is not generally considered to be a problem. In order to qualify for stamp duty relief, it’s necessary for First time Buyers to have never been property owners before; this applies anywhere in the world.
The mortgaging process might appear to be challenging, but this isn’t necessarily so. 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 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 isn’t any different with mortgages. You can save on time, effort and even money with mortgage brokers, so you should use one. The initial consultation will cost you nothing.
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. Find out what to do before applying for a mortgage; during the application process; and how to use it accordingly after purchasing your home. If you would rather avoid any stress, speak to an adviser, who will guide you accordingly.
Your credit is vital.
A mortgage is of major importance. 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. For mortgage eligibility, good credit helps, but isn’t vital. 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 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. They don’t necessarily have to be paired together. Let me make it clearer. If you have a small mortgage, you’ll probably find it’s not worthwhile paying an arrangement fee to the lender just to go on a lower rate. Being on a rate that’s a bit higher may seem more agreeable to you than paying an arrangement fee to any lender. 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. Pay close attention.
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 ask your adviser about it.
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
- Depending on your individual circumstances, such as…
- Mortgage debt is fairly minor.
- The financial situation is no longer the same.
- Significant early repayment charge.
- A drop in the value of your home.
- Existing credit problems.
- Current rate is ideal.
- We will advise you whether to re-mortgage or not.
Buy to Let
‘Buy to let’ properties are those you wish to purchase and then rent to tenants. Legally, you aren’t allowed to 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 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.
- If the value of the property isn’t valued at the amount for which stamp duty becomes liable, you are still required to pay the extra 3% of purchase cost.
- TIP: You should ask your solicitor/conveyancer to figure out how much you must pay when considering buying a second property.
- A good adviser will know the exact questions to pose and will find a mortgage that fits your exact requirements.
- Get in touch with our advisers to find out if you qualify.
How Much Do Mortgage Brokers Charge?
Commission is usually paid to mortgage brokers by lenders; this will be a percentage of the mortgage loan you secure. This is often about 0.33%, even though it largely varies, based on your mortgage needs. For example, a residential mortgage or buy to let and if you’ve had any credit issues recently. The majority of independent brokers typically charge a flat fee of around £500. Be sure to enquire about how to make payments to brokers. They must be completely transparent, telling you how much is being charged and what fee structure they use.
For our fee structure, we charge clients £695; any commission we receive from mortgage lenders is subtracted from that figure If we are paid a commission less than £695, the client is then asked to pay the necessary difference to top it 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 takes into account many factors, such as how much you deposit, the amount you earn, the number of children you have and 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.
For a more accurate idea of how much you can borrow, get a decision in principle before you apply for a mortgage in full. Make plans to meet with one of our experienced mortgage experts now. Initially, we can at least give you an idea, without needing to conduct any credit checks.
The Latest Best Mortgage Rates
We can provide help in many different situations; for instance, re-mortgaging, first time purchase, moving home or buy to lets. 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 Barking-And-Dagenham that is both lengthy and diverse. If you doubt that we are the professionals most capable of finding you the best mortgage deal in Barking-And-Dagenham at the lowest price, check out what some of our customers have to say about their experience with us. For a personal experience to discover how effective our services are, contact us today.
Latest Mortgage News
The more information you have to hand in your search for the ideal mortgage arrangement, the greater advantage you’ll have. Below is the latest insightful mortgage news to help you get started on the right path.
Mortgage Regulatory Information
The majority of mortgages in the UK are made available by banks, building societies and specialised mortgage lenders. 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.
Although banks and building societies have always been closely regulated in the UK, the former Financial Services Authority (now the FCA) implemented a regulatory scheme specifically for mortgages as a result of the Financial Services Act of 2000.
The professional services of mortgage providers are monitored by the FCA. Strict rules exist that monitor the use of dishonest and misleading adverts and promotions, checking to ensure the terms of any contract for financial services are fair to the customer. 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.
With regards their financial conduct, deposit-taking firms in the UK come under the jurisdiction of FCA’s sister organisation, the Prudential Regulation Authority. They ensure firms have adequate capital levels to balance 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”.