What is a mortgage broker
A mortgage broker is sometimes considered a middle man who brokers loans in favour of people or businesses. 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 Bickley will help you get the mortgage loan you require at a favourable deal, without any unnecessary stress. If you work with a reputable mortgage broker and have a poor credit score or any other issues that could affect your mortgage application, your chances would be greatly improved.
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?
Quite simply, a mortgage is 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.
Mortgages are usually set for a set period of 25 years, but can sometimes be set for longer or shorter terms. 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.
In addition to repaying the original loan (the ‘capital’), you’ll also have to pay interest on top. Secured using the collateral of a particular property, a mortgage is a debt instrument the borrower must repay via a predetermined structure of payment. Mortgages allow individuals and businesses to purchase sizable properties, without paying the entire cost at once. 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.
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.
There are many forms of mortgages. With a fixed rate mortgage, even though there is provision for longer fixed rate terms, borrowers are expected to pay the same interest rate for the initial terms (being two, three or five years). The monthly payment never changes during the fixed rate term. If market interest rates rise, the borrower’s payment does not change on a fixed rate. Changes in market interest rates have no effect on the borrower’s mortgage repayment if they have a fixed rate.
When the fixed rate is over, your mortgage return to a ‘standard variable rate’, which is usually set by the bank or lender from whom you borrow 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 short, the initial interest rate is often a low rate, which can make a mortgage seem more affordable than it really is. An increase in interest rates later on could mean that the borrower would not be able to continue with payments. Because the variable rates can change at any time, the monthly payments are unpredictable after the initial term.
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 Bickley can help you find the most suitable mortgage deal to match your unique needs and circumstances.
Handy Tools and Calculators
You can easily plan your future once you have an idea of the maximum you can borrow and how much the loan will cost. Use this handy calculator to see just how much your mortgage repayments are going to be, based on your total loan amount and interest rate. 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?
In Bickley, working with a mortgage broker on your mortgage application is beneficial in a number of ways. Some of the more obvious benefits include:
The possibility of saving money is the most obvious advantage of working with a mortgage broker. 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.
With limited understanding on the concept of mortgage brokers, some people don’t fully trust this, believing there must be a catch at some point. Although such reservations are not entirely invalid, you should be aware that there is no benefit for mortgage brokers who do not work in your best interests.
In short, a broker is required to give proof of their reasons for recommending the mortgage they have (to you, their regulators, the Prudent Regulation Authority or Financial Conduct Authority) or they could be penalised. To potentially reduce the cost of the entire loan, there are some mortgage brokers who can secure exclusive mortgages deals not available on the high street. Detailing the entire cost of the loan and letting you know how they get paid for their services is the duty of any reputable broker. 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 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. For terms like interest rates, repayment value and loan products, you can get the best possible value from a broker, who has access to a wide array of mortgage products. 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
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. Borrowers who find they need larger loans than their bank will approve can also benefit from a broker’s knowledge and ability to successfully obtain financing.
Save Time & Hassle
It’s never just about money. As much as it’s important to save some extra money, your time and sanity are important as well. Take into consideration the time you would need to research different kinds of loans 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 legwork for you by supporting you throughout the application and pre-approval process. This includes completing all paperwork, answering questions, helping you apply for government schemes and shedding light on options and loan features you may not have considered or even known about. A few of the features may include options to make extra repayments, as well as drawdown facilities and offset accounts. These features can make a massive difference to your mortgage experience and overall costs. If you’re unfamiliar with these concepts and how they might affect you, your broker can clarify and answer any questions via a phone call.
Access to exclusive non-advertised deals
There are exclusive deals not made public by the banks that brokers have access to. The banks pass these deals on to the brokers, who are responsible for selling the products. If you contact the bank yourself, you wouldn’t have access to the extra benefits you would otherwise get 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
If your request for an Agreement in principle/Decision in principle of a loan is turned down, a mark is left on your credit rating. You’ll need the necessary knowledge and experience a broker has to secure approval on your first attempt.
Access to expert knowledge
Helping people secure loans is what mortgage brokers do for a living. They have access to information and select deals you wouldn’t discover by yourself. Loans come with certain subtleties you could miss if you’re not looking out for them. At the end of the day, these subtleties tend to improve your mortgage chances. It’s beneficial to have an experienced professional to point out these things for you.
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? Just like you’d acquire the services of a hairdresser to replenish damaged hair or a plumber for leaking pipes, a mortgage broker is an excellent option for any of your home loan needs.
About Mortgage Saving Experts
Mortgages and insurance might seem really complicated at first, but they’re not. For this reason, it’s necessary to find an honest and knowledgeable adviser, with ample experience. Our Mortgage Saving Experts will make your journey as seamless and transparent 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 offer honest and transparent services to our customers, making them feel that mortgages and insurance are not as problematic as they first appear. 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. We’re here to help! Basically “Search up to a thousand mortgage deals by talking to an adviser for roughly 15 minutes.”
Our Team of Brighton Mortgage Experts
Because we’re regulated by the Financial Conduct Authority (FCA), we strive to get you the best possible 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 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. We then work closely with you to achieve those goals.
Why chose Mortgage Saving Experts?
You’ll get an initial rate for the first few years after taking out a mortgage. The rate is raised to the lender’s variable rate after the initial rate ends. You will be contacted by our team approximately three months prior to the renewal time to agree a new deal, before the monthly payment and rate are increased. Here are some of the other advantages you’ll enjoy if you work with us:
- The deal you’ll get is better than the bank variable rate, which in turn saves you money.
- You don’t have to remember when your deal finishes, as we will do this for you.
- You can take a breather, while we do the bulk of the work.
- 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.
- 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:
Our services are more remarkable than those of other mortgage brokers in Bickley because:
- Understand your needs and circumstances via fact-finding.
- Point out the costs that come with buying and selling.
- Ask for applicable documents necessary for the application.
- Propose and explain the likely mortgage.
- Get answers to any questions you might have.
- An agreement in principle will be put in place.
- 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 offer expert advice on a wide variety 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 frequently requested types of mortgage we assist with include:
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.
The rules and ideas on this are different across various lenders. Being a First Time Buyer is not generally considered to be a problem. To be eligible for stamp duty relief, First Time Buyers are required to never have been owners of property before. This is applicable worldwide for stamp duty purposes.
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. It is abundantly clear why you should use one. After all, if your car broke down and you knew nothing about cars, you wouldn’t try to fix it yourself. Instead, you would take it to a mechanic. The same applies to mortgages. You can cut down on cost, effort and time with mortgage brokers, so why not use one? You won’t have to pay for the initial consultation.
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 prefer otherwise, then instead speak to an adviser who will guide you through it.
Your credit is vital.
A mortgage is serious issue. 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. Good credit helps to qualify for a mortgage, but it isn’t a necessity. 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. In addition to assisting you with the purchase of your dream home, we will also help with financing at minimum cost and the most agreeable mortgage available.
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 of them don’t have to go hand in hand. Let me explain. 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. Being on a rate that’s a bit higher may seem more agreeable to you than paying an arrangement fee to any lender. It’s best to always talk to someone before agreeing any deal, because you don’t want one that’s more expensive overall, even though the rate might be significantly lower. Tread carefully.
The potential absence of valuation or solicitors fees is one of the plus points of re-mortgaging, even though not everyone qualifies for this. This is because it is dependent on your circumstances alone at the time of re-mortgaging. So please check or ask your adviser.
A re-mortgage completed on time is a smart way to significantly reduce the cost of your mortgage related bills. Depending on your circumstances, it might not be the ideal move for you – even though a re-mortgage arrangement certainly has its benefits.
Reasons for remortgaging your property
- Depending on your unique needs, like…
- Mortgage debt is relatively small.
- Financial circumstances have changed.
- Significant early repayment charge.
- Home value dropped.
- You have credit issues.
- Present rate is just fine.
- 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. You aren’t allowed to live in the property by law. 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.
- You may need to know certain things when purchasing a buy to let property.
- The loan amount you can borrow is mostly based on the total rental income you receive.
- A payment in respect of an extra 3% stamp duty will be required after your normal stamp duty.
- You’ll still have to pay the extra 3% of the purchase price, even if the property isn’t valued as it should be for the stamp duty to be liable.
- 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.
- Contact our advisers to find out whether you’re eligible.
How Much Do Mortgage Brokers Charge?
Many mortgage brokers are paid commission from lenders, which represents a percentage of your mortgage loan. Even though the figure isn’t set in stone, it is usually about 0.33%, based on the type of mortgage you require – for instance, a residential mortgage or buy to let. Also, any recent credit issues you may have had would be taken into consideration. A flat fee of roughly £500 is usually charged by the majority of independent brokers. Be sure to enquire about how to make payments to brokers. They must be completely clear, letting you know the exact figure and fee structure in place.
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 we are paid a commission less than £695, the client is then asked to pay the necessary difference to top it up to £695. If we receive a mortgage commission of £495 for example, we would ask our clients to pay us the difference of £200 after the mortgage offer is produced, so we are only paid on results.
How Much Can I Borrow?
Many factors affect this, such as how much you earn, the amount you deposit, the number of children you have, as well as any debts you might have in the background. The amount a lender will agree to lend is determined by a total affordability assessment, which will provide insight regarding your income, regular household expenditures and any credit card or loan commitments you might have. In addition, they also perform a credit check to make sure your credit rating is suitable for mortgage purposes.
To get an idea of the amount you can loan, get a decision in principle before applying for a mortgage in full. Arrange an appointment with one of our qualified mortgage experts today. At the initial stage, we can give you an estimate, without needing to perform any credit checks.
The Latest Best Mortgage Rates
Whether you’re looking to re-mortgage, move home, find a first-time buyer mortgage or a buy-to-let, we can help. We make comparisons on thousands of recent mortgage deals to help you find just what you’re looking for.
What Our clients say About us
The list of happy clients in Bickley 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 Bickley at the cheapest cost, see what some of our customers have got to say about working with us. For a personal experience to discover how effective our services are, contact us today.
Latest Mortgage News
The more information available to you when trying to secure the best mortgage deal, the more advantages you’ll enjoy. 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 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 professional conduct of mortgage providers is regulated by the FCA. There are strict rules regarding the use of unfair, misleading adverts and promotions, as well as checks to make sure the terms of any contract for financial services are fair for the consumer. The original regulations represented in the rules for Mortgage Conduct of Business (MCOB) were reconstructed due to 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 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”.