What is a mortgage broker
Mortgage loans are brokered on behalf of companies and individuals by mortgage brokers, who effectively act as intermediaries. The job of a mortgage broker is to identify banks or direct lenders that would make the actual loan an individual seeks. With a mortgage broker in Broad-Street, you’ll have an easier time procuring the mortgage loan you need at the best possible terms. 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?
Simply put, a mortgage is a loan. A mortgage is specifically linked to a piece of property so that it acts as security against the loan, which makes it different from personal loans. Failure to pay when due can result in your mortgage provider taking back (repossessing) the property, as would be their legal right.
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. Although there are different types of mortgages, the most common is one whereby you are bound to a monthly capital repayment plan.
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. Failure to make mortgage payments can result in the lender taking back the property used as collateral for the mortgage.
The bank will have a charge on the property, so the lender may repossess it if the home buyer does not make the mortgage payments. 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 various types 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. The borrower’s mortgage repayments do not change if the market interest rates rise or fall if they have a fixed rate.
As soon as the fixed rate ends, your mortgage will be returned to a ‘standard variable rate’ set by the bank, lender or building society that lends 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.
In fact, the initial interest rate is usually a low rate, which can make a mortgage appear less expensive than it is. The borrower might not be able to keep up with higher monthly payments, should the rates be later increased. Because the variable rates can change at any time, the monthly payments are unpredictable after the initial term.
Other less common types of mortgages – such as interest-only mortgages, tracker rates, offset mortgages, buy to lets, bridging loans and secured loans – could also be available to you, so speak with an independent broker to determine your options. Our mortgage brokers in Broad-Street can help you find the most suitable mortgage deal to match your unique needs and circumstances.
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 how your interest rate and total loan amount determines your mortgage repayments with 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?
In Broad-Street, working with a mortgage broker on your mortgage application is beneficial in a number of ways. Of these benefits, some of the most evident include:
The most visible benefit of choosing to work with a mortgage broker is that you will likely save money. An experienced expert can take care of the hard work and see to it that your interests are protected. You’ll only need to provide a few details.
Some people are sceptical about this – especially with the concept of a mortgage broker not yet universally understood. There must be a catch somewhere, surely? 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 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. 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. Filing the pockets of a broker is of little value to a mortgage advisor company when compared to making sure customers have a positive experience.
Finds The Most Advantageous Deal
A mortgage broker will always be in favour of your own interests and not those of the lending institution. They shouldn’t just play the role of your agent, but also those of problem solver and knowledgeable consultant. With access to a wide range of mortgage products, a broker can offer you the greatest value in terms of interest rates, repayment amounts, and loan products. Mortgage brokers will interview you to identify 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
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 example, borrowers with bad credit issues can find great products that will suit their needs through brokers who know lenders that offer such products. 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
Money isn’t the only consideration. Your time and sanity are just as important as saving some extra money. 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. Your broker compares loans from major and less popular lenders to find you the best deal with the lowest rates and overall cost.
Reduce the workload for yourself and outsource it to someone who can provide professional advice. A mortgage broker can provide an array of support throughout the application and approval process. This can include assisting with paperwork, responding to questions and helping with government scheme applications, as well as explaining all the available options and loan features you may not have considered or been aware of. 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. Better still, if you’re not well versed with these concepts and how they could affect you, your broker can clarify answer questions you may have over the phone.
Access to exclusive non-advertised deals
Brokers have access to exclusive deals which the banks do not announce. The banks pass these deals on to the brokers, who are responsible for selling the products. Speaking to a broker unlocks these extra perks you would otherwise miss out on by going directly to a bank.
Unlike brokers who have access to the whole market to search for the best deals, banks can offer their own deals alone – and not the deals offered by other banks.
Better chance of pre-approval success
If you’re knocked back after requesting an Agreement in principle/Decision in principle of a loan, this will leave a mark against your credit rating. Brokers have the knowledge and experience required to give you the best shot at being approved at the first attempt.
Access to expert knowledge
The job of a mortgage broker is to help people secure loans. They can access useful information and exclusive deals you likely couldn’t find yourself. If you’re not on the lookout for them, you might not notice the subtleties that accompany loans. The difference to your mortgage could ultimately be made by these subtleties. It’s beneficial to have an experienced professional to point out these things for you.
Rather than putting time aside to research thousands of loans and several lenders – and still possibly miss important subtleties – why not let someone else who has industry experience handle the work? The same way you would contact a plumber to fix a leaking pipe or a hairdresser to work on damaged hair, contacting a mortgage broker is an ideal option for your home loan needs.
About Mortgage Saving Experts
Mortgages and insurance might seem really complicated at first, but they’re not. This is the reason you need to find a widely experienced, knowledgeable and honest adviser. Our mortgage savings experts will make your task as easy and straightforward as possible. Besides, why complicate things more than necessary? Let us make everything easy for you and ensure you get the best possible deal.
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. We’re all about this. 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. Assisting you is the reason we’re here! Essentially “Search 1000s of mortgage deals by taking 15 minutes to speak to 1 adviser.”
Our Team of Brighton Mortgage Experts
We make it our duty to get you the best deal the market has to offer, as we are regulated by the Financial Conduct Authority. We 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, passionate, enthusiastic and very experienced team of mortgage and insurance experts.
Our mortgage insurance experts take pride in listening to the current and future objectives our customers have. We will make these goals happen by working meticulously alongside you.
Why chose Mortgage Saving Experts?
When you take out a mortgage, you’ll be subject to an initial rate for the first few years. At the end of this initial rate, this returns to the lender’s variable rate. Our team will contact you three months prior to the date of renewal to strike a new deal, before both your rate and monthly payment are raised. Other benefits of working with us include:
- The deal you’ll get is better than the bank variable rate, which in turn saves you money.
- You won’t have to remember when the deal is due to end, as we will do this for you.
- While we deal with the stress on your behalf, you can sit back and ease your mind.
- We know our onions, so you’ll only ever be advised by a qualified mortgage expert.
- We compare, advise and arrange the best mortgage for you from thousands of available deals.
- For the entire mortgage process, you will be expertly advised and supported.
Our Approach to Mortgage Advice
We make available personalised services and put into consideration all your unique 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 Broad-Street includes:
- Understand your needs and circumstances via fact-finding.
- Explain what costs buying and selling involve.
- Request applicable documents to aid the application.
- Propose and explain the likely mortgage.
- Reply to any questions you have.
- Collect an agreement in principle.
- Send in your entire mortgage application.
- 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. Working together with us, finding the most suitable mortgage product to suit your needs won’t be difficult at all. The most popular mortgage types we’re requested to handle include:
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.
Different lenders have different ideas and rules regarding this. Being a First Time Buyer is usually not an issue. To qualify for stamp duty relief, First Time Buyers must have never been property owners in any location in the world previously.
Mortgage processes may look tough to negotiate, but they really don’t need to be. Buying your first home can be exciting, so if you come across a suitable broker who can handle the process for you at a fair price, do take advantage of their expertise. Why you should use one is pretty obvious. After all, if you don’t know a thing about cars and yours breaks down, you would rather call a mechanic than fix it yourself. It isn’t any different with mortgages. Mortgage brokers can help you save money, time and effort, so why don’t you use one? You won’t have to pay for the initial consultation.
Buying a home
If you’re considering buying a home in the near future or further down the line, you should get to know mortgages a lot better in the meantime. Study what you should do before the application, during the process of application, and how to utilise the mortgage after buying your property. If you prefer otherwise, then instead speak to an adviser who will guide you through it.
Your credit is important.
A mortgage is a major issue. Since the subprime mortgage crisis in 2008, banks have trodden more carefully in terms of risking money up front. Qualifying for a mortgage is boosted by good credit, but it isn’t compulsory. We can also offer guidance regarding how much you can afford to pay for your new home and how to set your limit, depending on your ongoing situation. 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 your mortgage is a small one, you might find that it isn’t profitable paying an arrangement fee to a lender to secure 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. Even with a lower rate, you could end up having a costlier deal in total, which is why it’s always prudent to talk to someone before you make any decisions. Tread carefully.
One benefit of re-mortgaging is that you’ll not normally pay for any valuation or solicitors fees, although not everyone qualifies for this. This is because it is dependent on your circumstances alone 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
- Based on your specific needs, such as…
- Mortgage debt isn’t so big.
- The financial situation is no longer the same.
- Significant early repayment charge.
- A drop in the value of your home.
- Existing credit problems.
- Present rate is very agreeable.
- We will provide guidance to help you choose whether to re-mortgage.
Buy to Let
A property bought with the purpose of renting to tenants is known as ‘buy to let’. You aren’t allowed to live in the property by law. If you’re purchasing a buy to let as a First Time Buyer, the number of lenders available will be restricted and there will be extra checks carried out by the lender in such cases.
- When purchasing a buy to let property, you’d be required to know quite a few things.
- The loan amount you can borrow is dependent on how much rental income you receive.
- You’ll be required to pay a 3% stamp duty 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.
- To find the best mortgage to match your requirements, a good adviser will know which questions you need to answer.
- Contact our advisers to find out whether 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. 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. Remember to ask brokers how they want to be paid. They must be completely transparent, telling you how much is being charged and what fee structure they use.
Our fee structure is based upon charging the client £695; any commission which is received from the mortgage lender is deducted from that figure If we receive a commission below the value of £695, we ask the client to pay the difference between the received commission and £695. For instance, if the commission we receive is £495, then we would require you to pay £200 to make up the difference. This can be paid when your mortgage offer has been produced, meaning we only get 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. 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. Other than this, they will also carry out a credit check to ensure you have an agreeable credit rating for mortgage purposes.
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. 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 compare recent mortgage deals in large quantities to help you find just what you want.
What Our clients say About us
Our list of happy clients in Broad-Street is long and diverse. If you’re not yet persuaded that we are the experts who can get you the best mortgage deal in Broad-Street at the cheapest cost, see what some of our customers have got to say about working 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 at your disposal when seeking the best mortgage deal, the better the position you’ll be in. To provide insight and help you get started, find recent news on mortgages below.
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.
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 FCA monitors the professional conduct of mortgage providers. There are stern rules that serve as a guide with regards using unfair, deceitful promotions and adverts, as well as checks for financial service contracts for consumers. Regulations were 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”.