What is a mortgage broker
To broker a mortgage loan, a mortgage broker will act as a link on behalf of an individual or business. The purpose of mortgage brokers is to look for banks or direct lenders that will willingly provide the specific loan an individual would need. You’ll have a stress-free time getting a great deal on the mortgage you need in Clapham-Junction if you work with a mortgage broker. 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.
With regulations in place to make sure professional mortgage brokers follow banking and finance laws in the relevant customer jurisdiction, you won’t have to worry about being in the wrong 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. The property can be rightfully taken from you (repossession) by your mortgage provider if you do not make payments on time.
While shorter or longer terms are available, mortgages are usually set for a 25-year period. A plan for you to make repayments is drawn up once you’ve borrowed the money. 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. The property can be owned by the borrower without a mortgage after the loan plus interest are repaid by them over a period of time. If the borrower defaults in making mortgage payments, the property on which the mortgage is secured can be repossessed by the lender.
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. The bank can evict the tenants, sell the property and use the income to pay off the mortgage debt if there is a repossession.
Mortgages come in various guises. Even though there are longer fixed rate mortgage terms available, the borrower would have to pay the same interest rate for the initial terms of two, three or five years. Monthly payments remain constant during the fixed rate term. The borrower’s payments will not change on a fixed rate, even though the market interest rates increase. 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. 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. Higher monthly payments may be hard to meet for the borrower if interest rates are increased later. Variable rates after the initial term can be changed at any time, causing monthly payments to be rather unpredictable.
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. In Clapham-Junction, our mortgage brokers can assist you in finding the ideal mortgage deal to match your unique circumstances and specifications.
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. 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. 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 Clapham-Junction. Of these benefits, some of the most evident include:
The most obvious benefit of choosing a mortgage broker is the potential to save money. You don’t have to handle the hard work, as this can be managed by an expert with ample experience, who will make sure your best interests are addressed. All you’ll need to do is fill out some details.
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. While this train of thought is understandable, be assured that most mortgage brokers don’t have an incentive to work against your best interests.
The broker could actually be at a disadvantage if they cannot prove to you, their regulators, the Financial Conduct Authority or the Prudent Regulation Authority why they made the recommendations in respect of the mortgage in question. 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. 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
Your interests – and not those of the lending institution – will be represented by the mortgage broker. They should act not only as your agent, but also as a knowledgeable consultant and problem solver. 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. 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
A mortgage broker navigates the client through any situation, handling the process and smoothing any bumps in the road along the way. For instance, a broker will have knowledge of the lenders who offer the best products to meet the needs of a client with a credit issue. If a borrower requires a large loan – considerably more than what the bank will approve – the knowledge and expertise of a broker in securing financing would be a distinct advantage.
Save Time & Hassle
Money isn’t the only consideration. Your time and sanity are just as important as saving some extra money. Give a thought to the amount of time you’d have to invest when enquiring about various loan types from numerous lenders. You would only have to fill out one application form, instead of one for every lender you have to work with. 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. Major lenders and those not so popular will be compared by your broker to seek out the most suitable deal for you, in terms of lower rates and total cost.
By outsourcing, you can reduce the workload and get someone else’s professional advice. A mortgage broker can do a lot of the work by providing you with support throughout the application and approval process. This might involve completing all paperwork, helping you with applications to government schemes, answering questions and explaining the options and loan features, about which you may not have been aware. These features can include drawdown facilities, the option to make extra repayments and offset accounts to name a few. A noticeable difference can be made to your overall experience and the cost of your mortgage. 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
Brokers have access to exclusive deals that aren’t advertised by the banks. The deals are pushed by the banks on to the brokers, who are then charged with overseeing the sale of 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 your request for an Agreement in principle/Decision in principle of a loan is turned down, a mark is left on your credit rating. The experience and knowledge required for your best chance of approval the first time you apply is something brokers have in abundance.
Access to expert knowledge
Helping people secure loans is what mortgage brokers do for a living. They have access to helpful information and exclusive deals you’d otherwise not find. Loans come with certain subtleties you could miss if you’re not looking out for them. The difference to your mortgage could ultimately be made by these subtleties. If you have an experienced professional who can show you these things, you’ll be at a distinct advantage.
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
Contrary to how they might seem initially, mortgages and insurance are not so difficult. This is the reason you need to find a widely experienced, knowledgeable and honest adviser. Our Mortgage Saving Experts will make your journey as seamless and transparent as possible. Why make things harder than necessary, after all? Let us make things easy for you and make sure we find you the most suitable deal.
With the honest and transparent services customers receive at Mortgage Saving Experts, they will come to realise that mortgages and insurance are not as challenging as they seem. At Mortgage Saving Experts, we treat each mortgage and insurance application as if it were our own. 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. Assisting you is the reason we’re here! In essence “Find out about 1000s of mortgage deals by putting 15 minutes aside to talk 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
Our team of mortgage insurance experts is made up of honest, passionate, enthusiastic and widely experienced individuals.
Our mortgage and insurance experts pride themselves on listening to what your current and future objectives are. We then work closely with you to achieve those goals.
Why chose Mortgage Saving Experts?
For the first few years after taking out a mortgage, you’ll be subject to an initial rate. The rate is raised to the lender’s variable rate after the initial rate ends. Three months before you’re due to renew, our team will reach out to secure a new deal before your monthly payments and rate increase. Other advantages of working with us are:
- You can save extra cash, because you’ll get a preferable deal to the bank variable rate.
- You don’t have to keep track of the timeline, as we will look after this for you.
- You can take time to relax, while we handle the stress for you.
- We are good at what we do, so you’ll always be advised by professional mortgage experts.
- We compare, advise and arrange the best mortgage for you from thousands of available deals.
- You’ll be supported and expertly advised throughout the whole mortgage process.
Our Approach to Mortgage Advice
We offer a personalised service that takes into consideration your unique needs. We take three basic steps 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:
The things that make our services the best amongst mortgage brokers in Clapham-Junction include:
- Find out what your needs and circumstances are through fact-finding.
- Spell out the costs buying and selling involves.
- Request applicable documents to aid the application.
- Propose and explain the likely mortgage.
- Get answers to any questions you might have.
- Collect an agreement in principle.
- Submit your full 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 dispense expert advice on a wide range of mortgage products. By working with our team, you’ll have no trouble finding the perfect mortgage product to match your needs. 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.
Different lenders have different ideas and rules regarding this. Typically, there are no problems with being a First Time Buyer. To qualify for stamp duty relief, First Time Buyers must have never been property owners in any location in the world previously.
Mortgages may appear to be a rather difficult process, but they really don’t have 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. The reason you should use one is quite apparent. If you have no knowledge about cars and yours develops a fault, you would call a mechanic rather than attempt to fix it yourself. The same applies to mortgages. You can save on time, effort and even money with mortgage brokers, so you should 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. Get to know what to do before your mortgage application, during the application process itself and the way in which to use it after buying the property. If you can’t deal with all of that, talk to an adviser who will provide guidance accordingly.
Your credit is a necessity.
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. Good credit helps to qualify for a mortgage, but it isn’t a necessity. 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. The two do not necessarily go hand in hand. Let me clarify this. 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. You may realise that it’s less expensive to go on a slightly higher rate than paying any lender an arrangement fee. 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. Be careful.
One benefit of re-mortgaging is that you’ll not normally pay for any valuation or solicitors fees, although not everyone qualifies for this. The reason is that it is based on your disposition alone at the time of re-mortgaging. So, do find out from your adviser.
A brilliant way to ensure you cut down on your mortgage bills is to 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 individual circumstances, like…
- Mortgage debt is relatively small.
- The financial disposition is now different.
- Early repayment charge is on the high side.
- A drop in the value of your home.
- You are having trouble with credit.
- Already on a great rate.
- We will advise you whether or not to pursue a re-mortgage.
Buy to Let
A ‘buy to let’ property is one you want to purchase in order to rent out to tenants. You aren’t allowed to live in the property by law. 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.
- 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.
- You’ll be required to pay a 3% stamp duty 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: Ask your solicitor/conveyancer to work out how much you’ll have to pay if you’re 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 see if you’re eligible.
How Much Do Mortgage Brokers Charge?
Most mortgage brokers get paid commission from lenders, which will be a percentage of the mortgage loan you receive. 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. Many independent brokers charge flat fees, usually around £500. Don’t forget to find out how brokers collect payment. They should be honest and up front, telling you the amount owed and the fee structure they have 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 receive a commission below the value of £695, we ask the client to pay the difference between the received commission and £695. If we receive a mortgage commission of £495, our client would be required to pay £200, which would be paid after the mortgage offer has been forthcoming, meaning we only get paid according to results.
How Much Can I Borrow?
A lot of factors influence this, like the number of children you have, the deposit amount, your income and any debts you might have in the background. What determines the amount a lender will agree to lend is a full affordability assessment. This will help them understand your loan or credit commitments, as well as income and everyday household expenses. In addition, they will perform a credit check to ensure your credit rating is sufficient for the purpose of a mortgage.
To be sure of how much you can borrow, obtain a decision in principle, prior to completing a full application. 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
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 thousands of the latest mortgage deals to help you find exactly what you need.
What Our clients say About us
Our list of satisfied clients in Clapham-Junction is lengthy and diversified. If you’re not yet persuaded that we are the experts who can get you the best mortgage deal in Clapham-Junction at the cheapest cost, see what some of our customers have got to say about working with us. Reach out to us today for a personal experience of how effective our services are.
Latest Mortgage News
The more information you have to hand in your search for the ideal mortgage arrangement, the greater advantage you’ll have. To provide insight and help you get started, find recent news on mortgages below.
Mortgage Regulatory Information
The majority of mortgages in the UK are made available by banks, building societies and specialised mortgage lenders. Although a big portion of the market share is owned by Lloyds Banking Group and Nationwide Building Society, all together there are 200 different financial institutions providing mortgages in Britain.
Even with regulations in the UK that closely guide banks and building societies, a regulatory scheme was set up just for mortgages (as a result of the Financial Services Act 2000) by the FCA (the former Financial Services Authority).
The professional conduct of mortgage providers is regulated 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 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.
Regarding their financial conduct, organisations that take deposits in the UK fall under the FCA’s sister organisation’s jurisdiction, the Prudential Regulation Authority. 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. If you don’t like how the issue has been dealt with, you can take your complaint to the Financial Ombudsman Service. Some mortgages are not regulated by the Financial Conduct Authority such as moist Buy to Let mortgages and if you make a complaint about these you are unable to take these to the Financial Ombudsman Service
What To Ask Your Brighton Mortgage Broker?
This is a logical follow-up question. Again, insist on a specific reply.
And once you’ve received answers to these questions, ask if the broker would be willing to put both claims in writing. That will indicate how seriously those claims should be taken.
If a problem arises during the loan application process, you’ll want your broker to respond quickly – hence this question.
Again, demand a specific answer – “Within three hours”, say, rather than “Quickly”.
The reason for this question is so you can discover whether the broker will closely guide you through what is a complicated and stressful process – or expect you to figure it out for yourself.
Organising finance and purchasing property can be complicated and stressful, so you want to know you’re in safe hands. That’s why, before you settle on a particular broker, you should challenge the broker with this question.
Don’t let the broker get away with vague statements like “Because I’m the best” or “Because I provide great service”. Use follow-up questions to demand detail. “What specific things make you better than other brokers? What, specifically, do you do to deliver great service?”
Another important question to ask. That’s because while most brokers focus on ‘plain vanilla’ clients, others might focus on, say, sophisticated investors or borrowers with credit problems.
Hypothetically; Broker A might have done 450 vanilla loans and 50 bad-credit loans, while Broker B might have done 50 vanilla loans and 250 bad-credit loans. So if you were a borrower with credit problems, you might be better off with Broker B.
Next, probe them about their customer service standards
A great way to utilise the knowledge and experience of a broker is to get them to work out the true cost of your home loan. Based on whether you’re paying Repayment or interest only, how much of a deposit you have, the length of your loan term and the rates payable your broker will be able to obtain a mortgage illustration which will have the true cost on it. This is normally depicted by the Annual Percentage Rate (APR)
By maximising your deposit amount and minimising your loan term, you stand to significantly reduce the overall cost of your loan. However, there is much more to answering what the true cost of your home loan will be. Upfront fees such as valuation fees, conveyancing and legal fees need to be added to the total cost. Ongoing fees such as those you can incur for using a drawdown facility.
While it’s impossible to forecast the entire cost of your mortgage to the penny – and let’s not forget how life circumstances and changes can affect your ability to pay your loan too – a broker can can help clarify the big picture details. Mortgage Saving Experts can recommend any protection or insurances to protect you and your family to cover life unfortunate eventualities and our team of advisers can use this information to help you decide which loan is best for your circumstances.
The big question plaguing home buyers tends to be, ‘how much can I borrow?’ Each lender is massively different in this area so as a maximum depending on many factors. In the majority of cases, you can borrow up to around 5 times your gross annual salary but in some instances, you may borrow up to 5.5 times your gross annual income
Once you speak to us, however, we’ll be able to give you a much more accurate indication of your borrowing capacity. Brokers act as the go-between for you and the lender. Lenders will need to know your living expenses, debts, credit score and whether you have dependents. A broker can factor all these things into the right loan.
A broker can also explain home loan terms you’ll need to know, such as LTV, which is the initialism for Loan-to-Value and refers to the percentage of the total loan amount you seek to borrow as a percentage of the property purchase price or value. They can also explain things like the differences in interest rates and repayment types such as Interest Only and Repayment (Capital & Interest)
This is a good follow-up question to ask, as it will give you a better understanding of the mortgage broker’s experience.
For example, imagine two brokers joined the industry in 2013, but that Broker A had written 500 loans during that time and Broker B had written 300. In that case, even though both parties would be able to claim five years of industry experience, there would be a clear difference in hands-on experience.
This is a good place to start, because a more experienced broker will generally be more knowledgeable than a less experienced broker.
Press the broker to give you a specific answer, such as “Eighteen years” or “I’ve been a broker since 2007 and in the mortgage industry since 2001”, rather than something vague like “I’ve got a lot of experience”.