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. Finding a good deal for a mortgage loan in Crooked-Billet will be easier if you work with a mortgage broker. If you have a poor credit score or any other problems that could have an impact on your mortgage application, the right mortgage broker can increase your chances immeasurably.
Professional mortgage brokers are bound under strict regulations and required to comply with banking and finance laws in the customer’s jurisdiction, so, you don’t have to worry about being in the wrong hands.
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. 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. A plan for you to make repayments is drawn up once you’ve borrowed the money. Although mortgages which involve monthly capital repayment plans are more common, there are also other types of mortgage available.
You won’t only have to repay the capital (the money you borrowed), but also the interest on it. A mortgage – secured by the collateral of the property involved – is a debt instrument that the borrower must repay against the agreed pre-set payment instalments. 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. The property the mortgage is secured on can be taken back by the lender if the borrower discontinues mortgage payments.
The bank has a charge on the house; should the home buyer default on paying the mortgage, then the lender may repossess the property. 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.
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. For fixed rate terms, the monthly payments remain the same throughout. 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.
After the fixed rate ends, your mortgage normally reverts to a ‘standard variable rate’, which is a rate set by the lender, bank or building society that’s lending you the money. If you have a diary system in place or a switched-on broker, you must remember to re-mortgage or contact your existing lender and change the rate three months before it increases to the variable rate. This is because the rates can increase or decrease as the lender sees fit, which will help you avoid higher monthly payments.
In fact, the initial interest rate is usually a low rate, which can make a mortgage appear less expensive than it is. If interest rates rise later on, the monthly rates may become too high for the borrower to pay. 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 Crooked-Billet can provide help for getting the best mortgage deal to suit your personal specifications and requirements.
Handy Tools and Calculators
With an estimate in mind – in terms of how much you can borrow and cost of the loan – you’ll be able to plan your future more easily. 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?
Working on your mortgage application with a mortgage broker in Crooked-Billet comes with many different benefits. Of these advantages, some of the more prominent include:
In working with a mortgage broker, the most noticeable benefit would be the opportunity to save money. 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. 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 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. Many mortgage brokers can obtain exclusive mortgage deals not found on the high street, potentially making the total loan cost lower for the client. Reputable mortgage brokers 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
Your interests – and not those of the lending institution – will be represented by the mortgage broker. In addition to being your agent, they should also be knowledgeable consultants and problem solvers. 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. Sophisticated solutions and innovative mortgages are distinct advantages of working with experienced broker, because simple 15 or 30-year mortgages aren’t enough in some situations. These include mortgages to raise capital for debt repayment, money for your children, important home renovations or even the purchase of other properties like 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 example, borrowers with bad credit issues can find great products that will suit their needs through brokers who know lenders that offer such products. The knowledge and capability of a broker to successfully source financing will be of great benefit to a borrower who realises the loan they need may be too large for a bank to approve.
Save Time & Hassle
It isn’t only about money. Saving some extra cash is great, but so is your time and sanity. Think of the amount of time you’d spend researching multiple loan types from multiple lenders. You’d be required to fill out just one application with a mortgage broker, unlike completing one for every different lender. Your mortgage broker can make available a formal comparison of the loans recommended to advise on the information which completely illustrates cost differences, along with present rates, points and closing costs for every loan shown. To find the best deal in terms of lower rates and overall cost, your broker will make comparisons between popular and less popular lenders.
You don’t have to burden yourself with all the work, as outsourcing is a viable option to take in order to gain expert advice. Mortgage brokers do the bulk of the work by helping you during the application and approval process in ways such as taking care of all paperwork; answering questions; handling applications for government schemes; and providing information about the various options and loan features you aren’t aware of. These features could include things such as drawdown facilities and options for making extra repayments and offset accounts. These types of features can make a significant difference to your mortgage cost and experience. 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 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. Talking to a broker can release these extra perks, which you’d otherwise not enjoy by contacting the bank yourself.
A bank can provide access to their own deals (not those offered by other banks), but brokers can gain access to the entire market to find the best deals.
Better chance of pre-approval success
When you request an Agreement in principle/Decision in principle of a loan and are refused approval, this shows up on your credit rating. Brokers are knowledgeable and have the much-needed experience to give you a better shot at approval the first time you apply.
Access to expert knowledge
Helping people secure loans is what mortgage brokers do for a living. They can access useful information and exclusive deals you likely couldn’t find yourself. If you aren’t looking for them, you’re likely to miss the subtle details that come with loans. It’s these subtleties that can make a difference to your mortgage in the long haul. 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? A mortgage broker is a great choice for your home loan requirements, just as a plumber is for fixing a leaking pipe and a hairdresser for dealing with damaged hair.
About Mortgage Saving Experts
Mortgages and insurance might seem really complicated at first, but they’re not. That’s why finding honest advisers with invaluable experience and knowledge is so important. Our mortgage savings experts will ease the process for you and make it as simple 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 provide an honest and transparent service that will leave our customers thinking that mortgages and insurance aren’t as daunting as they may seem. Here at Mortgage Saving Experts, we treat all mortgage and insurance applications as our own. This is what we do. 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. Providing help is why we’re here! 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 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.
Our mortgage insurance experts take pride in listening to the current and future objectives our customers have. We will then work together with you to reach these goals.
Why chose Mortgage Saving Experts?
For the first few years after taking out a mortgage, you’ll be subject to an initial rate. After this initial rate finishes, the rate increases to the lender’s variable rate. Three months before this rate is up for renewal, our team will contact you again to put a new deal in place before your rate and monthly payments increase. Included below are the plus points of working with us:
- You’ll get a better deal than the bank variable rate and subsequently save 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.
- We know our stuff; you’ll always receive pertinent advice from a qualified mortgage expert.
- Comparing, advising and setting up the best possible mortgage deal from amongst the many available is what we do.
- 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. 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 Crooked-Billet include:
- Get to determine your situation and requirements by fact-finding.
- Explain what costs buying and selling involve.
- Ask for related documents to help with the application.
- Propose and explain the likely mortgage.
- Proffer replies to any questions you might have.
- An agreement in principle should be obtained.
- 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. By working with our team, you’ll have no trouble finding the perfect mortgage product to match your needs. 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.
The ideas and rules differ from lender to lender. There usually are no issues in being a First Time Buyer. 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. 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. Besides, if your car breaks down and you have no knowledge of cars, you wouldn’t attempt to fix it yourself; you would use the services of a mechanic. With mortgages, the same principle applies. You can save on time, effort and even money with mortgage brokers, so you should use one. There are no charges 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 can’t deal with all of that, talk to an adviser who will provide guidance accordingly.
Your credit is of great importance.
A mortgage is not to be taken lightly. Since the subprime mortgage crisis in 2008, banks have trodden more carefully in terms of risking money up front. For mortgage eligibility, good credit helps, but isn’t vital. 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. Helping you buy your dream home is not all we do; we will also help you finance it with the lowest cost and most beneficial mortgage deal available.
Re-mortgage your home
In essence, the only thing you’re doing here is swapping one lender for another to get a cheaper deal or better rate. They don’t necessarily have to be paired together. Let me explain. It may seem unwise to pay an arrangement fee to another lender to get on a lower rate if you have a small mortgage. You may realise that it’s less expensive to go on a slightly higher rate than paying any lender an arrangement fee. 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. Pay close attention.
The potential absence of valuation or solicitors fees is one of the plus points of re-mortgaging, even though not everyone qualifies for this. Any reasoning depends solely on your circumstances at the time of re-mortgaging. So, please ask your adviser about it.
Performing a re-mortgage in time is a practical way to reduce your mortgage costs significantly. While a re-mortgage deal can be beneficial for some, it’s not the best move for everyone, as it all depends on your unique circumstances.
Reasons for remortgaging your property
- Depending on your individual circumstances, such as…
- Mortgage debt isn’t considerable.
- There has been a change in financial circumstances.
- Early repayment charge that’s costly.
- Home value dropped.
- Existing credit problems.
- Present rate is just fine.
- We will dispense advice on the merits of pursuing a re-mortgage.
Buy to Let
A property purchased in order to be rented to tenants is a ‘buy to let’. Legally, you cannot 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.
- When purchasing a buy to let property, there are a few things you’ll need to know.
- 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.
- An extra 3% of the purchase price will still be required of you, even if the value of the property isn’t high enough for the stamp duty to be liable.
- TIP: If you want to buy a second property, find out the amount you’ll be require pay from your conveyancer/solicitor.
- To help determine the most suitable mortgage to meet your needs, an expert mortgage adviser will know the specific questions to which you will need to provide answers.
- Get in touch with our advisers to see if you’re eligible.
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 usually around 0.33%, although this does vary massively, depending on what mortgage you require. For example, this would take into account buy to let or residential mortgages and whether you’ve had any credit problems in the recent past. Most independent brokers charge a flat fee, which is typically around £500. Be sure to find out from brokers how you pay them. They need to be totally clear, informing you of the fee structure they use and just how much you are due to be charged.
For our fee structure, we charge clients £695; any commission we receive from mortgage lenders is subtracted from that figure If the commission we receive is less than £695, we then ask the client to make up the difference between what we have been paid in commission up to £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?
This depends on several factors, such as the deposit value and how much you earn, how many children you have, as well as what debts (if any) you have in the background. 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 also perform a credit check to make sure your credit rating is suitable for mortgage purposes.
Prior to applying for a mortgage in full, obtain a decision in principle to form a clear picture with regards the amount you can borrow. Arrange to see one of our qualified mortgage experts today. We can at least give you an idea, without having to do any credit checks at the initial stage.
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 Crooked-Billet is a lengthy and diverse one. If you aren’t convinced that we are the professionals to make the best possible mortgage deal in Crooked-Billet at the lowest price, take a look at what some of our customers have said about their experience 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 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
In the UK, most mortgages are provided by building societies, specialised mortgage lenders and banks. 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 though UK banks and building societies have always been regulated closely, the FCA (formerly the Financial Services Authority) put a regulatory scheme in place for mortgages, because of the Financial Services Act 2000.
The professional services of mortgage providers are monitored by the FCA. Tough rules are in place concerning checks that ensure customers are fairly treated in terms of contracts for financial services, as well as misleading and unfair adverts and promotions. As a result of the FCA Mortgage Market review of 2014, the initial regulations set out in the rules for Mortgage Conduct of Business were revamped.
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 a substantial level of capital to offset their lending risks.
The first step in tackling any issue you have with regards your mortgage provider is to take it up with them. If you feel it hasn’t been dealt with to your complete satisfaction, there is a complaints procedure which can be referred 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”.