What is a mortgage broker
A mortgage broker is sometimes considered a middle man who brokers loans in favour of people or businesses. Mortgage brokers strive to find a bank or direct lender that will agree to meet the particular loan an individual requires. With a mortgage broker in Fairlop, you’ll have an easier time procuring the mortgage loan you need at the best possible terms. Even if you have a poor credit score or any other issues that could affect your mortgage application, working with a reputable mortgage broker will still boost your chances considerably.
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. As opposed to personal loans, a mortgage is tied to a piece of property, acting as a 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.
Typically, mortgages are laid out for a set period – usually 25 years, although shorter or longer terms are also possible. Once you’ve borrowed the money, a repayment plan is then set in place. While there are various mortgage options, the most popular one requires a monthly capital repayment plan.
As well as paying back the money you initially borrowed (the ‘capital’), you’ll also be charged interest on that sum. 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 loan and interest attached needs to be paid back over some years before the borrower can own the property without a mortgage. If the borrower stops paying the mortgage, the lender can repossess the property against which the mortgage is secured.
The bank has a charge on the house; should the home buyer default on paying the mortgage, then the lender may repossess the property. If there is a repossession, the tenants can be evicted by the bank and the property sold to repay the mortgage debt.
Mortgages come in various guises. 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). 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. The mortgage repayments the borrower makes won’t differ if the interest rates in the market change if they are on a fixed rate.
At the end of the fixed rate, your mortgage would revert to a ‘standard variable rate’ put in place by the lender, bank or building society from whom you borrow the money. 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 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. With the possibility of the variable rates being changed at any time after the initial term, monthly payments subsequently become unpredictable.
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. To match any needs and requirements you might have, our mortgage brokers in Fairlop can help to find the best possible mortgage deal for you.
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. Take advantage of this handy calculator to determine exactly how much your mortgage repayments will be, based on your total loan figure 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?
Working with a mortgage broker for your mortgage application in Fairlop can be beneficial in various 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. You’ll just need to fill out some details and an experienced professional with your best interests in mind will deal with the hard work.
Some people worry about how true this is, considering the entire idea of mortgage brokers is still misunderstood somewhat around the globe. So, where is the catch? A mortgage broker wouldn’t stand to gain anything by not working in your favour. You’ll need to bear this in mind, even though any concerns you might have are understandable.
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. 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. 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 will work towards protecting your interests, rather than those of the lending institution. Acting as your agent isn’t all they should do, but also problem solvers and knowledgeable consultants too. A broker has access to many different mortgage products and can therefore offer you great value in terms of relation interest rates, loan products and repayment amounts. You will be interviewed by the mortgage brokers to determine your needs and goals – both in the short and long term. Amongst the benefits of working with experienced mortgage brokers are innovative mortgages and sophisticated solutions, because regular 15 or 30-year mortgages aren’t usually sufficient. These include money for children or carrying out much needed renovations, mortgages to raise capital for repaying debts or even money to buy 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 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. 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 recommended loans can be made available by your broker to provide information that would clearly show the differences in cost, including current rates and the costs of closing each of the loans. Comparisons will be made by your broker between popular and less popular lenders to get you the most suitable deal, with lower rates and total cost.
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 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. 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, your broker can answer any questions you might have over the phone or provide clarity if you don’t know much about these concepts and the impact they could have on you.
Access to exclusive non-advertised deals
Exclusive deals not advertised by banks can accessed by mortgage brokers. The deals are pushed by the banks on to the brokers, who are then charged with overseeing the sale of 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.
Brokers can search the whole market for the finest deal, whereas individual banks can only offer their own deals and not those of other banks.
Better chance of pre-approval success
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. You’ll need the necessary knowledge and experience a broker has to secure approval on your first attempt.
Access to expert knowledge
A mortgage broker’s job is to help people obtain loans. 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. In fact, it is these small details that can make a difference to your mortgage in the long run. It’s beneficial to have an experienced professional to point out these things for you.
Instead of removing a chunk of your day to conduct voluminous research of loans and multiple lenders as well as possibly missing important subtleties, why not give the work to a person who has ample industry experience? 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 aren’t as difficult as they first appear. This is the reason you need to find a widely experienced, knowledgeable and honest adviser. Our mortgage savings experts will ease the process for you and make it as simple as possible. Why make things harder than necessary, after all? Allow us to ease the entire process and obtain the best deals available for you.
You’ll be left thinking that mortgages and insurance are not as difficult as they appear, because of the reliable and transparent service Mortgage Saving Experts provide our customers. All mortgage and insurance applications are handled like they’re our own at Mortgage Savings Experts. This is what we do. At Mortgage Saving Experts, our services are available regardless of circumstances, whether you’re a landlord, a first-time buyer, moving onto a new chapter or simply re-mortgaging. We’re here to help! Fundamentally “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, 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. To achieve these objectives, we will then work hand in hand with 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. 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. Some other reasons for which it’s beneficial to work with us include:
- With a deal better than the bank variable rate, you’ll 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 are good at what we do, so you’ll always be advised by professional mortgage experts.
- We undertake comparisons and then advise and arrange the best mortgage for you, choosing from thousands of deals.
- Expert advice and support will be available to you through 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:
What differentiates our services from those of other mortgage brokers in Fairlop includes:
- Use fact-finding to properly understand your individual needs.
- Point out the costs that come with buying and selling.
- Request relevant documents to assist with the application.
- Propose and explain the likely mortgage.
- Get answers 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 dispense expert advice on a wide range of mortgage products. In choosing to work with our team, finding the ideal mortgage product to meet your needs will be relatively easy. The most popular mortgage types we’re requested to handle 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.
For each lender, the rules and ideas about this differ. There usually are no issues in being a First Time Buyer. 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.
While mortgages may look like a tedious process, they don’t have to be. Buying your first home is one of the most exciting things ever, so if you find a reasonably priced, reputable broker to manage the process for you, do hire their services. 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. With mortgages, it is exactly the same. Mortgage brokers can save you time, effort and money, so why not use one? The initial consultation is free of charge.
Buying a home
If you’re thinking of a home purchase any time soon – or even within a couple of years – you should familiarise yourself with everything involved with mortgages. 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 would rather avoid any stress, speak to an adviser, who will guide you accordingly.
Your credit is of great importance.
A mortgage is not to be taken lightly. The banks risk a lot of money and have been increasingly cautious since the subprime mortgage crisis in 2008. To qualify for a mortgage, good credit is helpful, but not essential. 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. 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
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 explain. 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 find it’s more practical to go on a slightly higher rate, without paying arrangement fees to any lender. It’s always best to speak with someone before deciding which deal to go for, as you don’t want to be caught out by being tied to a more expensive deal overall, even if the rate is much lower. Focus on any small print.
One upside to re-mortgaging is that your usually not required to pay for valuation or solicitors fees, although some people don’t qualify for this. The reason is that it is based on your disposition alone at the time of re-mortgaging. So, please ask your adviser about it.
A re-mortgage completed on time is a smart way to significantly reduce the cost of your mortgage related bills. Even though a re-mortgage deal is accompanied by various benefits, it might not the best choice for you, depending 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 reduced.
- You’re dealing with credit problems.
- Present rate is very agreeable.
- We will provide guidance to help you choose whether to re-mortgage.
Buy to Let
A property purchased in order to be rented to tenants is a ‘buy to let’. 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.
- There are a few things you may need to be aware of when purchasing a buy to let property.
- The amount of rental income you receive more or less affects how the loan amount you’re able to borrow.
- You will have to pay 3% stamp in addition to 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.
- A knowledgeable adviser will help find the right mortgage to suit your requirements by asking you the relevant questions.
- Get in touch with our advisers to find out if you qualify.
How Much Do Mortgage Brokers Charge?
Commission is usually paid to mortgage brokers by lenders; this will be a percentage of the mortgage loan you secure. 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. Many independent brokers charge flat fees, usually around £500. Remember to ask brokers how they want to be paid. 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 we receive a commission below the value of £695, we ask the client to pay the difference between the received commission and £695. For example, if we received a commission of £495, we would then ask you for a fee of £200 which is payable on production of your mortgage offer, so we are only paid on results.
How Much Can I Borrow?
This takes into account many factors, such as how much you deposit, the amount you earn, the number of children you have and what debts (if any) you have in the background. 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.
For a more accurate idea of how much you can borrow, get a decision in principle before you apply for a mortgage in full. Arrange to see 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
Our services are available whether you want to re-mortgage, move home, purchase a buy to let or procure a first-time buyer mortgage. We make comparisons between thousands of recent mortgage deals to help you find the one you want.
What Our clients say About us
Our list of satisfied clients in Fairlop is lengthy and diversified. If you aren’t convinced that we are the professionals to make the best possible mortgage deal in Fairlop at the lowest price, take a look at what some of our customers have said about their experience with us. Contact us today to get a first-hand experience of the excellent services we provide.
Latest Mortgage News
The more information you have available when looking for the most suitable mortgage deal, the more beneficial this is for you. Below can be found recent news on mortgages to provide the insight you need to get started.
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.
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 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. The original regulations represented in the rules for Mortgage Conduct of Business (MCOB) were reconstructed due to the 2014 FCA Mortgage Market Review (MMR).
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.
The first step in tackling any issue you have with regards your mortgage provider is to take it up with 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”.