What is a mortgage broker
A mortgage broker represents individuals or companies looking to broker mortgage loans. Mortgage brokers exist to find a bank or direct lender that will be willing to make the specific loan an individual requires. Finding a good deal for a mortgage loan in Fitzrovia will be easier if you work with a mortgage broker. Even with complicated circumstances or a poor credit score, the ideal mortgage broker will boost your chances of getting a mortgage.
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?
Simply put, 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. If you fail to make payments when due, your mortgage provider would have the right to repossess (take back) the property.
Mortgages are nearly always set for a 25-year period, but long and short terms are also available. 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 that is acquired using the collateral of a particular property that the loanee must repay in predetermined amounts. 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 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.
Mortgages come in many forms. While there are longer fixed rate terms provided, the borrower will pay the same interest for the initial term; that is, two, three or five years, with a fixed rate mortgage. Monthly payments do not change during the fixed rate term. The borrower’s payments will not be affected by any increase in the market interest rates if they are 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. The rate can increase or decrease as the lender decides, so with a good broker or diary system in place, do not forget to re-mortgage or call your existing lender, so you can adjust the rate sometime around three months before it’s increased to the variable rate. This will help you avoid paying higher monthly payments.
A mortgage can seem less costly than it really is, with the initial interest rate often being a low rate. An increase in interest rates later on could mean that the borrower would not be able to continue with payments. Because the variable rates can change at any time, the monthly payments are unpredictable after the initial term.
Other types of mortgages exist that are not so common. However, they may be available to you, so talk to an independent broker about such options, which include offset mortgages, interest-only mortgages, buy to lets, secured loans, tracker rates and bridging loans. Our mortgage brokers in Fitzrovia can provide help for getting the best mortgage deal to suit your personal specifications and requirements.
Handy Tools and Calculators
Being aware of what you can borrow and the amount the loan will cost will make it simpler 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. Simply fill in the values plus your term and press ‘Click to calculate’ to immediately discover the amount you must repay monthly.
Why Use A Mortgage Broker?
Working with a mortgage broker for your mortgage application in Fitzrovia can be beneficial in various ways. Some of the most prominent benefits are:
The possibility of saving money is the most obvious advantage of working with a mortgage broker. 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 are sceptical about this – especially with the concept of a mortgage broker not yet universally understood. There must be a catch somewhere, surely? While this train of thought is understandable, be assured that most mortgage brokers don’t have an incentive to work against your best interests.
In short, a broker is required to give proof of their reasons for recommending the mortgage they have (to you, their regulators, the Prudent Regulation Authority or Financial Conduct Authority) or they could be penalised. To potentially reduce the cost of the entire loan, there are some mortgage brokers who can secure exclusive mortgages deals not available on the high street. A reputable mortgage broker will disclose details of how they take payment for their services and convey the components which make up the entire mortgage cost. A mortgage advisor company values ensuring a positive experience for their customers over padding the pocket of a broker.
Finds The Most Advantageous Deal
For a mortgage broker, your interests – rather than those of the lending institution – are paramount. 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. To ascertain your goals and needs (both short and long term), you’ll be interviewed by the mortgage broker. 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
The client will be under the direction of a mortgage broker, who will manage the process and handle any issues that could arise along the way. For instance, brokers would know the lenders that can make available the best products for clients with credit issues. If a borrower requires a loan too large for the bank to approve, a broker can be of benefit by providing the knowledge and ability to successfully source financing.
Save Time & Hassle
Money isn’t the only consideration. While it’s a good thing to save some extra money, your sanity and time matter just as much. Consider how much time it would take you to research multiple loan types from multiple lenders. You’d only need to complete one application with a mortgage broker, instead of filling out forms for every individual lender. The loans recommended can be formally compared for you buy your mortgage broker. This will serve as a guide to the information which correctly shows cost differences, with present rates, points and closing costs for each loan illustrated. 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.
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. Some of these features can include drawdown facilities, offset accounts and options for extra repayments to name but a few. A noticeable difference can be made to your overall experience and the cost of your mortgage. 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
There are exclusive deals that aren’t advertised by banks to which brokers have access. The brokers are charged with selling the products, as the deals are pushed on to them by the banks. Talking to a broker can release these extra perks, which you’d otherwise not enjoy by contacting the bank yourself.
A bank can only sell their own deals – not those of the other banks as well – whereas a broker can search the whole market for the best deal.
Better chance of pre-approval success
If 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
Mortgage brokers assist people with obtaining loans as part of their job. Helpful information and exclusive deals you won’t find yourself are accessible to them. There are small details accompanying loans that you might miss if you’re not looking for them. In the long run, subtleties like these are significant to your mortgage. Having the services of an experienced professional who can point these out for you is a huge benefit.
You can avoid spending valuable time to research numerous loans and lenders (while perhaps missing fundamental key subtleties) and instead give the work to someone with key industry experience. Just as you would contact a plumber for a leaking pipe or a hairdresser to replenish damaged hair, a mortgage broker is an excellent choice for all your home loan needs.
About Mortgage Saving Experts
Mortgages and insurance are not as complex as they seem at first. Finding an adviser who is reliable, knowledgeable and has significant experience is very important for this reason. Our Mortgage Saving Experts will make your journey as seamless and transparent as possible. Why complicate things more than necessary, after all? 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. 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! 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 are required to justify our reasons for making the mortgage recommendations we do to both you and our regulators, so you can understand why you have the mortgage you have.
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 will pay attention to you and understand all your current and future objectives. We will then work together with you to reach these goals.
Why chose Mortgage Saving Experts?
When you take out a mortgage, you’ll be subject to an initial rate for the first few years. After this initial rate finishes, the rate increases 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. Included below are the plus points of working with us:
- You’ll save some money, as the deal you get is better than the bank variable rate.
- You won’t have to remember when the deal is due to end, as we will do this for you.
- You can take time to relax, while we handle the stress for you.
- We know our business, so you’ll only be advised by qualified mortgage experts.
- Comparing, advising and setting up the best possible mortgage deal from amongst the many available is what we do.
- 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. Three simple steps are taken in our approach to mortgage advice:
- Let’s have an Initial Chat, so we can get to know You and What Your Requirements Are
- We Search the Entire Market to Find the Best Deal for You
- We’ll Present you with the Cheapest and best Deals Available for Both Mortgages and Insurance Cover
How Mortgage Saving Expert Brokers Can Help you:
Our services are more remarkable than those of other mortgage brokers in Fitzrovia because:
- Find out what your needs and circumstances are through fact-finding.
- Spell out the costs buying and selling involves.
- Request all documents related to the application.
- Provide explanations and recommendations for the prospective mortgage.
- Proffer replies to any questions you might have.
- Collect an agreement in principle.
- Submit your full mortgage application.
- We will collaborate with your estate agent, solicitor and mortgage lender and reply to any questions through to completion.
Mortgage Types We Provide Expert Advice On
We advise 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. Some of the most commonly requested mortgage types we help with include:
First time buyers
Most mortgage lenders put people in the First Time Buyers category if they 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.
Every lender has different rules and ideas about 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.
The mortgaging process might appear to be challenging, but this isn’t necessarily so. The prospect of buying your first home comes with a lot of excitement, so if you manage to find a competent broker who can oversee the process at a reasonable price, then go right ahead. Why you should use one is pretty obvious. 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. 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
You should get to know more about mortgages if you’re thinking of buying a home in the near future or a few years to come. Learn what to do when applying, within the application process and even how to use a mortgage after buying your home. If you prefer otherwise, then instead speak to an adviser who will guide you through it.
Your credit is crucial.
A mortgage is of major importance. Banks risk a large amount of money and have been steadily more careful since the subprime mortgage crisis in 2008. To qualify for a mortgage, good credit is helpful, but not essential. We can also provide guidance about the amount you can afford to pay for your new home and what should be your maximum offer, based on your current circumstances. 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
In short, this means you’ll switch from one lender to another to get a more affordable rate or cheaper deal. They don’t necessarily have to be paired together. Let me simplify this for you. 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 find it’s more practical to go on a slightly higher rate, without paying arrangement fees to any lender. It’s best to always talk to someone before agreeing any deal, because you don’t want one that’s more expensive overall, even though the rate might be significantly lower. Focus on any small print.
The potential absence of valuation or solicitors fees is one of the plus points of re-mortgaging, even though not everyone qualifies for this. This is because only your circumstances are considered at the time of re-mortgaging. So, please check with 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 specific needs, such as…
- Mortgage debt isn’t so big.
- Financial circumstances have changed.
- Early repayment charge is on the high side.
- A drop in the value of your home.
- You have credit problems.
- Already on a suitable current rate.
- We will guide you when deciding to re-mortgage or not.
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 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.
- 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.
- A payment in respect of an extra 3% stamp duty will be required after your normal stamp duty.
- If the value of the property isn’t valued at the amount for which stamp duty becomes liable, you are still required to pay the extra 3% of purchase cost.
- TIP: Ask your solicitor/conveyancer to work out how much you’ll have to pay if you’re buying a second property.
- 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 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. 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. Many independent brokers usually charge about £500 as a flat fee. Don’t forget to find out how brokers collect payment. The should be totally transparent, disclosing the amount to be charged, as well as their available fee structure.
The fee structure we adopt is based upon charging the client £695 and deducting from that figure any commission paid by the mortgage lender. Our client will be asked to pay the difference between the commission we are paid and £695, if the amount of commission is less than £695. If we receive a mortgage commission of £495 for example, we would ask our clients to pay us the difference of £200 after the mortgage offer is produced, so we are only paid on results.
How Much Can I Borrow?
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. The amount a lender would be willing to lend is dependent on a comprehensive affordability assessment that helps them understand your income, as well as any loan or credit card commitments you might have and everyday household expenses. In addition, they also perform a credit check to make sure your credit rating is suitable for mortgage purposes.
Get a decision in principle before you finish your mortgage application; this way, you can form a clearer idea with regards the amount you can borrow. 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
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
We have a list of clients in Fitzrovia that is both lengthy and diverse. If you’re still not sure that we are the experts to get you the most suitable mortgage deal in Fitzrovia at the most affordable price, check out some of the things our clients have said 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 at your disposal when seeking the best mortgage deal, the better the position you’ll be in. Below can be found recent news on mortgages to provide the insight you need to get started.
Mortgage Regulatory Information
The majority of mortgages in the UK are made available by banks, building societies and specialised mortgage lenders. In Britain, there are around 200 different financial institutions that make mortgages available, even though Lloyds Banking Group and Nationwide Building Society has the biggest portion of the market share.
In the UK, despite there being tight regulations that guide banks and building societies, a regulatory scheme was implemented by the FCA (formerly the Financial Services Authority) in response to the Financial Services Act 2000.
The FCA regulates the professional behaviour of mortgage providers. Strict rules are in place against using false or unfair adverts and promotions, in addition to checks to ensure the terms of contracts for financial services are fair for the consumer. 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.
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 a high enough level of capital to offset 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 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”.