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. 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 Harold-Park will be easier if you work with a mortgage broker. The right broker will also improve your chances of getting a mortgage, even if you have a poor credit score or are subject to any other circumstances that could complicate your mortgage application.
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?
A mortgage is in effect a loan. Quite unlike personal loans however, a mortgage is used as guarantee against a loan, because it is linked to a piece of property. 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. Once you’ve borrowed the money, a repayment plan is then set in place. Mortgages with monthly capital repayment structures are the most common, even though there are other options available.
You will be required to pay interest on the loan 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. Mortgages allow individuals and businesses to purchase sizable properties, without paying the entire cost at once. The loan and interest attached needs to be paid back over some years before the borrower can own the property without a mortgage. Failure to make mortgage payments can result in the lender taking back the property used as collateral for the mortgage.
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 tenants can be evicted in a repossession case and the property sold by the bank. Subsequently, the equity from which would be used to cover the mortgage debt.
There are many forms of mortgages. Borrowers must still pay the same interest rates on fixed rate mortgages as they would for the initial terms of two, three or five years, even though fixed-rate mortgages are available in longer terms. For fixed rate terms, the monthly payments remain the same throughout. An increase in interest rates in the market won’t change the payments of the borrower if they have 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.
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. 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 short, the initial interest rate is often a low rate, which can make a mortgage seem more affordable than it really is. If interest rates rise later on, the monthly rates may become too high for the borrower to pay. Monthly payments after the initial term are usually unpredictable, since the variable rates could be changed at any time.
There are other types of mortgages, such as interest-only mortgages, offset mortgages, tracker rates, bridging loans, secured loans and buy to lets, which are less common but may be available nevertheless. Therefore, you should contact an independent broker to know your options. You can receive assistance from our mortgage brokers in Harold-Park to find a mortgage deal that best matches your individual specifications and circumstances.
Handy Tools and Calculators
Knowing how much you can borrow – as well as the cost of the loan – will help make planning your future easier. With this handy calculator, get a better understanding of how much your mortgage repayments will be, based on your full loan and interest rate. Just enter those values together with your term and press ‘Click to calculate’ to instantly see how much you’ll need to repay each month.
Why Use A Mortgage Broker?
There are a wide range of benefits to be enjoyed from working with a mortgage broker in Harold-Park with regards your mortgage application. Of these benefits, some of the most evident include:
In working with a mortgage broker, the most noticeable benefit would be the opportunity to save money. You only need to provide a few details, before an experienced professional committed to protecting your interests handles the hard work.
Some people are not fully convinced about this, what with the concept of a mortgage broker still vaguely understood universally. So, there has to be a catch somewhere, surely? Although such reservations are not entirely invalid, you should be aware that there is no benefit for mortgage brokers who do not work in your best interests.
In truth, brokers have to provide viable reasons to you, their regulatory body, the Prudent Regulation Authority or the Financial Conduct Authority for recommending the mortgage they have. To not do so could lead to them facing significant problems. There are various inexpensive, exclusive mortgage deals that a number of mortgage brokers can find for their clients that could possibly reduce the total loan cost. A reputable mortgage broker will disclose how they are paid for their services, as well as detail the total 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 represents your interests, rather than those of a lending institution. In addition to being your agent, they should also be knowledgeable consultants and problem solvers. A broker can offer the best value when it comes to repayment amounts, interest rates and loan products. This is because a large variety of mortgage products are accessible to them. The mortgage broker will talk with you to get a clear picture of your needs, as well as short and long term goals. Many situations demand more than the simple use of a 30-year or 15-year mortgage. Therefore, innovative mortgage strategies and sophisticated solutions are distinct advantages of working with an experienced mortgage broker. These include mortgage to raise capital for repaying debts, money for the children or essential home improvements, or even to enable the purchase of other properties such as buy to lets.
Has Flexibility Expertise to Meet Your Needs
A mortgage broker will guide the client throughout the whole process and sort out any issues that might arise. 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. 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
It is not just about money. Your time and sanity are just as important as saving a bit of extra cash. Give a thought to the amount of time you’d have to invest when enquiring about various loan types from numerous lenders. With a mortgage broker, you’ll only need one application, rather than completing forms for each individual 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. 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.
Take some of the work off your shoulders and outsource it to someone who can offer expert 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. Drawdown facilities, offset accounts and extra repayments (to name a few) are just some of the features involved. Your general mortgage experience and overall expenses can be largely affected by these features. 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. Going to the bank directly could cause you to miss out on added benefits such as these, which you can procure by speaking to a broker.
While banks can only provide their own deals (and not the deals offered by other banks), brokers can scour the entire market to discover the most suitable 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. 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
Mortgage brokers help people secure loans for a living. They have access to helpful information and exclusive deals you’d otherwise not find. If you’re not on the lookout for them, you might not notice the subtleties that accompany loans. At the end of the day, these subtleties tend to improve your mortgage chances. It is a huge plus to have the services of an experienced expert to show these things to 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? For home loan requirements, a mortgage broker is the best ways to go, just as a hairdresser is for replenishing damaged hair and a plumber for fixing leaking pipes.
About Mortgage Saving Experts
Mortgages and insurance aren’t as difficult as they first appear. That’s why finding honest advisers with invaluable experience and knowledge is so important. Your entire journey can be made stress-free and simple by our mortgage savings experts. After all, why make things more difficult than they need to be? Let us simplify everything for you and ensure we get the best deal possible.
Mortgage Saving Experts offer honest and transparent services to our customers, making them feel that mortgages and insurance are not as problematic as they first appear. All the mortgage and insurance applications we take care of at Mortgage Saving Experts are treated as if we own them. These are the things we’re about. 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. Assisting you is the reason we’re here! Approximately “Search 1000s of mortgage deals by taking 15 minutes to speak to 1 adviser.”
Our Team of Brighton Mortgage Experts
We make sure we help you get the best available deal the market can offer, as we are regulated by the Financial Conduct Authority (FCA). 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
We are an honest, enthusiastic and passionate team of mortgage insurance experts, with years of industry experience.
Our mortgage and insurance experts will pay attention to you and understand all your current and future objectives. 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. After the initial rate period, the rate is then raised to the lender’s variable rate. Before your monthly payment and rate are increased, our team will reach contact you to arrange a new deal roughly three months prior to the date of renewal. Here are some of the other advantages you’ll enjoy if you work with us:
- The deal you’ll get is better than the bank variable rate, which in turn saves you money.
- You don’t have to remember when your deal finishes, as we will do this for you.
- You can sit back and relax, while we do all the hard work for you.
- We are good at what we do, so you’ll always be advised by professional mortgage experts.
- To arrange the best deal for you, we compare and dispense advice with regards thousands of mortgage deals.
- You’ll be provided expert advice and support right through the mortgage process.
Our Approach to Mortgage Advice
We provide personalised services and pay attention to all your specific needs. We approach mortgage advice using three basic steps:
- Let’s have an Initial Chat, so we can get to know You and What Your Requirements Are
- We Search the Entire Market to Find the Best Deal for You
- We’ll Present you with the Cheapest and best Deals Available for Both Mortgages and Insurance Cover
How Mortgage Saving Expert Brokers Can Help you:
The things that make our services the best amongst mortgage brokers in Harold-Park include:
- Understand your needs and circumstances via fact-finding.
- Explain what costs buying and selling involve.
- Request relevant documents to assist with the application.
- Make relevant suggestions and provide explanations about the prospective mortgage.
- Provide answers to your questions.
- Obtain an agreement in principle.
- Have your full 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. You won’t have any difficulty finding the right mortgage products to suit your needs when working with us. Mortgage types that we’re frequently asked 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. First Time Buyers must not have owned property anywhere in the world before to be eligible for stamp duty relief for stamp duty purposes.
The mortgaging process might appear to be challenging, but this isn’t necessarily so. It’s rather exciting to be buying your first home, so if you find a reputable broker to get the job done for you at a fair price, then do use one. 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. It isn’t any different with mortgages. With mortgage brokers, you can cut down on money, effort and time, so you should use one. The initial consultation comes at no cost at all.
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 prefer otherwise, then instead speak to an adviser who will guide you through it.
Your credit is of great importance.
A mortgage is of major importance. Since the subprime mortgage crisis in 2008, banks have trodden more carefully in terms of risking money up front. To qualify for a mortgage, good credit is helpful, but not essential. Based on your present situation, we can also be your guide when it comes to how much you can afford to pay for your new home and what your price ceiling should be. We won’t just facilitate the purchase your dream home, we will also help you fund it with the lowest cost and most favourable mortgage deal on offer.
Re-mortgage your home
Effectively, all you’d be doing with this is changing to a different lender to find a better or more affordable deal. The two don’t automatically go hand in hand. I’ll explain this clearly. If you’ve got a small mortgage, paying the arrangement fee to a new lender to go on a lower rate might not seem practical to you. You might find it cheaper by going on a slightly higher rate and paying no arrangement fee to the lender at all. 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. Take extra caution.
One advantage of re-mortgaging is that you won’t have to pay any valuation or solicitors fees. That said, not everyone is eligible for this exemption. 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 smart way to significantly minimise the cost of your mortgage bills is to undertake a re-mortgage on time. Depending on your circumstances, it might not be the ideal move for you – even though a re-mortgage arrangement certainly has its benefits.
Reasons for remortgaging your property
- Depending on your individual circumstances, such as…
- Mortgage debt isn’t considerable.
- Financial circumstances have changed.
- Early repayment charge that’s costly.
- A reduction in home value.
- You have credit problems.
- Present rate is just fine.
- We will dispense advice on the merits of pursuing 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 are not allowed to legally live in the property. The number of available lenders will be restricted if you’re a First Time Buyer, purchasing a buy to let property. Also, extra checks are made by the lender in cases like these.
- When purchasing a buy to let property, you’d be required to know quite a few things.
- The amount of rental income you receive more or less affects how the loan amount you’re able to borrow.
- Other than your regular stamp duty, you will have to pay an extra 3% stamp duty on top.
- If the property is below the value at which stamp duty becomes liable, you will still have to pay the extra 3% of the purchase price.
- TIP: You should ask your solicitor/conveyancer to figure out how much you must pay when considering buying a second property.
- To find the best mortgage to match your requirements, a good adviser will know which questions you need to answer.
- Contact our advisers to find out whether you’re eligible.
How Much Do Mortgage Brokers Charge?
The majority of mortgage brokers receive commission from lenders, which is a percentage of the mortgage loan you secure. Depending on the type of mortgage you need – whether buy to let or residential mortgage for instance – and whether you’ve had any credit problems of late. The figure is often set at around 0.33%, although this varies widely. Many independent brokers charge flat fees, usually around £500. Be sure to enquire about how to make payments to brokers. The should be totally transparent, disclosing the amount to be charged, as well as their available fee structure.
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. 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?
Many factors affect this, such as how much you earn, the amount you deposit, the number of children you have, as well as any debts you might have in the background. 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. For mortgage purposes, they will also perform a credit check to be sure you have an adequate credit rating.
To get an idea of the amount you can loan, get a decision in principle before applying for a mortgage in full. Make plans to meet with one of our experienced mortgage experts now. Without the need for credit checks, we can at least provide an initial estimate.
The Latest Best Mortgage Rates
Whether you want a re-mortgage, move home, find a mortgage for a first-time buyer or purchase a buy to let, we can help. We compare recent mortgage deals in large quantities to help you find just what you want.
What Our clients say About us
Our list of satisfied clients in Harold-Park is lengthy and diversified. If you’re still not sure that we are the experts to get you the most suitable mortgage deal in Harold-Park at the most affordable price, check out some of the things our clients have said about working with us. For a first-hand experience of just how amazing our services are, give us a call today.
Latest Mortgage News
Having more information at your disposal when looking for the most ideal mortgage deal places you in a more advantageous position. 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. All in all, there are 200 different financial institutions offering mortgages in Britain, although Lloyds Banking Group and Nationwide Building Society have the largest share of the market.
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 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. The original regulations represented in the rules for Mortgage Conduct of Business (MCOB) were reconstructed due to the 2014 FCA Mortgage Market Review (MMR).
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.
For lodging complaints about your mortgage provider, the first step 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”.