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. With a mortgage broker in Highbury, you’ll have an easier time procuring the mortgage loan you need at the best possible terms. If you work with a reputable mortgage broker and have a poor credit score or any other issues that could affect your mortgage application, your chances would be greatly improved.
Because professional mortgage brokers are regulated to assure compliance with banking and financial laws in the jurisdiction of the consumer, you can be assured you’re in good hands.
What Is A Mortgage?
In simple terms, 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 there are different types of mortgages, the most common is one whereby you are bound to a monthly capital repayment plan.
In addition to repaying the original loan (the ‘capital’), you’ll also have to pay interest on top. A mortgage is a debt instrument, secured by the collateral of a specified property that the borrower is obliged to pay back via a predetermined set of payments. Mortgages are a vehicle for individuals and businesses to make large property purchases, without paying the entire value of the purchase up front. The borrower will repay the loan and interest over an extended period of time, until they completely own the property, without any mortgage. If the borrower stops paying the mortgage, the lender can repossess the property against which the mortgage is secured.
The property can be repossessed by the lender if the home buyer fails to make mortgage payments, since the bank has a charge on the house. 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 many forms. 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). Monthly payments do not change during the fixed rate term. If market interest rates rise, the borrower’s payment does not change on a fixed rate. If market interest rates drop or increase, the borrower’s mortgage repayment remains the same 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. This rate can go up or down whenever the lender sees fit, so if you have a diligent broker or good diary system in place, remember to re-mortgage or call your existing lender and change the rate by looking around three months before that rate increases to the variable rate. This will save you paying much higher monthly payments.
Quite often, the initial interest rate is a low rate, which can make a mortgage appear cheaper than it is. If interest rates increase at a later date, the borrower may not be able to afford the higher monthly payments. 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. Our mortgage brokers in Highbury 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. Find out just how much your mortgage repayments are going to be, dependent on your interest rate and full loan amount, using this handy calculator. 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?
Working on your mortgage application with a mortgage broker in Highbury comes with many different benefits. Some of the more obvious benefits 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 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? While this train of thought is understandable, be assured that most mortgage brokers don’t have an incentive to work against your best interests.
If the broker cannot provide genuine reasons for recommending the mortgage they have (to you, their regulators, the Financial Conduct Authority or the Prudential Regulation Authority), then they could be in serious trouble. Exclusive mortgage deals not found on the high street can be unearthed by many mortgage brokers, which could potentially cut the cost of the entire loan 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
Your interests – and not those of the lending institution – will be represented by the mortgage broker. Not only should the role of being your agent be their focus, they also need to 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. 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
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, brokers would know the lenders that can make available the best products for clients with credit issues. 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
Money isn’t the only consideration. Saving some extra cash is great, but so is your time and sanity. Take into consideration the time you would need to research different kinds of loans from multiple lenders. With a mortgage broker, you’ll only need one application, rather than completing forms for each individual lender. 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.
Take some of the work off your shoulders and outsource it to someone who can offer 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. A few of the features may include options to make extra repayments, as well as drawdown facilities and offset accounts. Features like these can make a huge difference to your mortgage costs and overall experience. In fact, if you don’t know so much about these concepts and the effects they could have, you can find clarification and get answers to any questions you may have during a phone call.
Access to exclusive non-advertised deals
Exclusive deals not advertised by banks can accessed by mortgage brokers. These deals are passed by the banks to the brokers, who then have the responsibility of selling the products. 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
A mark is left on your credit rating if your request for an Agreement in principle/Decision in principle of a loan is turned down. Brokers have the knowledge and experience required to give you the best shot at being approved at the first attempt.
Access to expert knowledge
The job of a mortgage broker is to help people secure loans. They have access to information and select deals you wouldn’t discover by yourself. If you aren’t looking for them, you’re likely to miss the subtle details that come with loans. At the end of the day, these subtleties tend to improve your mortgage chances. It’s beneficial to have an experienced professional to point out these things for you.
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 like you’d acquire the services of a hairdresser to replenish damaged hair or a plumber for leaking pipes, a mortgage broker is an excellent option for any of your home loan needs.
About Mortgage Saving Experts
Contrary to how they might seem initially, mortgages and insurance are not so difficult. This is why it’s very important to find honest advisers, who are knowledgeable and experienced. 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? Let us simplify everything for you and ensure we get the best deal possible.
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 all about. No matter the circumstances – whether this is your first time buying, you’re a landlord, moving onto a new chapter or even re-mortgaging, Mortgage Saving Experts are here to help. We are here to provide assistance! Approximately “Get information about 1000s of mortgage deals by taking 15 minutes to speak to 1 adviser.”
Our Team of Brighton Mortgage Experts
Due to regulations by the Financial Conduct Authority (FCA), we must do all we can to get you the most suitable 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 an honest, enthusiastic and passionate team of mortgage insurance experts, with years of industry experience.
Our mortgage and insurance experts are particularly good at listening to your current and future goals. We then work closely with you to achieve those goals.
Why chose Mortgage Saving Experts?
After taking out a mortgage, you’ll get an initial rate for the first couple of years. After the initial rate period, the rate is then raised 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. Other benefits of working with us include:
- You’ll get a better deal than the bank variable rate and subsequently save money.
- We can provide updates relating to the end of your deal, so you need not worry.
- You can take time to relax, while we handle the stress for you.
- We are good at what we do, so you’ll always be advised by professional mortgage experts.
- To arrange the best deal for you, we compare and dispense advice with regards thousands of mortgage deals.
- You’ll receive expert advice and support throughout the entire mortgage process.
Our Approach to Mortgage Advice
Your individual needs will be duly considered, as we provide fully personalised services. 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 reasons our services are better than those of other mortgage services in Highbury include:
- Understand your needs and circumstances via fact-finding.
- Explain the costs involved with buying and selling.
- Ask for related documents to help with the application.
- Recommend and explain all about the prospective mortgage.
- Reply to any questions you have.
- Collect an agreement in principle.
- Get your whole mortgage application submitted.
- Work with your estate agent, solicitor and mortgage lender to answer any questions comprehensively.
Mortgage Types We Provide Expert Advice On
We dispense expert advice on a wide range of mortgage products. Working together with us, finding the most suitable mortgage product to suit your needs won’t be difficult at all. 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.
The ideas and rules differ from lender to lender. Normally, being a First Time Buyer is no issue. 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.
Mortgage processes may look tough to negotiate, but they really don’t need to be. The purchase of your first home can be filled with excitement, so if you discover a well-respected broker to manage the process for a reasonable price, then use one. It is abundantly clear why you should use one. After all, if your car broke down and you knew nothing about cars, you wouldn’t try to fix it yourself. Instead, you would take it to a mechanic. It’s the same with mortgages. Mortgage brokers can help you save money, time and effort, so why don’t you use one? The initial consultation is free of charge.
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. Study what you should do before the application, during the process of application, and how to utilise the mortgage after buying your property. If you would rather not take this approach, then instead contact an adviser, who will be able to walk you through the process.
Your credit is important.
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. 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 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. Let me make it clearer. If your mortgage is a small one, you might find that it isn’t profitable paying an arrangement fee to a lender to secure a lower rate. It may seem cheaper to be on a slightly higher rate than pay an arrangement fee to another 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. Pay close attention.
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 brilliant way to ensure you cut down on your mortgage bills is to re-mortgage on time. Depending on your specific needs, a re-mortgage deal might not be the best option, even though it does have its advantages.
Reasons for remortgaging your property
- Depending on your individual circumstances, such as…
- Mortgage debt isn’t so big.
- Financial circumstances have changed.
- Costly early repayment charge.
- Home value dropped.
- You’re dealing with credit problems.
- Current rate is ideal.
- We will advise you whether or not to pursue a 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 some things you might want to know when purchasing a buy to let property.
- The rental income you receive is a primary factor when determining the size of the loan you can borrow.
- A payment in respect of an extra 3% stamp duty will be required after your normal stamp duty.
- Even if the value of the property isn’t enough to be liable for stamp duty, you are still required to pay an extra 3% of the purchase price.
- TIP: Ask your solicitor/conveyancer to work out how much you’ll have to pay if you’re buying a second property.
- A good adviser will know the exact questions to pose and will find a mortgage that fits your exact requirements.
- Contact our advisers to find out whether you’re eligible.
How Much Do Mortgage Brokers Charge?
Many mortgage brokers are paid commission from lenders, which represents a percentage of your mortgage loan. 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. Most independent brokers charge a flat fee, which is typically around £500. Remember to ask brokers how they want to be paid. They must be completely transparent, telling you how much is being charged and what fee structure they use.
We charge the client £695 as part of our fee structure; if the mortgage lender pays any commission, it is then deducted from that figure. If we are paid a commission less than £695, the client is then asked to pay the necessary difference to top it up to £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 is based on a number of factors, such as the amount you deposit, your income, the number of children you have, and any current debts you might have. 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. Other than this, they will also carry out a credit check to ensure you have an agreeable credit rating 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 for an appointment with one of our certified mortgage experts today. Initially, we can at least give you an idea, without needing to conduct any credit checks.
The Latest Best Mortgage Rates
Whether you’re looking to re-mortgage, move home, find a first-time buyer mortgage or a buy-to-let, we can help. We compare thousands of the latest mortgage deals to help you find exactly what you need.
What Our clients say About us
Our list of happy clients in Highbury is long and diverse. If you doubt that we are the professionals most capable of finding you the best mortgage deal in Highbury at the lowest price, check out what some of our customers have to say about their experience with us. For a first-hand experience of just how amazing our services are, give us a call today.
Latest Mortgage News
The more information available to you when trying to secure the best mortgage deal, the more advantages you’ll enjoy. To provide insight and help you get started, find recent news on mortgages below.
Mortgage Regulatory Information
Banks, building societies and specialised mortgage lenders account for the bulk of mortgage providers in the UK. There is a total of 200 different financial institutions which offer mortgages in Britain, although Lloyds Banking Group and Nationwide Building Society owns the market’s largest share.
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).
Mortgage providers are tightly regulated by the FCA, in terms of their professional conduct. There are strict rules regarding the use of unfair, misleading adverts and promotions, as well as checks to make sure the terms of any contract for financial services are fair for the consumer. Regulations were formerly presented in the rules for Mortgage Conduct of Business (MCOB), although they were changed due to the FCA Mortgage Conduct of Business (MMR) of 2014.
Deposit-taking organisations in the UK are under the jurisdiction of the Prudential Regulation Authority (a sister organisation to the FCA) for their financial conduct. They make sure firms have capital large enough to cancel out their lending risks.
If there is something bothering you about your mortgage provider, talking to them about it is the first step to take. If you think it hasn’t been sorted out satisfactorily, you can take the complaint to the Financial Ombudsman Service if necessary. 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”.