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 exist to find a bank or direct lender that will be willing to make the specific loan an individual requires. You’ll have a stress-free time getting a great deal on the mortgage you need in Highgate-Wood 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.
There are regulations in place to guide professional mortgage brokers and make sure they adhere to banking and finance laws in the jurisdiction of customers, so you can be sure you’re in good hands.
What Is A Mortgage?
Quite simply, a mortgage is a loan. Unlike personal loans, a mortgage is specifically tied to a piece of property, so that it acts as security against the loan. Mortgage providers can rightfully take back (repossess) the property if you default on your payments.
In essence, mortgages have a set duration – mostly 25 years – although there are shorter or longer terms available. As soon as you borrow the money, a plan for repayment is implemented. While there are various mortgage options, the most popular one requires a monthly capital repayment plan.
Aside from repaying the money you borrowed initially, you will be charged interest on the amount you’ve been loaned (the ‘capital’). 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. Where mortgages are concerned, individuals and businesses don’t have to make one-time payments up front for large property purchases. Over time, the loan and interest included can be repaid by the borrower, before the property can become theirs without any mortgage. The lender can repossess the property against which the mortgage is secured if the borrower does not keep up with mortgage payments.
Should there be a default on mortgage payments, the lender can take back the property, as the bank will have a charge on it. The bank can evict the tenants, sell the property and use the income to pay off the mortgage debt if there is a repossession.
There are several types 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. The monthly payment never changes during the fixed rate term. If market interest rates rise, the borrower’s payment does not change on a fixed rate. An increase or decrease in the market interest rate will not affect the borrower’s mortgage repayments if they have a fixed rate.
After the fixed rate ends, your mortgage normally reverts to a ‘standard variable rate’, which is a rate set by the lender, bank or building society that’s lending you the money. If you have a diary system in place or a switched-on broker, you must remember to re-mortgage or contact your existing lender and change the rate three months before it increases to the variable rate. This is because the rates can increase or decrease as the lender sees fit, which will help you avoid higher monthly payments.
In short, the initial interest rate is often a low rate, which can make a mortgage seem more affordable than it really is. The borrower might not be able to keep up with higher monthly payments, should the rates be later increased. After the initial term, variable rates can be adjusted at any time, making the monthly payments 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. In Highgate-Wood, our mortgage brokers can assist you in finding the ideal mortgage deal to match your unique circumstances and specifications.
Handy Tools and Calculators
With a clear idea of the maximum you can borrow and how much the loan will cost, it then becomes easier to plan your future. Find out how your interest rate and total loan amount determines your mortgage repayments with 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 with a mortgage broker for your mortgage application in Highgate-Wood can be beneficial in various ways. Of these benefits, some of the most evident include:
The possibility of saving money is the most obvious advantage of working with a mortgage broker. You don’t have to handle the hard work, as this can be managed by an expert with ample experience, who will make sure your best interests are addressed. All you’ll need to do is fill out some details.
With limited understanding on the concept of mortgage brokers, some people don’t fully trust this, believing there must be a catch at some point. 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.
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 mortgages deals exist on the lower end that can be obtained by a number of mortgage brokers, possibly making the total cost of the loan that bit lower. 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
A mortgage broker will always be in favour of your own interests and not those of the lending institution. Not only should the role of being your agent be their focus, they also need to be knowledgeable consultants and problem solvers. With access to a wide range of mortgage products, a broker can offer you the greatest value in terms of interest rates, repayment amounts, and loan products. You will be interviewed by the mortgage brokers to determine your needs and goals – both in the short and long term. 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 example, if borrowers face credit issues, the broker will know which lenders offer the best products to meet their particular needs. 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
It’s not all about money. Your time and sanity are just as important as saving a bit of extra cash. Take into consideration the time you would need to research different kinds of loans from multiple lenders. You would only have to fill out one application form, instead of one for every lender you have to work with. 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. Your broker will set deals from major and less popular lenders side by side in order to discover an agreeable deal, with rates and total costs that are lower.
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. A few of the features may include options to make extra repayments, as well as drawdown facilities and offset accounts. Your general mortgage experience and overall expenses can be largely affected by these features. If you don’t know much about these concepts and how they can work for you, reach out to your broker over the phone for clarification and answers.
Access to exclusive non-advertised deals
Brokers have access to exclusive deals that aren’t advertised by the banks. The banks pass these deals on to the brokers, who are responsible for selling the products. Contacting a broker will unlock these extra benefits you would miss out on if you were to approach the bank yourself.
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 your request for an Agreement in principle/Decision in principle of a loan is turned down, a mark is left on 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. If you’re not on the lookout for them, you might not notice the subtleties that accompany loans. It’s these subtleties that can make a difference to your mortgage in the long haul. It’s beneficial to have an experienced professional to point out these things for you.
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. 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. For this reason, it’s necessary to find an honest and knowledgeable adviser, with ample experience. Our Mortgage Saving Experts will make your journey as seamless and transparent as possible. Why make things harder than necessary, after all? Let us make things easy for you and make sure we find you the most suitable deal.
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. Here at Mortgage Saving Experts, we treat all mortgage and insurance applications as our own. We’re all about this. 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! In essence “Find out about 1000s of mortgage deals by putting 15 minutes aside to talk 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, passionate, enthusiastic and very experienced team of mortgage and insurance experts.
Our mortgage and insurance experts are particularly good at listening to your current and future goals. These goals will be achieved when we work with you intently.
Why chose Mortgage Saving Experts?
For the first couple of years, you’re allowed an initial rate after taking out a mortgage. 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. Included below are the plus points of working with us:
- The deal you’ll get is better than the bank variable rate, which in turn saves you money.
- You won’t have to remember when the deal is due to end, 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.
- To arrange the best deal for you, we compare and dispense advice with regards thousands of mortgage 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. Our approach to mortgage advice involves three simple 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 Highgate-Wood include:
- Get to determine your situation and requirements by fact-finding.
- Clarify the costs related to buying and selling.
- Request all documents related to the application.
- Provide explanations and recommendations for the prospective mortgage.
- Get answers to any questions you might have.
- Obtain an agreement in principle.
- Submit your full mortgage application.
- 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 offer expert advice on a wide variety of mortgage products. In collaboration with our team, you won’t have any trouble finding the best mortgage products to match your specific requirements. Some of the most commonly requested mortgage types we help with 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. Typically, there are no problems with 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.
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. The purpose of using one is straightforward enough. If you have no knowledge about cars and yours develops a fault, you would call a mechanic rather than attempt to fix it yourself. The same applies to 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 thinking of a home purchase any time soon – or even within a couple of years – you should familiarise yourself with everything involved with mortgages. 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 can’t deal with all of that, talk to an adviser who will provide guidance accordingly.
Your credit is crucial.
A mortgage is of major importance. The banks risk a lot of money and have been increasingly cautious since the subprime mortgage crisis in 2008. Qualifying for a mortgage is boosted by good credit, but it isn’t compulsory. 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. 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
Basically, what you’re doing here is changing lenders to get a more suitable rate or cheaper deal. The two of them don’t have to go hand in hand. Let me clarify this. 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. It may seem cheaper to be on a slightly higher rate than pay an arrangement fee to another lender. Asking for advice before making up your mind about the deal is important, so that you don’t end up with a more expensive deal on the whole, even at a lower rate. Pay close attention.
One benefit of re-mortgaging is that you’ll not normally pay for any valuation or solicitors fees, although not everyone qualifies for this. Any reasoning depends solely on your circumstances at the time of re-mortgaging. So, please check with your adviser.
A mortgage deal conducted at the right time is an effective way to cut the cost of your mortgage bills significantly. While a re-mortgage deal can be beneficial for some, it’s not the best move for everyone, as it all depends on your unique circumstances.
Reasons for remortgaging your property
- Depending on your individual circumstances, such as…
- Mortgage debt is fairly minor.
- The financial situation is no longer the same.
- Costly early repayment charge.
- Home value reduced.
- You have credit problems.
- Current rate is ideal.
- We will dispense advice on the merits of pursuing a re-mortgage.
Buy to Let
A property bought with the purpose of renting to tenants is known as ‘buy to let’. According to the law, you cannot live in the property. 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 loan amount you can borrow is mostly based on the total rental income you receive.
- You’ll be required to pay a 3% stamp duty after your normal stamp duty.
- 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: If you want to buy a second property, find out the amount you’ll be require pay from your conveyancer/solicitor.
- A reputable adviser will know just what questions to ask in order to figure out the best mortgage for your specific needs.
- 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. A flat fee of roughly £500 is usually charged by the majority of independent brokers. 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.
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 receive a commission below the value of £695, we ask the client to pay the difference between the received commission and £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. 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.
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 an appointment with one of our qualified mortgage experts today. We can provide an initial estimate, without the need for any credit checks to begin with.
The Latest Best Mortgage Rates
We can help, whether you’re seeking to re-mortgage, purchase a buy to let, move home or find a mortgage for a first-time buyer. We compare thousands of the latest mortgage deals, so you can find the one you’re after.
What Our clients say About us
Our list of satisfied clients in Highgate-Wood is lengthy and diversified. If you doubt that we are the professionals most capable of finding you the best mortgage deal in Highgate-Wood at the lowest price, check out what some of our customers have to say about their experience with us. For a personal experience to discover how effective our services are, contact us 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
The majority of mortgages in the UK are made available by banks, building societies and specialised mortgage lenders. 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.
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 monitors the professional conduct of mortgage providers. There are stern rules that serve as a guide with regards using unfair, deceitful promotions and adverts, as well as checks for financial service contracts for consumers. Regulations were originally set out in the rules for Mortgage Conduct of Business (MCOB), but these were overhauled as a result of the FCA Mortgage Market Review (MMR) in 2014.
The Prudential Regulation Authority (a sister organisation to the FCA) presides over deposit-taking organisations in the UK, with regards their financial conduct. They make sure firms have a substantial level of capital to offset their lending risks.
The first step in tackling any issue you have with regards your mortgage provider is to take it up with them. If you feel it hasn’t been dealt with to your complete satisfaction, there is a complaints procedure which can be referred to the Financial Ombudsman Service. Some mortgages are not regulated by the Financial Conduct Authority such as moist Buy to Let mortgages and if you make a complaint about these you are unable to take these to the Financial Ombudsman Service
What To Ask Your Brighton Mortgage Broker?
Again, demand a specific answer – “Within three hours”, say, rather than “Quickly”.
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?”
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.
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
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.
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)
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.
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”.