What is a mortgage broker
Mortgage loans are brokered on behalf of companies and individuals by mortgage brokers, who effectively act as intermediaries. The job of a mortgage broker is to identify banks or direct lenders that would make the actual loan an individual seeks. You’ll have a stress-free time getting a great deal on the mortgage you need in Little-Heath 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.
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?
Quite simply, a mortgage is a loan. A mortgage is specifically linked to a piece of property so that it acts as security against the loan, which makes it different from personal loans. The property can be rightfully taken from you (repossession) by your mortgage provider if you do not make payments on time.
While shorter or longer terms are available, mortgages are usually set for a 25-year period. Once you’ve borrowed the money, a repayment plan is then set in place. Even though the available mortgage plans vary, those that involve repayment plans on a monthly capital basis are very popular.
Aside from repaying the money you borrowed initially, you will be charged interest on the amount you’ve been loaned (the ‘capital’). Secured using the collateral of a particular property, a mortgage is a debt instrument the borrower must repay via a predetermined structure of payment. Large properties can be bought by individuals and businesses via a mortgage facility, whereby they don’t have to pay the entire cost immediately. The loan and interest attached needs to be paid back over some years before the borrower can own the property without a mortgage. Failure to make mortgage payments can result in the lender taking back the property used as collateral for the mortgage.
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. If there is a repossession, the tenants can be evicted by the bank and the property sold to repay the mortgage debt.
There are several types of mortgages. With a fixed rate mortgage, the borrower pays the same interest rate for an initial term (i.e. two, three or five years), although longer fixed rate terms are available. Monthly payments remain constant during the fixed rate term. An increase in interest rates in the market won’t change the payments of the borrower if they have 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.
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. 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.
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. After the initial term, variable rates can be adjusted at any time, making the monthly payments unpredictable.
Interest-only mortgages, tracker rates, offset mortgages, secured loans, buy to lets, and bridging loans are less-common types of mortgages that could be available, so contact an independent broker to discover your options. You can receive assistance from our mortgage brokers in Little-Heath to find a mortgage deal that best matches your individual specifications and circumstances.
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. 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 fill in those values, along with your term and press ‘Click to calculate’ to immediately see the amount you will have to repay per month.
Why Use A Mortgage Broker?
Working with a mortgage broker for your mortgage application in Little-Heath can be beneficial in various ways. Some of the more obvious benefits 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.
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 fact, a broker could be in serious trouble if they are unable to prove to you, their regulators, the Financial Conduct Authority or the Prudential Regulation Authority why they’ve recommended the particular mortgage that they have. 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. A reputable mortgage broker will disclose how they are paid for their services, as well as detail the total cost of the loan. Positive user experience is much more valuable to a mortgage advisor company than padding out an individual broker’s pocket.
Finds The Most Advantageous Deal
A mortgage broker will always be in favour of your own interests and not those of the lending institution. In addition to being your agent, they should also be knowledgeable consultants and problem solvers. 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. Mortgage brokers will interview you to identify your needs, as well as short and long term goals. Sophisticated solutions and innovative mortgages are distinct advantages of working with experienced broker, because simple 15 or 30-year mortgages aren’t enough in some situations. These include mortgages to raise capital for debt repayment, money for your children, important home renovations or even the purchase of other properties like buy to lets.
Has Flexibility Expertise to Meet Your Needs
Any problems that may arise can be dealt with by a mortgage broker, who will oversee the whole process, guiding the client through any situation along the way. For 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’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 compares loans from major and less popular lenders to find you the best deal with the lowest rates and overall cost.
Outsourcing the work to someone who can provide an expert opinion is a great way to relieve yourself of the burden involved. 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. These features can include drawdown facilities, the option to make extra repayments and offset accounts to name a few. A noticeable difference can be made to your overall experience and the cost of your mortgage. If you’re unfamiliar with these concepts and how they might affect you, your broker can clarify and answer any questions via a phone call.
Access to exclusive non-advertised deals
Brokers have access to exclusive deals that aren’t advertised by the banks. The banks push these deals on to brokers, who are in charge of selling the products. Speaking to a broker unlocks these extra perks you would otherwise miss out on by going directly to a bank.
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. With the required knowledge and experience brokers possess, you’ll have a better chance at approval the first time around.
Access to expert knowledge
Mortgage brokers assist people with obtaining loans as part of their job. They have access to helpful information and exclusive deals you’d otherwise not find. If you aren’t looking for them, you’re likely to miss the subtle details that come with loans. It’s these subtleties that can make a difference to your mortgage in the long haul. It is a huge plus to have the services of an experienced expert to show these things to you.
Rather than putting time aside to research thousands of loans and several lenders – and still possibly miss important subtleties – why not let someone else who has industry experience handle the work? 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. Making the process as straightforward and seamless as it can be is something our mortgage experts will do for you. After all, why make everything more stressful than it ought to be? 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. All the mortgage and insurance applications we take care of at Mortgage Saving Experts are treated as if we own them. This is what we do. 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. We are here to assist! Fundamentally “Find out about 1000s of mortgage deals by putting 15 minutes aside to talk 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 a team of experienced mortgage insurance experts, driven by honesty, passion and enthusiasm.
Our mortgage insurance experts take pride in listening to the current and future objectives our customers have. These goals will be achieved when we work with you intently.
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. Three months before this rate is up for renewal, our team will contact you again to put a new deal in place before your rate and monthly payments increase. Other benefits of working with us include:
- 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 take time to relax, while we handle the stress for you.
- This is our area of expertise; you’ll always receive advice from a qualified mortgage expert.
- To arrange the best deal for you, we compare and dispense advice with regards thousands of mortgage deals.
- For the entire mortgage process, you will be expertly advised and supported.
Our Approach to Mortgage Advice
Your individual needs will be duly considered, as we provide fully personalised services. The approach we take 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:
Our services are more remarkable than those of other mortgage brokers in Little-Heath because:
- Get to determine your situation and requirements by fact-finding.
- Spell out the costs buying and selling involves.
- Request relevant documents to assist with the application.
- Recommend and explain the prospective mortgage.
- Respond to any questions you might have.
- Obtain an agreement in principle.
- Get your whole mortgage application submitted.
- Answer any questions and work together with your mortgage lender, solicitor and estate agent until the final stages.
Mortgage Types We Provide Expert Advice On
We advise our clients 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. 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.
Every lender has different rules and ideas about this. Being a First Time Buyer is not generally considered to be a problem. 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. Buying your first home can be exciting, so if you come across a suitable broker who can handle the process for you at a fair price, do take advantage of their expertise. The reason you should use one is quite apparent. It stands to reason that you would contact a mechanic if your car became faulty – especially if you knew little or nothing about cars. It’s the same with mortgages. You can cut down on cost, effort and time with mortgage brokers, so why not use one? You won’t have to pay for the initial consultation.
Buying a home
You should brush up your knowledge of mortgages if a home purchase is a viable option for you any time soon (or a few years down the line). 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 can’t deal with all of that, talk to an adviser who will provide guidance accordingly.
Your credit is crucial.
A mortgage is a major issue. 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. 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. Not only will we help you buy your dream home, we’ll also help you finance it with the lowest cost and most convenient mortgage deal available.
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. The two don’t automatically go hand in hand. Let me simplify this for you. 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. You may find it’s more practical to go on a slightly higher rate, without paying arrangement fees to any 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. Tread carefully.
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. Any reasoning depends solely on your circumstances at the time of re-mortgaging. So please check or ask your adviser.
A re-mortgage completed on time is a smart way to significantly reduce the cost of your mortgage related bills. 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 is considerably small.
- There has been a change in financial circumstances.
- Early repayment charge that’s costly.
- A reduction in home value.
- You’re dealing with credit problems.
- Present rate is just fine.
- We will provide guidance to help you choose whether to 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. 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.
- 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: If you’re purchasing a second property, ask your conveyancer/solicitor about the figure you’ll have to pay.
- A good adviser will know the exact questions to pose and will find a mortgage that fits your exact requirements.
- To find out if you qualify, contact our advisers today.
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 find out from brokers how you pay them. They need to be totally clear, informing you of the fee structure they use and just how much you are due to be charged.
For our fee structure, we charge clients £695; any commission we receive from mortgage lenders is subtracted from that figure If we 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 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. A total affordability assessment is required to determine how much a lender will agree to lend; this takes into account your income, any loan or credit card commitments you have, as well as regular household expenses. A credit check will be undertaken for mortgage purposes to confirm you have sufficient 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 today for an appointment with one of our capable mortgage experts. Without the need for credit checks, we can at least provide an initial estimate.
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 make comparisons on thousands of recent mortgage deals to help you find just what you’re looking for.
What Our clients say About us
Our list of happy clients in Little-Heath is long and diverse. If you doubt that we are the professionals most capable of finding you the best mortgage deal in Little-Heath at the lowest price, check out what some of our customers have to say about their experience 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 available when looking for the most suitable mortgage deal, the more beneficial this is for you. To help you begin on the right path, find recent insightful mortgage news below.
Mortgage Regulatory Information
In the UK, most mortgages are provided by building societies, specialised mortgage lenders and banks. 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. 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. The original regulations represented in the rules for Mortgage Conduct of Business (MCOB) were reconstructed due to the 2014 FCA Mortgage Market Review (MMR).
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 a substantial level of capital to offset their lending risks.
If you have a complaint about your mortgage provider, the first step is to take up the matter 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”.