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. The job of a mortgage broker is to identify banks or direct lenders that would make the actual loan an individual seeks. With a mortgage broker in Oakleigh-Park, you’ll have an easier time procuring the mortgage loan you need at the best possible terms. 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. A mortgage is not like a personal loan, as it is specifically attached to a piece of property used as collateral 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.
Mortgages are usually set for a set period of 25 years, but can sometimes be set for longer or shorter terms. 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 is a debt instrument that is acquired using the collateral of a particular property that the loanee must repay in predetermined amounts. Individuals and businesses use mortgages to buy property, without having to pay the total value up front. The property can be owned by the borrower without a mortgage after the loan plus interest are repaid by them over a period of time. The lender can repossess the property against which the mortgage is secured if the borrower does not keep up with mortgage payments.
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. 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. Monthly payments do not change during the fixed rate term. The borrower would continue with the same payments if they have a fixed rate, even if the market interest rates go up. An increase or decrease in the market interest rate will not affect the borrower’s mortgage repayments if they have a fixed rate.
As soon as the fixed rate ends, your mortgage will be returned to a ‘standard variable rate’ set by the bank, lender or building society that lends you the money. 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.
In fact, the initial interest rate is usually a low rate, which can make a mortgage appear less expensive than it is. Higher monthly payments may be hard to meet for the borrower if interest rates are increased later. With the possibility of the variable rates being changed at any time after the initial term, monthly payments subsequently become unpredictable.
Other types of mortgages exist that are not so common. However, they may be available to you, so talk to an independent broker about such options, which include offset mortgages, interest-only mortgages, buy to lets, secured loans, tracker rates and bridging loans. Our mortgage brokers in Oakleigh-Park can provide help for getting the best mortgage deal to suit your personal specifications and requirements.
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. Use this handy calculator to see just how much your mortgage repayments are going to be, based on your total loan amount and interest rate. Find out how much you’ll have to repay every month instantly by simply entering those values with your term and pressing ‘Click to calculate’.
Why Use A Mortgage Broker?
There are a wide range of benefits to be enjoyed from working with a mortgage broker in Oakleigh-Park with regards your mortgage application. Some of the more obvious benefits include:
The possibility of saving money is the most obvious advantage of working with a mortgage broker. You only need to provide a few details, before an experienced professional committed to protecting your interests handles the hard work.
Some people are sceptical about this – especially with the concept of a mortgage broker not yet universally understood. There must be a catch somewhere, surely? 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. 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. Detailing the entire cost of the loan and letting you know how they get paid for their services is the duty of any reputable broker. Filing the pockets of a broker is of little value to a mortgage advisor company when compared to making sure customers have a positive experience.
Finds The Most Advantageous Deal
A mortgage broker will always be in favour of your own interests and not those of the lending institution. They shouldn’t just play the role of your agent, but also those of problem solver and knowledgeable consultant. You can get the best value as per interest rates, loan products and repayment amounts thanks to the wide range of mortgage products to which a broker has access. The mortgage broker will talk with you to get a clear picture of your needs, as well as short and long term goals. The simple use of a 30 or 15-year mortgage is inadequate for many situations, which is why sophisticated solutions and innovative strategies are the benefits of working with an experienced mortgage broker. This includes mortgage to raise capital for repayments, money for necessary home improvements or children, or even to buy 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, if borrowers face credit issues, the broker will know which lenders offer the best products to meet their particular needs. A broker will be beneficial in providing the necessary knowledge to source financing if a borrower requires a loan that’s larger than the bank would normally approve.
Save Time & Hassle
It is not just about money. Your time and sanity are just as important as saving a bit of extra cash. Imagine how much time it would take to find out about the numerous types of loans available 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. 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 provide an array of support throughout the application and approval process. This can include assisting with paperwork, responding to questions and helping with government scheme applications, as well as explaining all the available options and loan features you may not have considered or been aware of. Some of these features can include drawdown facilities, offset accounts and options for extra repayments to name but a few. Your general mortgage experience and overall expenses can be largely affected by these features. Better still, if you’re not well versed with these concepts and how they could affect you, your broker can clarify answer questions you may have over the phone.
Access to exclusive non-advertised deals
Brokers have access to exclusive deals which the banks do not announce. These deals are passed by the banks to the brokers, who then have the responsibility of selling the products. Contacting a broker will unlock these extra benefits you would miss out on if you were to approach the bank yourself.
Brokers can search the whole market for the finest deal, whereas individual banks can only offer their own deals and not those of other banks.
Better chance of pre-approval success
When you request an Agreement in principle/Decision in principle of a loan and are refused approval, this shows up on your credit rating. Brokers have the knowledge and experience required to give you the best shot at being approved at the first attempt.
Access to expert knowledge
Helping people secure loans is what mortgage brokers do for a living. Helpful information and exclusive deals you won’t find yourself are accessible to them. Loans come with certain subtleties you could miss if you’re not looking out for them. In fact, it is these small details that can make a difference to your mortgage in the long run. If you have an experienced professional who can show you these things, you’ll be at a distinct advantage.
Instead of removing a chunk of your day to conduct voluminous research of loans and multiple lenders as well as possibly missing important subtleties, why not give the work to a person who has ample industry experience? 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 might seem really complicated at first, but they’re not. This is the reason you need to find a widely experienced, knowledgeable and honest adviser. Making the process as straightforward and seamless as it can be is something our mortgage experts will do for you. Besides, why complicate things more than necessary? Let us simplify everything for you and ensure we get the best deal possible.
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. All mortgage and insurance applications are handled like they’re our own at Mortgage Savings Experts. 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. We are here to assist! Approximately “Search 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 will pay attention to you and understand all your current and future objectives. We will then work together with you to reach these goals.
Why chose Mortgage Saving Experts?
For the first couple of years, you’re allowed an initial rate after taking out a mortgage. After this initial rate finishes, the rate increases to the lender’s variable rate. Our team will contact you three months prior to the date of renewal to strike a new deal, before both your rate and monthly payment are raised. Included below are the plus points of working with us:
- You’ll get a better deal than the bank variable rate and subsequently save money.
- You won’t have to remember when the deal is due to end, as we will do this for you.
- While we deal with the stress on your behalf, you can sit back and ease your mind.
- We know our business, so you’ll only be advised by qualified mortgage experts.
- We compare, advise and arrange the best mortgage for you from thousands of available deals.
- You’ll be supported and expertly advised throughout the whole mortgage process.
Our Approach to Mortgage Advice
We offer a personalised service that takes into consideration your unique needs. 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 Oakleigh-Park include:
- Use fact-finding to properly understand your individual needs.
- Explain what costs buying and selling involve.
- Ask for related documents to help with the application.
- Make relevant suggestions and provide explanations about the prospective mortgage.
- Respond to any questions you might have.
- Get an agreement in principle.
- Get your whole mortgage application submitted.
- We will collaborate with your estate agent, solicitor and mortgage lender and reply to any questions through to completion.
Mortgage Types We Provide Expert Advice On
We advise our clients expertly on a vast selection of mortgage products. Working together with us, finding the most suitable mortgage product to suit your needs won’t be difficult at all. Mortgage types that we’re frequently asked to handle include:
First time buyers
First Time Buyers are classified by the majority of mortgage lenders as those 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. There usually are no issues in being a First Time Buyer. To qualify for stamp duty relief, First Time Buyers must have never been property owners in any location in the world previously.
While mortgages may look like a tedious process, they don’t have to be. Buying your first home is one of the most exciting things ever, so if you find a reasonably priced, reputable broker to manage the process for you, do hire their services. The purpose of using one is straightforward enough. 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
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. Learn what to do before applying for a mortgage; what to watch for during the process; and how to use a mortgage after you’ve bought your home. If you can’t deal with all of that, talk to an adviser who will provide guidance accordingly.
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. 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. Helping you buy your dream home is not all we do; we will also help you finance it with the lowest cost and most beneficial mortgage deal available.
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. They don’t always sit well together. Let me clarify this. It may seem unwise to pay an arrangement fee to another lender to get on a lower rate if you have a small mortgage. You may realise that it’s less expensive to go on a slightly higher rate than paying any lender an arrangement fee. 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. Focus on any small print.
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 make enquiries with your adviser.
Performing a re-mortgage in time is a practical way to reduce your mortgage costs 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
- Based on your individual circumstances, like…
- Mortgage debt isn’t so big.
- The financial disposition is now different.
- Early repayment charge that’s costly.
- Decrease in home value.
- You are having trouble with credit.
- Already on a great rate.
- We will advise you whether to re-mortgage or not.
Buy to Let
A ‘buy to let’ property is one bought with a view to renting to others. According to the law, you cannot live in the property. If you’re a First Time Buyer, the number of available lenders will be restricted if you’re purchasing a buy to let, while extra checks would be carried out by the lender in such cases.
- There are some things you might want to know 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 have to pay an extra 3% stamp duty on top of your normal stamp duty.
- If the value of the property isn’t valued at the amount for which stamp duty becomes liable, you are still required to pay the extra 3% of purchase cost.
- TIP: Ask your solicitor/conveyancer to work out how much you’ll have to pay if you’re buying a second property.
- To help determine the most suitable mortgage to meet your needs, an expert mortgage adviser will know the specific questions to which you will need to provide answers.
- 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. This is usually around 0.33%, although this does vary massively, depending on what mortgage you require. For example, this would take into account buy to let or residential mortgages and whether you’ve had any credit problems in the recent past. Most independent brokers charge a flat fee, which is typically around £500. Be sure to enquire about how to make payments to brokers. They need to be totally clear, informing you of the fee structure they use and just how much you are due to be charged.
Our fee structure is based upon charging the client £695; any commission which is received from the mortgage lender is deducted from that figure If the commission paid to us falls short of £695, our client will then be asked to make up the difference between the commission we receive and the figure of £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?
A lot of factors influence this, like the number of children you have, the deposit amount, your income and any debts you might 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.
For a more accurate idea of how much you can borrow, get a decision in principle before you apply for a mortgage in full. Make plans today for an appointment with one of our capable mortgage experts. 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 make comparisons between thousands of recent mortgage deals to help you find the one you want.
What Our clients say About us
Our list of happy clients in Oakleigh-Park is long and diverse. If you doubt that we are the professionals most capable of finding you the best mortgage deal in Oakleigh-Park at the lowest price, check out what some of our customers have to say about their experience with us. Contact us today to get a first-hand experience of the excellent services we provide.
Latest Mortgage News
Having more information at your disposal when looking for the most ideal mortgage deal places you in a more advantageous position. To help you begin on the right path, find recent insightful mortgage news below.
Mortgage Regulatory Information
Most mortgages in the UK are provided by building societies, banks and specialised mortgage lenders. Although a big portion of the market share is owned by Lloyds Banking Group and Nationwide Building Society, all together there are 200 different financial institutions providing mortgages in Britain.
Although banks and building societies have always been closely regulated in the UK, the former Financial Services Authority (now the FCA) implemented a regulatory scheme specifically for mortgages as a result of the Financial Services Act of 2000.
The professional conduct of mortgage providers is regulated by the FCA. Strict rules exist that monitor the use of dishonest and misleading adverts and promotions, checking to ensure the terms of any contract for financial services are fair to the customer. 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.
The Prudential Regulation Authority (a sister organisation to the FCA) presides over deposit-taking organisations in the UK, with regards their financial conduct. They ensure firms have a high enough 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 don’t like how the issue has been dealt with, you can take your complaint 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”.