What is a mortgage broker
A mortgage broker acts as an intermediary who brokers mortgage loans on behalf of individuals or businesses. Mortgage brokers exist to find a bank or direct lender that will be willing to make the specific loan an individual requires. If you work with a mortgage broker in Seven-Sisters, it won’t be so difficult to get a great deal on the mortgage loan you require. 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. If you fail to make payments when due, your mortgage provider would have the right to repossess (take back) the property.
While shorter or longer terms are available, mortgages are usually set for a 25-year period. As soon as you borrow the money, a plan for repayment is implemented. Even though the available mortgage plans vary, those that involve repayment plans on a monthly capital basis are very popular.
In addition to repaying the original loan (the ‘capital’), you’ll also have to pay interest on top. 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. If the borrower stops paying the mortgage, the lender can repossess the property against which the mortgage is secured.
If the home buyer does not keep up with mortgage payments, the lender can take the property back, as there are bank charges against it. The home’s tenants may be evicted by the bank, the property sold, and the equity used to clear the mortgage debt if there’s a repossession.
There are several types of mortgages. Even though there are longer fixed rate mortgage terms available, the borrower would have to pay the same interest rate for the initial terms of two, three or five years. Monthly payments remain constant during the fixed rate term. The borrower’s payments will not be affected by any increase in the market interest rates if they are 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.
At the end of the fixed rate, your mortgage would revert to a ‘standard variable rate’ put in place by the lender, bank or building society 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. Higher monthly payments may be hard to meet for the borrower if interest rates are increased later. Monthly payments after the initial term are usually unpredictable, since the variable rates could be changed at any time.
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. You can receive assistance from our mortgage brokers in Seven-Sisters 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. Find out how your interest rate and total loan amount determines your mortgage repayments with this handy calculator. 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?
In Seven-Sisters, working with a mortgage broker on your mortgage application is beneficial in a number of ways. Some of the most obvious of these benefits are:
The most visible benefit of choosing to work with a mortgage broker is that you will likely save money. 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 sceptical about this – especially with the concept of a mortgage broker not yet universally understood. There must be a catch somewhere, surely? A mortgage broker wouldn’t stand to gain anything by not working in your favour. You’ll need to bear this in mind, even though any concerns you might have are understandable.
In truth, brokers have to provide viable reasons to you, their regulatory body, the Prudent Regulation Authority or the Financial Conduct Authority for recommending the mortgage they have. To not do so could lead to them facing significant problems. 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. 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. 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. They should act not only as your agent, but also as a knowledgeable consultant and problem solver. 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. Mortgage brokers will interview you to identify your needs, as well as short and long term goals. Many situations demand more than the simple use of a 30-year or 15-year mortgage. Therefore, innovative mortgage strategies and sophisticated solutions are distinct advantages of working with an experienced mortgage broker. These include mortgage to raise capital for repaying debts, money for the children or essential home improvements, or even to enable the purchase of other properties such as buy to lets.
Has Flexibility Expertise to Meet Your Needs
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, a broker will have knowledge of the lenders who offer the best products to meet the needs of a client with a credit issue. Borrowers who find they need larger loans than their bank will approve can also benefit from a broker’s knowledge and ability to successfully obtain financing.
Save Time & Hassle
It isn’t only about money. Your time and sanity are just as important as saving some extra money. Consider how much time it would take you to research multiple loan types from multiple lenders. Unlike working with different lenders – which would require you to complete different forms every time – you’d only need one form with a mortgage broker. Your mortgage broker can make available a formal comparison of the loans recommended to advise on the information which completely illustrates cost differences, along with present rates, points and closing costs for every loan shown. Major lenders and those not so popular will be compared by your broker to seek out the most suitable deal for you, in terms of lower rates and total cost.
Outsourcing the work to someone who can provide an expert opinion is a great way to relieve yourself of the burden involved. 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
Brokers have access to exclusive deals which the banks do not announce. The deals are pushed by the banks on to the brokers, who are then charged with overseeing the sale of products. Contacting a broker will unlock these extra benefits you would miss out on if you were to approach 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
When you request an Agreement in principle/Decision in principle of a loan and are refused approval, this shows up on 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
Helping people secure loans is what mortgage brokers do for a living. They can access useful information and exclusive deals you likely couldn’t find yourself. If you aren’t looking for them, you’re likely to miss the subtle details that come with loans. In fact, it is these small details that can make a difference to your mortgage in the long run. Having the services of an experienced professional who can point these out for you is a huge benefit.
Rather than sacrifice a chunk of your day researching thousands of loans and lenders (and still potentially missing out on key subtleties), why not let someone with 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 are not as complex as they seem at first. This is the reason you need to find a widely experienced, knowledgeable and honest adviser. Your entire journey can be made stress-free and simple by our mortgage savings experts. After all, why make things more difficult than they need to be? Let us make things easy for you and make sure we find you the most suitable deal.
Mortgage Saving Experts provide an honest and transparent service that will leave our customers thinking that mortgages and insurance aren’t as daunting as they may seem. Here at Mortgage Saving Experts, we treat all mortgage and insurance applications as our own. These are the things we’re about. Mortgage Saving Experts are here, no matter what the circumstances, whether you’re a landlord, first time buyer, moving on to a new chapter or just re-mortgaging. We’re here to help! Fundamentally “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 are required to justify our reasons for making the mortgage recommendations we do to both you and our regulators, so you can understand why you have the mortgage you have.
Down to Earth Mortgage
We are an honest, enthusiastic and passionate team of mortgage insurance experts, with years of industry experience.
Your current and future goals will be identified by our mortgage insurance experts after talking with you. We will make these goals happen by working meticulously alongside you.
Why chose Mortgage Saving Experts?
For the first few years after taking out a mortgage, you’ll be subject to an initial rate. The lender’s variable rate is implemented after the initial rate is complete. 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.
- We can provide updates relating to the end of your deal, so you need not worry.
- While we deal with the stress on your behalf, you can sit back and ease your mind.
- 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.
- You’ll be provided expert advice and support right through the mortgage process.
Our Approach to Mortgage Advice
We provide personalised services and pay attention to all your specific needs. Three simple steps are taken in our approach to mortgage advice:
- 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 Seven-Sisters include:
- Learn about your situation and needs via fact-finding.
- Point out the costs that come with buying and selling.
- Ask for applicable documents necessary for the application.
- Make relevant suggestions and provide explanations about the prospective mortgage.
- Get answers to any questions you might have.
- An agreement in principle should be obtained.
- 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 provide professional advice on a broad range 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 frequently requested types of mortgage we assist with 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.
Different lenders have different ideas and rules regarding this. Being a First Time Buyer is usually not an 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.
While mortgages may look like a tedious process, they don’t have to be. The prospect of buying your first home comes with a lot of excitement, so if you manage to find a competent broker who can oversee the process at a reasonable price, then go right ahead. It is abundantly clear why you should use one. After all, if you don’t know a thing about cars and yours breaks down, you would rather call a mechanic than fix it yourself. The same applies to mortgages. Mortgage brokers can help you save money, time and effort, so why don’t you 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. Get to know what to do before your mortgage application, during the application process itself and the way in which to use it after buying the property. If you would rather avoid any stress, speak to an adviser, who will guide you accordingly.
Your credit is of great importance.
A mortgage is of major importance. Banks put up a lot of money at their own risk. So much so, they’ve been very careful since the subprime mortgage crisis of 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. In addition to assisting you with the purchase of your dream home, we will also help with financing at minimum cost and the most agreeable mortgage available.
Re-mortgage your home
Simply put, all you’re doing with this is changing from one lender to another to get a better rate or cheaper deal. The two do not necessarily go hand in hand. Let me make it clearer. 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 find it’s more practical to go on a slightly higher rate, without paying arrangement fees to any lender. Even if the rate is lower, you could find that you chose a more expensive deal when you add it all up, hence the need to speak to someone before deciding. Tread carefully.
The potential absence of valuation or solicitors fees is one of the plus points of re-mortgaging, even though not everyone qualifies for this. This is due to the fact that it is based solely on your disposition at the time of re-mortgaging. So, do find out from your adviser.
Performing a re-mortgage in time is a practical way to reduce your mortgage costs significantly. Even though a re-mortgage deal is accompanied by various benefits, it might not the best choice for you, depending on your unique circumstances.
Reasons for remortgaging your property
- Based on your specific needs, such as…
- Mortgage debt is considerably small.
- There have been significant changes in financial disposition.
- Early repayment charge is on the high side.
- A drop in the value of your home.
- You’re dealing with credit problems.
- Already on a great rate.
- We will advise you whether to re-mortgage or not.
Buy to Let
A property bought with the purpose of renting to tenants is known as ‘buy to let’. Legally, you aren’t allowed to 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 amount of rental income you receive more or less affects how the loan amount you’re able to borrow.
- You will have to pay 3% stamp in addition to 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: If you’re looking to buy a second property, you should ask your solicitor/conveyancer to work out the amount you have to pay.
- A knowledgeable adviser will help find the right mortgage to suit your requirements by asking you the relevant questions.
- To find out if you qualify, contact our advisers today.
How Much Do Mortgage Brokers Charge?
Most mortgage brokers get paid commission from lenders, which will be a percentage of the mortgage loan you receive. While the figure varies widely, it is generally set at around 0.33%, depending on the type of mortgage you require. For example, this could be a residential mortgage or buy to let and would take into account whether you’ve had any credit troubles recently. Most independent brokers charge a flat fee, which is typically around £500. Don’t forget to find out how brokers collect payment. The should be totally transparent, disclosing the amount to be charged, as well as their available fee structure.
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?
Many factors affect this, such as how much you earn, the amount you deposit, the number of children you have, as well as any debts you might have in the background. What determines the amount a lender will agree to lend is a full affordability assessment. This will help them understand your loan or credit commitments, as well as income and everyday household expenses. For mortgage purposes, they will also perform a credit check to be sure you have an adequate credit rating.
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 to meet with one of our experienced mortgage experts now. At the initial stage, we can give you an estimate, without needing to perform any credit checks.
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 happy clients in Seven-Sisters is long and diverse. If you doubt that we are the professionals most capable of finding you the best mortgage deal in Seven-Sisters 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. Below can be found recent news on mortgages to provide the insight you need to get started.
Mortgage Regulatory Information
Building societies, specialised mortgage lenders and banks provide the most mortgages across 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.
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 FCA regulates the professional behaviour 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 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.
With regards their financial conduct, deposit-taking firms in the UK come under the jurisdiction of FCA’s sister organisation, the Prudential Regulation Authority. They ensure firms have adequate capital levels to balance out 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 handled properly, there is a procedure that can have your complaint 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”.