What is a mortgage broker
A mortgage broker acts as an intermediary who brokers mortgage loans on behalf of individuals or businesses. Mortgage brokers strive to find a bank or direct lender that will agree to meet the particular loan an individual requires. If you work with a mortgage broker in Streatham, it won’t be so difficult to get a great deal on the mortgage loan you require. 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.
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?
A mortgage is in effect 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. If you default on your payments, your mortgage provider has the right to take back (repossess) the property.
While shorter or longer terms are available, mortgages are usually set for a 25-year period. A repayment plan is arranged as soon as you borrow the money. Mortgages with monthly capital repayment structures are the most common, even though there are other options available.
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. Mortgages are a vehicle for individuals and businesses to make large property purchases, without paying the entire value of the purchase up front. Over time, the loan and interest included can be repaid by the borrower, before the property can become theirs without any 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. In the case of a repossession, the bank may evict the home’s tenants and sell the house, using the income from the sale to clear the mortgage debt.
There are various 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 do not change 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. Changes in market interest rates have no effect on the borrower’s mortgage repayment 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. 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. If interest rates rise later on, the monthly rates may become too high for the borrower to pay. Variable rates after the initial term can be changed at any time, causing monthly payments to be rather 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. To match any needs and requirements you might have, our mortgage brokers in Streatham can help to find the best possible mortgage deal for you.
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. 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. 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?
In Streatham, 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’ll be required to complete a few details, but the hard work is managed by an experienced professional, who has your best interests in mind.
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? As understandable as such thoughts are, it’s important to understand that mortgage brokers have nothing to gain by not working in your best interests.
In short, a broker is required to give proof of their reasons for recommending the mortgage they have (to you, their regulators, the Prudent Regulation Authority or Financial Conduct Authority) or they could be penalised. 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. 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 represents your interests, rather than those of a lending institution. Acting as your agent isn’t all they should do, but also problem solvers and knowledgeable consultants too. 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
The client will be under the direction of a mortgage broker, who will manage the process and handle any issues that could arise 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 some extra money. Imagine how much time it would take to find out about the numerous types of loans available 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. 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.
Reduce the workload for yourself and outsource it to someone who can provide professional advice. 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 could include things such as drawdown facilities and options for making extra repayments and offset accounts. 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
There are exclusive deals not made public by the banks that brokers have access to. The banks push these deals on to brokers, who are in charge of selling the products. If you contact the bank yourself, you wouldn’t have access to the extra benefits you would otherwise get by speaking to a broker.
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
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. Brokers have the knowledge and experience required to give you the best shot at being approved at the first attempt.
Access to expert knowledge
A mortgage broker’s job is to help people obtain loans. Helpful information and exclusive deals you won’t find yourself are accessible to them. 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.
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. 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 complicated as they might first seem. 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. 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. This is what we do. 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 are here to provide assistance! Basically “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. You’ll get to understand why you received the mortgage you did, because we have to justify the recommendations we make to both you and our regulators.
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. 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. The lender’s variable rate is implemented after the initial rate is complete. 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. Some other reasons for which it’s beneficial to work with us include:
- The deal you’ll get is better than the bank variable rate, which in turn saves you money.
- We will help you keep abreast of the expiry dates for deals, so you won’t have to worry.
- You can sit back and relax, while we do all the hard work for you.
- We know our stuff; you’ll always receive pertinent 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 supported and expertly advised throughout the whole mortgage process.
Our Approach to Mortgage Advice
We make available personalised services and put into consideration all your unique needs. 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:
What makes our services superior to those of other mortgage brokers in Streatham includes:
- Learn about your situation and needs via fact-finding.
- Explain what costs buying and selling involve.
- Request relevant documents to assist with the application.
- Make relevant suggestions and provide explanations about the prospective mortgage.
- Proffer replies to any questions you might have.
- Collect an agreement in principle.
- Send in your entire mortgage application.
- 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 provide professional advice on a broad range of mortgage products. You won’t have any difficulty finding the right mortgage products to suit your needs when working with us. 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.
For each lender, the rules and ideas about this differ. There usually are no issues in being a First Time Buyer. To qualify for stamp duty relief as First Time Buyers, you must have never owned a property before, anywhere in the world.
Mortgages can seem a daunting process, but they do not 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. 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. With mortgages, the same principle applies. 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 considering buying a home in the near future or further down the line, you should get to know mortgages a lot better in the meantime. Learn what to do when applying, within the application process and even how to use a mortgage after buying your home. If you’d prefer a different approach, then speak to an adviser who can guide you through it.
Your credit is vital.
A mortgage is serious issue. Since the subprime mortgage crisis in 2008, banks have trodden more carefully in terms of risking money up front. Good credit helps to qualify for a mortgage, but it isn’t a necessity. 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. 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
Effectively, all you’d be doing with this is changing to a different lender to find a better or more affordable deal. The two do not necessarily go hand in hand. I’ll explain this clearly. If you have a small mortgage, you’ll probably find it’s not worthwhile paying an arrangement fee to the lender just to go on a lower rate. You may realise that it’s less expensive to go on a slightly higher rate than paying any lender an arrangement fee. 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. Pay close attention.
One advantage of re-mortgaging is that you won’t have to pay any valuation or solicitors fees. That said, not everyone is eligible for this exemption. This is due to the fact that it is based solely on your disposition at the time of re-mortgaging. So, please make enquiries with your adviser.
A re-mortgage completed on time is a smart way to significantly reduce the cost of your mortgage related bills. 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
- Depending on your unique needs, like…
- Mortgage debt is relatively small.
- There has been a change in financial circumstances.
- Costly early repayment charge.
- A reduction in home value.
- You are having trouble with credit.
- Already on a great rate.
- We will dispense advice on the merits of pursuing a re-mortgage.
Buy to Let
‘Buy to let’ properties are those you wish to purchase and then rent to tenants. Legally, you cannot live in the property. You can purchase a buy to let property as a First Time Buyer, but you’ll be restricted to the number of available lenders, while extra checks will be made by the lender in such situations.
- 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 largely dependent on the rental income you receive.
- You’ll have to pay an extra 3% stamp duty on top of your normal stamp duty.
- Even if the value of the property isn’t enough to be liable for stamp duty, you are still required to pay an extra 3% of the purchase price.
- TIP: Ask your solicitor/conveyancer to work out how much you’ll have to pay if you’re buying a second property.
- A good adviser will know the exact questions to pose and will find a mortgage that fits your exact requirements.
- To see if you’re eligible, reach out now to our advisers.
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. 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. A flat fee of roughly £500 is usually charged by the majority of independent brokers. Don’t forget to find out how brokers collect payment. 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 we receive is less than £695, we then ask the client to make up the difference between what we have been paid in commission up to £695. If for example, we are paid a commission of £495, we would ask you to pay a fee of £200, payable on production of your mortgage offer. Please note, we only take payments on a results-based arrangement.
How Much Can I Borrow?
This depends on several factors, such as the deposit value and how much you earn, how many children you have, as well as 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.
To be sure of how much you can borrow, obtain a decision in principle, prior to completing a full application. Make plans to meet with one of our experienced mortgage experts now. Without the need for credit checks, we can at least provide an initial estimate.
The Latest Best Mortgage Rates
We can provide help in many different situations; for instance, re-mortgaging, first time purchase, moving home or buy to lets. We compare recent mortgage deals in large quantities to help you find just what you want.
What Our clients say About us
The list of happy clients in Streatham is a lengthy and diverse one. If you aren’t convinced that we are the professionals to make the best possible mortgage deal in Streatham at the lowest price, take a look at what some of our customers have said about their experience with us. To get a first-hand experience of the great services we provide, call 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. The latest mortgage news below will provide the insight you need to properly get started.
Mortgage Regulatory Information
Banks, building societies and specialised mortgage lenders account for the bulk of mortgage providers in the UK. 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.
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 regulates the professional behaviour of mortgage providers. Strict rules are in place against using false or unfair adverts and promotions, in addition to checks to ensure the terms of contracts for financial services are fair for the consumer. 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.
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 ensure firms have a sizeable enough capital to balance out their lending risks.
For lodging complaints about your mortgage provider, the first step 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?
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”.