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. With a mortgage broker in White-City, you’ll have an easier time procuring the mortgage loan you need at the best possible terms. If you have a poor credit score or any other problems that could have an impact on your mortgage application, the right mortgage broker can increase your chances immeasurably.
Professional mortgage brokers are bound under strict regulations and required to comply with banking and finance laws in the customer’s jurisdiction, so, you don’t have to worry about being in the wrong hands.
What Is A Mortgage?
Quite simply, a mortgage is a loan. Unlike personal loans, a mortgage is specifically tied to a piece of property, so that it acts as security against the loan. Mortgage providers can rightfully take back (repossess) the property if you default on your payments.
Typically, mortgages are laid out for a set period – usually 25 years, although shorter or longer terms are also possible. Once you’ve borrowed the money, a repayment plan is then set in place. Although there are different types of mortgages, the most common is one whereby you are bound to a monthly capital repayment plan.
In addition to repaying the original loan (the ‘capital’), you’ll also have to pay interest on top. Acquired by the collateral of a particular property, a mortgage is an instrument of debt the borrower is required to repay, according to a pre-set payment structure. 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. If the borrower defaults in making mortgage payments, the property on which the mortgage is secured can be repossessed by the lender.
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 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.
Mortgages come in many forms. While there are longer fixed rate terms provided, the borrower will pay the same interest for the initial term; that is, two, three or five years, with a fixed rate mortgage. Monthly payments do not change during the fixed rate term. If market interest rates rise, the borrower’s payment does not change on a fixed rate. The borrower’s mortgage repayments do not change if the market interest rates rise or fall 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.
In fact, the initial interest rate is usually a low rate, which can make a mortgage appear less expensive than it is. An increase in interest rates later on could mean that the borrower would not be able to continue with payments. With the possibility of the variable rates being changed at any time after the initial term, monthly payments subsequently become unpredictable.
Talk to an independent broker about other types of mortgages that could be options for you, such as buy to lets, interest-only mortgages, secured loans, bridging loans, offset mortgages and tracker rates, which are not so common. In White-City, our mortgage brokers can assist you in finding the ideal mortgage deal to match your unique circumstances and specifications.
Handy Tools and Calculators
With a clear idea of the maximum you can borrow and how much the loan will cost, it then becomes easier to plan your future. 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. Simply fill in the values plus your term and press ‘Click to calculate’ to immediately discover the amount you must repay monthly.
Why Use A Mortgage Broker?
Working on your mortgage application with a mortgage broker in White-City comes with many different benefits. Some of the most prominent benefits are:
In working with a mortgage broker, the most noticeable benefit would be the opportunity to save money. You’ll just need to fill out some details and an experienced professional with your best interests in mind will deal with the hard work.
Some people worry about how true this is, considering the entire idea of mortgage brokers is still misunderstood somewhat around the globe. So, where is the catch? Even though this line of thought is understandable, you can rest easy, because not working in your best interests is in no way profitable to a mortgage broker.
If the broker cannot provide genuine reasons for recommending the mortgage they have (to you, their regulators, the Financial Conduct Authority or the Prudential Regulation Authority), then they could be in serious trouble. Exclusive 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. Reputable mortgage brokers will usually inform you how they get paid for their services, as well as disclose the details of the entire cost of the loan. A positive user experience is more important to a mortgage advisor company than just filling the pocket of an individual broker.
Finds The Most Advantageous Deal
Your interests – and not those of the lending institution – will be represented by the mortgage broker. They should act not only as your agent, but also as a knowledgeable consultant and problem solver. For terms like interest rates, repayment value and loan products, you can get the best possible value from a broker, who has access to a wide array of mortgage products. To ascertain your goals and needs (both short and long term), you’ll be interviewed by the mortgage broker. 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. If a borrower has credit issues for instance, the broker would know about lenders who have the best products available to meet their needs. 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 is not just about money. Saving some extra cash is great, but so is your time and sanity. Take into consideration the time you would need to research different kinds of loans 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. To find the best deal in terms of lower rates and overall cost, your broker will make comparisons between popular and less popular lenders.
You don’t have to burden yourself with all the work, as outsourcing is a viable option to take in order to gain expert advice. To be of assistance throughout the entire application and approval process, mortgage brokers do the bulk of the work. This includes handling all the paperwork, helping with applications for government ski schemes, answering questions and providing insight on other options and loan features you may not have given thought to. These features can include drawdown facilities, the option to make extra repayments and offset accounts to name a few. Your general mortgage experience and overall expenses can be largely affected by these features. If you don’t know much about these concepts and how they can work for you, reach out to your broker over the phone for clarification and answers.
Access to exclusive non-advertised deals
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. Talking to a broker can release these extra perks, which you’d otherwise not enjoy by contacting the bank yourself.
While banks can only provide their own deals (and not the deals offered by other banks), brokers can scour the entire market to discover the most suitable deal.
Better chance of pre-approval success
A mark is left on your credit rating if your request for an Agreement in principle/Decision in principle of a loan is turned down. Brokers have the knowledge and experience required to give you the best shot at being approved at the first attempt.
Access to expert knowledge
The job of a mortgage broker is to help people secure loans. 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. In fact, it is these small details that can make a difference to your mortgage in the long run. An experienced professional to point you in the right direction is extremely beneficial.
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? Just like you’d acquire the services of a hairdresser to replenish damaged hair or a plumber for leaking pipes, a mortgage broker is an excellent option for any of your home loan needs.
About Mortgage Saving Experts
Mortgages and insurance might seem really complicated at first, but they’re not. For this reason, it’s necessary to find an honest and knowledgeable adviser, with ample experience. Our mortgage savings experts will make your task as easy and straightforward as possible. After all, why make things more difficult than they need 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. Here at Mortgage Saving Experts, we treat all mortgage and insurance applications as our own. This is what we’re all about. At Mortgage Saving Experts, our services are available regardless of circumstances, whether you’re a landlord, a first-time buyer, moving onto a new chapter or simply re-mortgaging. We’re here to help! Essentially “Search up to a thousand mortgage deals by talking to an adviser for roughly 15 minutes.”
Our Team of Brighton Mortgage Experts
We make it our duty to get you the best deal the market has to offer, as we are regulated by the Financial Conduct Authority. 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
Our team of mortgage insurance experts is made up of honest, passionate, enthusiastic and widely experienced individuals.
Our mortgage and insurance experts will pay attention to you and understand all your current and future objectives. To achieve these objectives, we will then work hand in hand with you.
Why chose Mortgage Saving Experts?
For the first couple of years, you’re allowed an initial rate after taking out a mortgage. The rate is raised to the lender’s variable rate after the initial rate ends. 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 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 business, so you’ll only be advised by qualified mortgage experts.
- We compare thousands of deals, so can advise you accordingly and arrange the very best.
- You’ll receive expert advice and support throughout the entire mortgage process.
Our Approach to Mortgage Advice
The services we offer are personalised and take into account your unique needs. We take three basic steps 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 White-City include:
- Find out what your needs and circumstances are through fact-finding.
- Point out the costs that come with buying and selling.
- Request relevant documents to assist with the application.
- Recommend and explain the prospective mortgage.
- Proffer replies to any questions you might have.
- Collect an agreement in principle.
- Get your whole mortgage application submitted.
- Liaise with your estate agent, mortgage lender and solicitor to answer any question through to completion.
Mortgage Types We Provide Expert Advice On
We offer expert advice on a wide variety of mortgage products. Working together with us, finding the most suitable mortgage product to suit your needs won’t be difficult at all. Some of the most commonly requested mortgage types we help with include:
First time buyers
First Time Buyers are classed by most mortgage lenders 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.
Every lender has different rules and ideas about this. Being a First Time Buyer is not generally considered to be a problem. To be eligible for stamp duty relief, First Time Buyers are required to never have been owners of property before. This is applicable worldwide for stamp duty purposes.
Mortgage processes may look tough to negotiate, but they really don’t need 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. Why you should use one is pretty obvious. Besides, if your car breaks down and you have no knowledge of cars, you wouldn’t attempt to fix it yourself; you would use the services of a mechanic. The same applies to mortgages. You can save on time, effort and even money with mortgage brokers, so you should use one. You won’t have to pay for the initial consultation.
Buying a home
You should get to know more about mortgages if you’re thinking of buying a home in the near future or a few years to come. Study what you should do before the application, during the process of application, and how to utilise the mortgage after buying your property. If you can’t deal with all of that, talk to an adviser who will provide guidance accordingly.
Your credit is of great importance.
A mortgage is a serious affair. Banks risk a large amount of money and have been steadily more careful since the subprime mortgage crisis in 2008. Good credit helps to qualify for a mortgage, but it isn’t a necessity. We can also guide you with regards how much you can afford to pay for your new home and what should be your price ceiling, based on your current situation. 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
Simply put, all you’re doing with this is changing from one lender to another to get a better rate or cheaper deal. They don’t always sit well together. I’ll explain this clearly. If your mortgage isn’t so big, you might consider it not worthwhile to pay an arrangement fee to a new lender for a low 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. Pay close attention.
One benefit of re-mortgaging is that you’ll not normally pay for any valuation or solicitors fees, although not everyone qualifies for this. This is because it is dependent on your circumstances alone 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. Depending on your circumstances, it might not be the ideal move for you – even though a re-mortgage arrangement certainly has its benefits.
Reasons for remortgaging your property
- Based on your unique circumstances, such as…
- Mortgage debt isn’t so big.
- The financial disposition is now different.
- Early repayment charge that’s costly.
- A reduction in home value.
- You’re dealing with credit problems.
- Already on a suitable current rate.
- We will dispense advice on the merits of pursuing a re-mortgage.
Buy to Let
A property purchased in order to be rented to tenants is a ‘buy to let’. You aren’t allowed to live in the property by law. The number of available lenders will be restricted if you’re a First Time Buyer, purchasing a buy to let property. Also, extra checks are made by the lender in cases like these.
- When purchasing a buy to let property, there are a few things you’ll need to know.
- The loan amount you can borrow is dependent on how much rental income you receive.
- You’ll be required to pay a 3% stamp duty after your normal stamp duty.
- If the value of the property isn’t valued at the amount for which stamp duty becomes liable, you are still required to pay the extra 3% of purchase cost.
- TIP: If you’re purchasing a second property, ask your conveyancer/solicitor about the figure you’ll have to pay.
- A knowledgeable adviser will help find the right mortgage to suit your requirements by asking you the relevant questions.
- Contact our advisers to find out whether you’re eligible.
How Much Do Mortgage Brokers Charge?
Many mortgage brokers are paid commission from lenders, which represents a percentage of your mortgage loan. 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 should be honest and up front, telling you the amount owed and the fee structure they have in place.
We have a fee structure based on charging our clients £695. From that figure, we then deduct any commission received from the mortgage lender 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?
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. The amount a lender would be willing to lend is dependent on a comprehensive affordability assessment that helps them understand your income, as well as any loan or credit card commitments you might have and everyday household expenses. A credit check will be undertaken for mortgage purposes to confirm you have sufficient credit rating.
Prior to applying for a mortgage in full, obtain a decision in principle to form a clear picture with regards the amount you can borrow. Arrange to see one of our qualified mortgage experts today. Initially, we can at least give you an idea, without needing to conduct any credit checks.
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 thousands of the latest mortgage deals to help you find exactly what you need.
What Our clients say About us
In White-City, we have long and diverse list of satisfied clients. If you still have doubts about our ability to professionally provide the best deal in White-City at the cheapest price, see for yourself 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
Having more information at your disposal when looking for the most ideal mortgage deal places you in a more advantageous position. Below can be found recent news on mortgages to provide the insight you need to get started.
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.
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. 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. 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.
If you have a complaint about your mortgage provider, the first step is to take up the matter with them. You utilise a complaint procedure via the FCA if you don’t think it has been suitably dealt with. In turn, this can be referred to the Financial Ombudsman Service if deemed necessary. 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”.