What is a mortgage broker
A mortgage broker represents individuals or companies looking to broker mortgage loans. The purpose of mortgage brokers is to look for banks or direct lenders that will willingly provide the specific loan an individual would need. Finding a good deal for a mortgage loan in Ockham will be easier if you work with a mortgage broker. 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?
Simply put, a mortgage is a loan. As opposed to personal loans, a mortgage is tied to a piece of property, acting as a security against the loan. Mortgage providers can rightfully take back (repossess) the property if you default on your payments.
Mortgages are usually set for a set period of 25 years, but can sometimes be set for longer or shorter terms. As soon as you borrow the money, a plan for repayment is implemented. While there are various mortgage options, the most popular one requires a monthly capital repayment plan.
You won’t only have to repay the capital (the money you borrowed), but also the interest on it. A mortgage is a debt instrument, secured by the collateral of a specified property that the borrower is obliged to pay back via a predetermined set of payments. Mortgages allow individuals and businesses to purchase sizable properties, without paying the entire cost at once. The loan and interest attached needs to be paid back over some years before the borrower can own the property without a mortgage. If the borrower defaults in making mortgage payments, the property on which the mortgage is secured can be repossessed by the lender.
Should there be a default on mortgage payments, the lender can take back the property, as the bank will have a charge on it. The bank can evict the tenants, sell the property and use the income to pay off the mortgage debt if there is a repossession.
Mortgages come in various guises. 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. An increase in interest rates in the market won’t change the payments of the borrower if they have a fixed rate. If market interest rates drop or increase, the borrower’s mortgage repayment remains the same if they are on a fixed rate.
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. If you have a diary system in place or a switched-on broker, you must remember to re-mortgage or contact your existing lender and change the rate three months before it increases to the variable rate. This is because the rates can increase or decrease as the lender sees fit, which will help you avoid higher monthly payments.
Quite often, the initial interest rate is a low rate, which can make a mortgage appear cheaper than it is. If interest rates rise later on, the monthly rates may become too high for the borrower to pay. 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. You can receive assistance from our mortgage brokers in Ockham 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. Just fill in those values, along with your term and press ‘Click to calculate’ to immediately see the amount you will have to repay per month.
Why Use A Mortgage Broker?
Working with a mortgage broker for your mortgage application in Ockham can be beneficial in various ways. Some of the most prominent benefits are:
The possibility of saving money is the most obvious advantage of working with a mortgage broker. 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 not fully convinced about this, what with the concept of a mortgage broker still vaguely understood universally. So, there has to be a catch somewhere, surely? 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. 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. For a mortgage advisor company, a positive user experience is higher on the value chain than lining the pockets of an individual broker.
Finds The Most Advantageous Deal
A mortgage broker will always be in favour of your own interests and not those of the lending institution. Acting as your agent isn’t all they should do, but also problem solvers and knowledgeable consultants too. 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. You’ll be required to meet with the mortgage broker to document your needs, as well as your short and long term goals. Simple 30 or 15-year mortgages are not sufficient in many cases, which is why innovative mortgages and sophisticated solutions are distinct benefits of working with experienced brokers. These include mortgages to raise capital for repaying debts, money for marital needs or children, home renovations or the purchase of 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. If a borrower requires a loan too large for the bank to approve, a broker can be of benefit by providing the knowledge and ability to successfully source financing.
Save Time & Hassle
It is not just about money. Saving some extra cash is great, but so is your time and sanity. Imagine how much time it would take to find out about the numerous types of loans available from multiple lenders. You’d only need to complete one application with a mortgage broker, instead of filling out forms for every individual lender. A formal comparison of the loans recommended can be provided by your mortgage broker to act as a guide for the information that accurately illustrates the differences in cost, showing present rates and points, as well as closing costs for each loan. Your broker will set deals from major and less popular lenders side by side in order to discover an agreeable deal, with rates and total costs that are lower.
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. 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. A few of the features may include options to make extra repayments, as well as drawdown facilities and offset accounts. A noticeable difference can be made to your overall experience and the cost of your mortgage. Better still, your broker can answer any questions you might have over the phone or provide clarity if you don’t know much about these concepts and the impact they could have on you.
Access to exclusive non-advertised deals
There are exclusive deals not made public by the banks that brokers have access to. The brokers are charged with selling the products, as the deals are pushed on to them by the banks. Contacting a broker will unlock these extra benefits you would miss out on if you were to approach the bank yourself.
A bank can provide access to their own deals (not those offered by other banks), but brokers can gain access to the entire market to find the best deals.
Better chance of pre-approval success
Whenever you request an Agreement in principle / Decision in principle of a loan, this leaves a mark on your credit rating if you’re refused. Brokers are knowledgeable and have the much-needed experience to give you a better shot at approval the first time you apply.
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. There are small details accompanying loans that you might miss if you’re not looking for them. In the long run, subtleties like these are significant to your mortgage. If you have an experienced professional who can show you these things, you’ll be at a distinct advantage.
Instead of taking time out of your day to research thousands of loans and multiple lenders – and still potentially missing key subtleties – why not hand the work to someone who’s experienced in this industry? 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. Why complicate things more than necessary, after all? Allow us to secure the best deal possible for you and make everything straightforward.
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. Here at Mortgage Saving Experts, we treat all mortgage and insurance applications as our own. We’re all about this. No matter the circumstances – whether this is your first time buying, you’re a landlord, moving onto a new chapter or even re-mortgaging, Mortgage Saving Experts are here to help. We are here to provide assistance! Essentially “Take 15 minutes to talk to 1 adviser and find out about 1000s of mortgage deals.”
Our Team of Brighton Mortgage Experts
We make sure we help you get the best available deal the market can offer, as we are regulated by the Financial Conduct Authority (FCA). 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 team of mortgage insurance experts, who are enthusiastic, passionate and widely experienced.
Our mortgage insurance experts take pride in listening to the current and future objectives our customers have. These goals will be achieved when we work with you intently.
Why chose Mortgage Saving Experts?
For the first couple of years, you’re allowed an initial rate after taking out a mortgage. At the end of this initial rate, this returns 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. Some other reasons for which it’s beneficial to work with us include:
- You’ll get a better deal than the bank variable rate and subsequently save money.
- You don’t have to keep track of the timeline, as we will look after this for you.
- 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.
- We compare, advise and arrange the best mortgage for you from thousands of available deals.
- You’ll receive expert advice and support throughout the entire 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 Ockham includes:
- Learn about your situation and needs via fact-finding.
- Explain what costs buying and selling involve.
- Request applicable documents to aid the application.
- Recommend and explain the prospective mortgage.
- Get answers to any questions you might have.
- An agreement in principle will be put in place.
- Have your entire mortgage application sent in.
- 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 expertly on a vast selection of mortgage products. You won’t have any difficulty finding the right mortgage products to suit your needs when working with us. Amongst the mortgage types we’re commonly asked to handle are:
First time buyers
Most mortgage lenders put people in the First Time Buyers category if they 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.
The ideas and rules differ from lender to lender. 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.
While mortgages may look like a tedious process, they don’t have to be. The purchase of your first home can be filled with excitement, so if you discover a well-respected broker to manage the process for a reasonable price, then use one. The purpose of using one is straightforward enough. After all, if your car broke down and you knew nothing about cars, you wouldn’t try to fix it yourself. Instead, you would take it to a mechanic. It isn’t any different with mortgages. Mortgage brokers can save you time, effort and money, so why not use one? There are no charges 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. 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 would rather avoid any stress, speak to an adviser, who will guide you accordingly.
Your credit is vital.
A mortgage is a major issue. Since the subprime mortgage crisis in 2008, banks have trodden more carefully in terms of risking money up front. To be eligible for a mortgage, good credit is useful but not absolutely essential. We can also provide guidance about the amount you can afford to pay for your new home and what should be your maximum offer, based on your current circumstances. 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. I’ll explain this clearly. If your mortgage is a small one, you might find that it isn’t profitable paying an arrangement fee to a lender to secure a lower rate. It may seem cheaper to be on a slightly higher rate than pay an arrangement fee to another 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 because only your circumstances are considered at the time of re-mortgaging. So, please ask your adviser about it.
A brilliant way to ensure you cut down on your mortgage bills is to re-mortgage on time. 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 individual circumstances, like…
- Mortgage debt isn’t considerable.
- Financial circumstances have changed.
- Early repayment charge is on the high side.
- Decrease in home value.
- Existing credit problems.
- Present rate is just fine.
- 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’. According to the law, you cannot live in the property. If you’re a First Time Buyer, you can purchase a buy to let property, but the number of lenders available is restricted. There are also extra checks made by the lender in these circumstances.
- There are some things you might want to know when purchasing a buy to let property.
- The 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.
- If the property is below the value at which stamp duty becomes liable, you will still have to pay the extra 3% of the purchase price.
- TIP: If you want to buy a second property, find out the amount you’ll be require pay from your conveyancer/solicitor.
- A reputable adviser will know just what questions to ask in order to figure out the best mortgage for your specific needs.
- Contact our advisers to find out whether you’re eligible.
How Much Do Mortgage Brokers Charge?
A percentage of your mortgage loan is paid as commission to many mortgage brokers by lenders. Even though the figure isn’t set in stone, it is usually about 0.33%, based on the type of mortgage you require – for instance, a residential mortgage or buy to let. Also, any recent credit issues you may have had would be taken into consideration. A flat fee of roughly £500 is usually charged by the majority of independent brokers. Be sure to enquire about how to make payments to brokers. They must be completely clear, letting you know the exact figure and fee structure 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 we are paid a commission less than £695, the client is then asked to pay the necessary difference to top it up to £695. If we receive a mortgage commission of £495 for example, we would ask our clients to pay us the difference of £200 after the mortgage offer is produced, 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. In addition, they will perform a credit check to ensure your credit rating is sufficient for the purpose of a mortgage.
To get an idea of the amount you can loan, get a decision in principle before applying for a mortgage in full. Make plans to meet with one of our experienced mortgage experts now. We can at least give you an idea, without having to do any credit checks at the initial stage.
The Latest Best Mortgage Rates
Our services are available whether you want to re-mortgage, move home, purchase a buy to let or procure a first-time buyer mortgage. We compare recent mortgage deals in large quantities to help you find just what you want.
What Our clients say About us
We have a list of clients in Ockham that is both lengthy and diverse. If you still have doubts about our ability to professionally provide the best deal in Ockham at the cheapest price, see for yourself what some of our customers have said about their experience with us. For a personal experience to discover how effective our services are, contact 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. To provide insight and help you get started, find recent news on mortgages below.
Mortgage Regulatory Information
Building societies, specialised mortgage lenders and banks provide the most mortgages across the UK. 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.
Even though UK banks and building societies have always been regulated closely, the FCA (formerly the Financial Services Authority) put a regulatory scheme in place for mortgages, because of the Financial Services Act 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. As a result of the FCA Mortgage Market review of 2014, the initial regulations set out in the rules for Mortgage Conduct of Business were revamped.
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 a sizeable enough capital to balance out their lending risks.
Taking up the matter with your mortgage provider is the first step to take if you have any complaints about them. If you think it hasn’t been sorted out satisfactorily, you can take the complaint to the Financial Ombudsman Service if 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”.