What is a mortgage broker
Mortgage loans are brokered on behalf of companies and individuals by mortgage brokers, who effectively act as intermediaries. Mortgage brokers function to find banks or lenders that will willingly make the exact loan an individual requires. You’ll have a stress-free time getting a great deal on the mortgage you need in Littleton-Common if you work with a mortgage broker. Even with complicated circumstances or a poor credit score, the ideal mortgage broker will boost your chances of getting a mortgage.
There are regulations in place to guide professional mortgage brokers and make sure they adhere to banking and finance laws in the jurisdiction of customers, so you can be sure you’re in good hands.
What Is A Mortgage?
Quite simply, a mortgage is a loan. A mortgage is 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 fail to make payments when due, your mortgage provider would have the right to repossess (take back) the property.
In essence, mortgages have a set duration – mostly 25 years – although there are shorter or longer terms available. A repayment plan is arranged as soon as you borrow the money. Although there are different types of mortgages, the most common is one whereby you are bound to a monthly capital repayment plan.
You won’t only have to repay the capital (the money you borrowed), but also the interest on it. 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. Mortgages are a vehicle for individuals and businesses to make large property purchases, without paying the entire value of the purchase up front. Over a period of many years, the borrower repays the loan (plus interest) until they eventually own the property outright, without any mortgage. The lender can repossess the property against which the mortgage is secured if the borrower does not keep up with mortgage payments.
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 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. For fixed rate terms, the monthly payments remain the same throughout. An increase in interest rates in the market won’t change the payments of the borrower if they have a fixed rate. An increase or decrease in the market interest rate will not affect the borrower’s mortgage repayments if they have a fixed rate.
As soon as the fixed rate ends, your mortgage will be returned to a ‘standard variable rate’ set by the bank, lender or building society that lends you the money. You must remember to re-mortgage if you have a good broker or diary system in place. Alternatively, call your current lender to adjust the rates around three months prior to it being raised to the variable rate. This way, you can avoid paying too much on monthly payments, because lenders can adjust the rates as they deem fit.
A mortgage can seem less costly than it really is, with the initial interest rate often being a low rate. The borrower might not be able to keep up with higher monthly payments, should the rates be later increased. 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. Our mortgage brokers in Littleton-Common can provide help for getting the best mortgage deal to suit your personal specifications and requirements.
Handy Tools and Calculators
With a clear idea of the maximum you can borrow and how much the loan will cost, it then becomes easier to plan your future. With this handy calculator, get a better understanding of how much your mortgage repayments will be, based on your full loan and interest rate. 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?
In Littleton-Common, working with a mortgage broker on your mortgage application is beneficial in a number of 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 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 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? While this train of thought is understandable, be assured that most mortgage brokers don’t have an incentive to work against your best interests.
The broker could actually be at a disadvantage if they cannot prove to you, their regulators, the Financial Conduct Authority or the Prudent Regulation Authority why they made the recommendations in respect of the mortgage in question. Many mortgage brokers can obtain exclusive mortgage deals not found on the high street, potentially making the total loan cost lower for the client. Reputable mortgage brokers communicate how they expect to be paid for their services, as well as outline the details of the entire loan. 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
For a mortgage broker, your interests – rather than those of the lending institution – are paramount. 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. Amongst the benefits of working with experienced mortgage brokers are innovative mortgages and sophisticated solutions, because regular 15 or 30-year mortgages aren’t usually sufficient. These include money for children or carrying out much needed renovations, mortgages to raise capital for repaying debts or even money to buy other properties like buy to lets.
Has Flexibility Expertise to Meet Your Needs
A mortgage broker will work with the client in any situation, as well as manage the process and take care of any bumps in the road that may occur. For instance, brokers would know the lenders that can make available the best products for clients with credit issues. A broker will be beneficial in providing the necessary knowledge to source financing if a borrower requires a loan that’s larger than the bank would normally approve.
Save Time & Hassle
It’s not all about money. While it’s a good thing to save some extra money, your sanity and time matter just as much. Think of the amount of time you’d spend researching multiple loan types from multiple lenders. You’d only need to complete one application with a mortgage broker, instead of filling out forms for every individual lender. Your mortgage broker can provide a formal comparison of any loans recommended, as well as advise on the information which accurately portrays cost differences, reflecting current rates, points, and 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.
Take some of the work off your shoulders and outsource it to someone who can offer expert 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. Drawdown facilities, offset accounts and extra repayments (to name a few) are just some of the features involved. Your general mortgage experience and overall expenses can be largely affected by these features. Better still, if you’re not well versed with these concepts and how they could affect you, your broker can clarify answer questions you may have over the phone.
Access to exclusive non-advertised deals
There are exclusive deals that aren’t advertised by banks to which brokers have access. The deals are pushed by the banks on to the brokers, who are then charged with overseeing the sale of products. Speaking to a broker unlocks these extra perks you would otherwise miss out on by going directly to a bank.
Unlike brokers who have access to the whole market to search for the best deals, banks can offer their own deals alone – and not the deals offered by other banks.
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 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 information and select deals you wouldn’t discover by yourself. There are small details accompanying loans that you might miss if you’re not looking for them. In fact, it is these small details that can make a difference to your mortgage in the long run. It is a huge plus to have the services of an experienced expert to show these things to you.
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? The same way you would contact a plumber to fix a leaking pipe or a hairdresser to work on damaged hair, contacting a mortgage broker is an ideal option for your home loan needs.
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 make things harder than necessary, after all? Allow us to secure the best deal possible for you and make everything straightforward.
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. All the mortgage and insurance applications we take care of at Mortgage Saving Experts are treated as if we own them. We’re all about this. 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 are here to provide assistance! 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 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 a team of experienced mortgage insurance experts, driven by honesty, passion and enthusiasm.
Our mortgage and insurance experts are particularly good at listening to your current and future goals. We will make these goals happen by working meticulously alongside you.
Why chose Mortgage Saving Experts?
You’ll get an initial rate for the first few years after taking out a mortgage. After the initial rate period, the rate is then raised to the lender’s variable rate. Our team will contact you three months prior to the date of renewal to strike a new deal, before both your rate and monthly payment are raised. Included below are the plus points of working with us:
- You’ll get a better deal than the bank variable rate and subsequently save money.
- You don’t have to keep track of the timeline, as we will look after this for you.
- You can take a breather, while we do the bulk of the work.
- This is our area of expertise; you’ll always receive advice from a qualified mortgage expert.
- Comparing, advising and setting up the best possible mortgage deal from amongst the many available is what we do.
- You’ll be provided expert advice and support right through the mortgage process.
Our Approach to Mortgage Advice
The services we offer are personalised and take into account your unique needs. We approach mortgage advice using three basic 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:
Our services are more remarkable than those of other mortgage brokers in Littleton-Common because:
- Get to determine your situation and requirements by fact-finding.
- Explain the costs involved with buying and selling.
- Ask for applicable documents necessary for the application.
- Provide explanations and recommendations for the prospective mortgage.
- Proffer replies to any questions you might have.
- Get 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. 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
First Time Buyers are classified by the majority of mortgage lenders as those who have either:
- Never owned a property or
- People who have owned a property in the past, but not owned one for six months or more.
Every lender has different rules and ideas about this. There usually are no issues in being a First Time Buyer. 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.
Mortgages may appear to be a rather difficult process, but they really don’t have to be. Buying your first home can be exciting, so if you come across a suitable broker who can handle the process for you at a fair price, do take advantage of their expertise. 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’s the same with mortgages. You can save on time, effort and even money with mortgage brokers, so you should 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. Find out what to do before applying for a mortgage; during the application process; and how to use it accordingly after purchasing your home. If you would rather not take this approach, then instead contact an adviser, who will be able to walk you through the process.
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. 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
In essence, the only thing you’re doing here is swapping one lender for another to get a cheaper deal or better rate. The two don’t automatically go hand in hand. Let me explain. It may seem unwise to pay an arrangement fee to another lender to get on a lower rate if you have a small mortgage. Being on a rate that’s a bit higher may seem more agreeable to you than paying an arrangement fee 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. Tread carefully.
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 because only your circumstances are considered at the time of re-mortgaging. So, do find out from 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
- Depending on your unique needs, like…
- Mortgage debt is considerably small.
- The financial situation is no longer the same.
- Expensive early repayment charge.
- Home value reduced.
- You have credit issues.
- Current rate is ideal.
- 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. 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.
- 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.
- Other than your regular stamp duty, you will have to pay an extra 3% stamp duty on top.
- An extra 3% of the purchase price will still be required of you, even if the value of the property isn’t high enough for the stamp duty to be liable.
- TIP: If you’re purchasing a second property, ask your conveyancer/solicitor about the figure you’ll have to pay.
- 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?
Commission is usually paid to mortgage brokers by lenders; this will be a percentage of the mortgage loan you secure. 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. Many independent brokers usually charge about £500 as a flat fee. Remember to ask brokers how they want to be paid. They need to be totally clear, informing you of the fee structure they use and just how much you are due to be charged.
The fee structure we adopt is based upon charging the client £695 and deducting from that figure any commission paid by the mortgage lender. 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. For instance, if the commission we receive is £495, then we would require you to pay £200 to make up the difference. This can be paid when your mortgage offer has been produced, meaning we only get 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. For mortgage purposes, they will also perform a credit check to be sure you have an adequate credit rating.
To be sure of how much you can borrow, obtain a decision in principle, prior to completing a full application. Arrange for an appointment with one of our certified mortgage experts today. 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 thousands of the latest mortgage deals to help you find exactly what you need.
What Our clients say About us
In Littleton-Common, we have long and diverse list of satisfied clients. If you doubt that we are the professionals most capable of finding you the best mortgage deal in Littleton-Common at the lowest price, check out what some of our customers have to say about their experience with us. For a personal experience to discover how effective our services are, contact 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
Most mortgages in the UK are provided by building societies, banks and specialised mortgage lenders. 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.
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.
Mortgage providers are tightly regulated by the FCA, in terms of their professional conduct. 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.
Regarding their financial conduct, organisations that take deposits in the UK fall under the FCA’s sister organisation’s jurisdiction, the Prudential Regulation Authority. They ensure firms have adequate capital levels to balance out their lending risks.
If there is something bothering you about your mortgage provider, talking to them about it is the first step to take. 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”.