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 strive to find a bank or direct lender that will agree to meet the particular loan an individual requires. Finding a good deal for a mortgage loan in Newchapel will be easier 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.
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?
Quite simply, a mortgage is a loan. Quite unlike personal loans however, a mortgage is used as guarantee against a loan, because it is linked to a piece of property. The property can be rightfully taken from you (repossession) by your mortgage provider if you do not make payments on time.
Typically, mortgages are laid out for a set period – usually 25 years, although shorter or longer terms are also possible. A plan for you to make repayments is drawn up once you’ve borrowed the money. Mortgages with monthly capital repayment structures are the most common, even though there are other options available.
You won’t only have to repay the capital (the money you borrowed), but also the interest on it. Secured using the collateral of a particular property, a mortgage is a debt instrument the borrower must repay via a predetermined structure of payment. Large properties can be bought by individuals and businesses via a mortgage facility, whereby they don’t have to pay the entire cost immediately. Over time, the loan and interest included can be repaid by the borrower, before the property can become theirs without any mortgage. If the borrower stops paying the mortgage, the lender can repossess the property against which the mortgage is secured.
If the home buyer does not keep up with mortgage payments, the lender can take the property back, as there are bank charges against it. 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 several types of mortgages. 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. The borrower’s payments will not be affected by any increase in the market interest rates if they are on a fixed rate. Changes in market interest rates have no effect on the borrower’s mortgage repayment if they have a fixed rate.
Your mortgage will usually revert to a ‘standard variable rate’ laid down by the bank, building society or lender that lends you the money, once the fixed rate ends. This rate can go up or down whenever the lender sees fit, so if you have a diligent broker or good diary system in place, remember to re-mortgage or call your existing lender and change the rate by looking around three months before that rate increases to the variable rate. This will save you paying much higher monthly payments.
In short, the initial interest rate is often a low rate, which can make a mortgage seem more affordable than it really is. An increase in interest rates later on could mean that the borrower would not be able to continue with payments. Monthly payments after the initial term are usually unpredictable, since the variable rates could be changed at any time.
Interest-only mortgages, tracker rates, offset mortgages, secured loans, buy to lets, and bridging loans are less-common types of mortgages that could be available, so contact an independent broker to discover your options. To match any needs and requirements you might have, our mortgage brokers in Newchapel can help to find the best possible mortgage deal for you.
Handy Tools and Calculators
With an estimate in mind – in terms of how much you can borrow and cost of the loan – you’ll be able to plan your future more easily. Take advantage of this handy calculator to determine exactly how much your mortgage repayments will be, based on your total loan figure and interest rate. Find out how much you’ll have to repay every month instantly by simply entering those values with your term and pressing ‘Click to calculate’.
Why Use A Mortgage Broker?
In Newchapel, working with a mortgage broker on your mortgage application is beneficial in a number of ways. Some of the more obvious benefits include:
The most obvious benefit of choosing a mortgage broker is the potential to 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 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.
In fact, a broker could be in serious trouble if they are unable to prove to you, their regulators, the Financial Conduct Authority or the Prudential Regulation Authority why they’ve recommended the particular mortgage that they have. 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. Detailing the entire cost of the loan and letting you know how they get paid for their services is the duty of any reputable broker. A mortgage advisor company values ensuring a positive experience for their customers over padding the pocket of a broker.
Finds The Most Advantageous Deal
For a mortgage broker, your interests – rather than those of the lending institution – are paramount. They shouldn’t just play the role of your agent, but also those of problem solver and knowledgeable consultant. 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. You’ll be required to meet with the mortgage broker to document your needs, as well as your short and long term goals. 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 navigates the client through any situation, handling the process and smoothing any bumps in the road along the way. For example, if borrowers face credit issues, the broker will know which lenders offer the best products to meet their particular needs. The knowledge and capability of a broker to successfully source financing will be of great benefit to a borrower who realises the loan they need may be too large for a bank to approve.
Save Time & Hassle
It’s never just about money. As much as it’s important to save some extra money, your time and sanity are important as well. Imagine how much time it would take to find out about the numerous types of loans available from multiple lenders. You’d be required to fill out just one application with a mortgage broker, unlike completing one for every different lender. Your mortgage broker can make available a formal comparison of the loans recommended to advise on the information which completely illustrates cost differences, along with present rates, points and closing costs for every loan shown. To find the best deal in terms of lower rates and overall cost, your broker will make comparisons between popular and less popular lenders.
Take some of the work off your shoulders and outsource it to someone who can offer 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. 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 deals are pushed by the banks on to the brokers, who are then charged with overseeing the sale of products. Going to the bank directly could cause you to miss out on added benefits such as these, which you can procure by speaking to a broker.
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
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. The experience and knowledge required for your best chance of approval the first time you apply is something brokers have in abundance.
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. It’s these subtleties that can make a difference to your mortgage in the long haul. 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? 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 might seem really complicated at first, but they’re not. This is the reason you need to find a widely experienced, knowledgeable and honest adviser. Our mortgage savings experts will make your task as easy and straightforward as possible. Besides, why complicate things more than necessary? Let us make things easy for you and make sure we find you the most suitable deal.
With the honest and transparent services customers receive at Mortgage Saving Experts, they will come to realise that mortgages and insurance are not as challenging as they seem. At Mortgage Saving Experts, we handle every single mortgage and insurance application like they belong to us. This is what we do. 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 assist! Approximately “Take 15 minutes to talk to 1 adviser and find out about 1000s of mortgage deals.”
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. 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, passionate, enthusiastic and very experienced team of mortgage and insurance experts.
Our mortgage and insurance experts pride themselves on listening to what your current and future objectives are. We will then work together with you to reach these goals.
Why chose Mortgage Saving Experts?
After taking out a mortgage, you’ll get an initial rate for the first couple of years. After the initial rate period, the rate is then raised to the lender’s variable rate. You will be contacted by our team approximately three months prior to the renewal time to agree a new deal, before the monthly payment and rate are increased. Here are some of the other advantages you’ll enjoy if you work with us:
- You’ll save some money, as the deal you get is better than the bank variable rate.
- We can provide updates relating to the end of your deal, so you need not worry.
- You can sit back and relax, while we do all the hard work for you.
- We are good at what we do, so you’ll always be advised by professional mortgage experts.
- We undertake comparisons and then advise and arrange the best mortgage for you, choosing from thousands of 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. Three simple steps are taken in our approach to mortgage advice:
- Let’s have an Initial Chat, so we can get to know You and What Your Requirements Are
- We Search the Entire Market to Find the Best Deal for You
- We’ll Present you with the Cheapest and best Deals Available for Both Mortgages and Insurance Cover
How Mortgage Saving Expert Brokers Can Help you:
What makes our services superior to those of other mortgage brokers in Newchapel includes:
- Learn about your situation and needs via fact-finding.
- Explain what costs buying and selling involve.
- Ask for applicable documents necessary for the application.
- Make relevant suggestions and provide explanations about the prospective mortgage.
- Proffer replies to any questions you might have.
- Get an agreement in principle.
- Submit your full mortgage application.
- Work with your estate agent, solicitor and mortgage lender to answer any questions comprehensively.
Mortgage Types We Provide Expert Advice On
We dispense expert advice on a wide range of mortgage products. By working with our team, you’ll have no trouble finding the perfect mortgage product to match your needs. 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.
Different lenders have different ideas and rules regarding 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.
Mortgages can seem a daunting process, but they do not have to be. It’s rather exciting to be buying your first home, so if you find a reputable broker to get the job done for you at a fair price, then do use one. The reason you should use one is fairly obvious. 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 help you save money, time and effort, so why don’t you use one? The initial consultation comes at no cost at all.
Buying a home
If you’re thinking of a home purchase any time soon – or even within a couple of years – you should familiarise yourself with everything involved with mortgages. 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 of great importance.
A mortgage is not to be taken lightly. Banks put up a lot of money at their own risk. So much so, they’ve been very careful since the subprime mortgage crisis of 2008. For mortgage eligibility, good credit helps, but isn’t vital. We can also offer guidance regarding how much you can afford to pay for your new home and how to set your limit, depending on your ongoing situation. We will help you with funding, the lowest cost and most suitable deal on offer, in addition to helping you buy your dream home.
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. They don’t necessarily have to be paired together. Let me clarify this. It may seem unwise to pay an arrangement fee to another lender to get on a lower rate if you have a small mortgage. You might find it cheaper by going on a slightly higher rate and paying no arrangement fee to the lender at all. Even with a lower rate, you could end up having a costlier deal in total, which is why it’s always prudent to talk to someone before you make any decisions. Focus on any small print.
A notable benefit of re-mortgaging is the absence of solicitors or valuation fees, even though some people are not eligible for this. The reason is that it is based on your disposition alone at the time of re-mortgaging. So, please ask your adviser about it.
A smart way to significantly minimise the cost of your mortgage bills is to undertake a re-mortgage on time. Although it can be a good thing – depending on your individual needs – a re-mortgage deal might not be the most suitable choice.
Reasons for remortgaging your property
- Depending on your individual circumstances, such as…
- Mortgage debt is fairly minor.
- Financial circumstances have changed.
- Early repayment charge that’s costly.
- A drop in the value of your home.
- Existing credit problems.
- Current rate is ideal.
- We will advise you whether to re-mortgage or not.
Buy to Let
A property purchased in order to be rented to tenants is a ‘buy to let’. According to the law, you cannot live in the property. 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.
- You may need to know certain things when purchasing a buy to let property.
- The loan amount you can borrow is mostly based on the total rental income you receive.
- Other than your regular stamp duty, you will have to pay an extra 3% stamp duty on top.
- You’ll still have to pay the extra 3% of the purchase price, even if the property isn’t valued as it should be for the stamp duty to be liable.
- TIP: You should ask your solicitor/conveyancer to figure out how much you must pay when considering 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?
Most mortgage brokers get paid commission from lenders, which will be a percentage of the mortgage loan you receive. While the figure varies widely, it is generally set at around 0.33%, depending on the type of mortgage you require. For example, this could be a residential mortgage or buy to let and would take into account whether you’ve had any credit troubles recently. 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. The should be totally transparent, disclosing the amount to be charged, as well as their available fee structure.
For our fee structure, we charge clients £695; any commission we receive from mortgage lenders is subtracted from that figure 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 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. In addition, they will perform a credit check to ensure your credit rating is sufficient for the purpose of a mortgage.
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. Make plans today for an appointment with one of our capable mortgage experts. 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
The list of happy clients in Newchapel is a lengthy and diverse one. If you doubt that we are the professionals most capable of finding you the best mortgage deal in Newchapel at the lowest price, check out what some of our customers have to say about their experience with us. Contact us today to get a first-hand experience of the excellent services we provide.
Latest Mortgage News
The more information you have to hand in your search for the ideal mortgage arrangement, the greater advantage you’ll have. 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. 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.
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 monitors the professional conduct of mortgage providers. Strict rules exist that monitor the use of dishonest and misleading adverts and promotions, checking to ensure the terms of any contract for financial services are fair to the customer. 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.
In terms of their financial conduct, organisations collecting deposits in the UK fall under the Prudential Regulation Authority, the FCA’s sister organisation. They make sure firms have a substantial level of capital to offset their lending risks.
For lodging complaints about your mortgage provider, the first step is to take it up with 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”.