What is a mortgage broker
A mortgage broker acts as an intermediary who brokers mortgage loans on behalf of individuals or businesses. The purpose of mortgage brokers is to look for banks or direct lenders that will willingly provide the specific loan an individual would need. You’ll have a stress-free time getting a great deal on the mortgage you need in Dunsfold if you work with a mortgage broker. If you work with a reputable mortgage broker and have a poor credit score or any other issues that could affect your mortgage application, your chances would be greatly improved.
Also, you can rest easy knowing that professional mortgage brokers must work within regulations that require their compliance to banking and finance laws in the jurisdiction of the consumer.
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. Mortgage providers can rightfully take back (repossess) the property if you default on your payments.
While shorter or longer terms are available, mortgages are usually set for a 25-year period. Once you’ve borrowed the money, a repayment plan is then set in place. Although mortgages which involve monthly capital repayment plans are more common, there are also other types of mortgage available.
In addition to repaying the original loan (the ‘capital’), you’ll also have to pay interest on top. 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. Individuals and businesses use mortgages to buy property, without having to pay the total value 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 property the mortgage is secured on can be taken back by the lender if the borrower discontinues mortgage payments.
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. The bank can evict the tenants, sell the property and use the income to pay off the mortgage debt if there is a repossession.
There are many forms of mortgages. With a fixed rate mortgage, the borrower pays the same interest rate for an initial term (i.e. two, three or five years), although longer fixed rate terms are available. During the fixed rate term, monthly payments remain the same. 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. The rate can increase or decrease as the lender decides, so with a good broker or diary system in place, do not forget to re-mortgage or call your existing lender, so you can adjust the rate sometime around three months before it’s increased to the variable rate. This will help you avoid paying higher monthly payments.
A mortgage may appear cheaper than it really is, because the initial interest rate is mostly a low rate. The borrower might not be able to keep up with higher monthly payments, should the rates be later increased. Because the variable rates can change at any time, the monthly payments are unpredictable after the initial term.
There are other types of mortgages, such as interest-only mortgages, offset mortgages, tracker rates, bridging loans, secured loans and buy to lets, which are less common but may be available nevertheless. Therefore, you should contact an independent broker to know your options. Our mortgage brokers in Dunsfold can help you find the most suitable mortgage deal to match your unique needs 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. To immediately determine how much you’ll have to repay each month, simply enter the values and your term before pressing ‘Click to calculate’.
Why Use A Mortgage Broker?
Working on your mortgage application with a mortgage broker in Dunsfold comes with many different benefits. Of these advantages, some of the more prominent include:
Of all the benefits working with a mortgage broker provides, the possibility of cutting costs would be the most obvious. You only need to provide a few details, before an experienced professional committed to protecting your interests handles the hard work.
Some people are sceptical about this – especially with the concept of a mortgage broker not yet universally understood. There must be a catch somewhere, surely? 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 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. There are various inexpensive, exclusive mortgage deals that a number of mortgage brokers can find for their clients that could possibly reduce the total loan cost. A reputable mortgage broker will disclose details of how they take payment for their services and convey the components which make up the entire mortgage cost. 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
A mortgage broker will work towards protecting your interests, rather than those of the lending institution. They should act not only as your agent, but also as a knowledgeable consultant and problem solver. A broker can offer the best value when it comes to repayment amounts, interest rates and loan products. This is because a large variety of mortgage products are accessible to them. You will be interviewed by the mortgage brokers to determine your needs and goals – both in the short and long term. 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 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. If a borrower has credit issues for instance, the broker would know about lenders who have the best products available to meet their needs. 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. Your time and sanity are just as important as saving some extra money. Think of the amount of time you’d spend researching multiple loan types from multiple lenders. You’d be required to fill out just one application with a mortgage broker, unlike completing one for every different lender. A formal comparison of the recommended loans can be made available by your broker to provide information that would clearly show the differences in cost, including current rates and the costs of closing each of the loans. Major lenders and those not so popular will be compared by your broker to seek out the most suitable deal for you, in terms of lower rates and total cost.
By outsourcing, you can reduce the workload and get someone else’s professional advice. A mortgage broker can do a lot of the work by providing you with support throughout the application and approval process. This might involve completing all paperwork, helping you with applications to government schemes, answering questions and explaining the options and loan features, about which you may not have been aware. A few of the features may include options to make extra repayments, as well as drawdown facilities and offset accounts. These types of features can make a significant difference to your mortgage cost and experience. In fact, if you don’t know so much about these concepts and the effects they could have, you can find clarification and get answers to any questions you may have during 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. Contacting a broker will unlock these extra benefits you would miss out on if you were to approach 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
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
Mortgage brokers help people secure loans for a living. They can access useful information and exclusive deals you likely couldn’t find yourself. If you’re not on the lookout for them, you might not notice the subtleties that accompany loans. It’s these subtleties that can make a difference to your mortgage in the long haul. It is a huge plus to have the services of an experienced expert to show these things to you.
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 are not as complicated as they might first seem. This is why it’s very important to find honest advisers, who are knowledgeable and experienced. Our Mortgage Saving Experts will make your journey as seamless and transparent as possible. Why make things harder 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. At Mortgage Saving Experts, we treat each mortgage and insurance application as if it were our own. This is what we do. Mortgage Saving Experts are available whether you’re a first-time buyer, a landlord, moving on to a new phase or just re-mortgaging. We’re here to help! In essence “Search up to a thousand mortgage deals by talking to an adviser for roughly 15 minutes.”
Our Team of Brighton Mortgage Experts
As we are bound by regulations of the Financial Conduct Authority (FCA), we must ensure we get you the best available deal on the market. We must justify to our customers and regulators why we make the mortgage recommendations we do, so you know just why you have that mortgage.
Down to Earth Mortgage
We are an honest team of mortgage insurance experts, who are enthusiastic, passionate and widely experienced.
Our mortgage and insurance experts will pay attention to you and understand all your current and future objectives. 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. Three months before you’re due to renew, our team will reach out to secure a new deal before your monthly payments and rate increase. Included below are the plus points of working with us:
- You’ll save some money, as the deal you get is better than the bank variable rate.
- You won’t have to remember when the deal is due to end, as we will do this for you.
- We can take care of the hard work for you while you relax.
- This is our area of expertise; you’ll always receive advice from a qualified mortgage expert.
- We compare, advise and arrange the best mortgage for you from thousands of available deals.
- For the entire mortgage process, you will be expertly advised and supported.
Our Approach to Mortgage Advice
We offer a personalised service that takes into consideration 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 Dunsfold includes:
- Understand your needs and circumstances via fact-finding.
- Explain what costs buying and selling involve.
- Request applicable documents to aid the application.
- Recommend and explain the prospective mortgage.
- Reply to any questions you have.
- Get an agreement in principle.
- Send in your entire mortgage application.
- Communicate with your solicitor, mortgage lender and estate agent to respond to any questions through to completion.
Mortgage Types We Provide Expert Advice On
We dispense expert advice on a wide range 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
Most mortgage lenders Categorise First Time Buyers 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.
For each lender, the rules and ideas about this differ. Typically, there are no problems with 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.
Mortgage processes may look tough to negotiate, but they really don’t need 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 reason you should use one is quite apparent. After all, if you don’t know a thing about cars and yours breaks down, you would rather call a mechanic than fix it yourself. It’s the same with mortgages. With mortgage brokers, you can cut down on money, effort and time, 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. Learn what to do when applying, within the application process and even how to use a mortgage after buying your home. If you would rather avoid any stress, speak to an adviser, who will guide you accordingly.
Your credit is of great importance.
A mortgage is a serious affair. Since the subprime mortgage crisis in 2008, banks have trodden more carefully in terms of risking money up front. For mortgage eligibility, good credit helps, but isn’t vital. 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. 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
In short, this means you’ll switch from one lender to another to get a more affordable rate or cheaper deal. They don’t always sit well together. Let me explain. 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. You may realise that it’s less expensive to go on a slightly higher rate than paying any lender an arrangement fee. It’s always best to speak with someone before deciding which deal to go for, as you don’t want to be caught out by being tied to a more expensive deal overall, even if the rate is much lower. Take extra caution.
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 it is dependent on your circumstances alone at the time of re-mortgaging. So, please make enquiries with your adviser.
A brilliant way to ensure you cut down on your mortgage bills is to 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
- Based on your individual circumstances, like…
- Mortgage debt is relatively small.
- The financial disposition is now different.
- Early repayment charge is on the high side.
- A drop in the value of your home.
- You have credit problems.
- Present rate is very agreeable.
- We will advise you whether or not to pursue a re-mortgage.
Buy to Let
‘Buy to let’ properties are those you wish to purchase and then rent to tenants. Legally, you aren’t allowed to live in the property. If you’re a First Time Buyer, the number of available lenders will be restricted if you’re purchasing a buy to let, while extra checks would be carried out by the lender in such cases.
- 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.
- You’ll have to pay an extra 3% stamp duty on top of your normal stamp duty.
- Even if the value of the property isn’t enough to be liable for stamp duty, you are still required to pay an extra 3% of the purchase price.
- TIP: If you’re purchasing a second property, ask your conveyancer/solicitor about the figure you’ll have to pay.
- To find the best mortgage to match your requirements, a good adviser will know which questions you need to answer.
- To find out if you qualify, contact our advisers today.
How Much Do Mortgage Brokers Charge?
Commission is usually paid to mortgage brokers by lenders; this will be a percentage of the mortgage loan you secure. This is often about 0.33%, even though it largely varies, based on your mortgage needs. For example, a residential mortgage or buy to let and if you’ve had any credit issues recently. A flat fee of roughly £500 is usually charged by the majority of independent brokers. Remember to ask brokers how they want to be paid. The should be totally transparent, disclosing the amount to be charged, as well as their available fee structure.
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. 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?
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. What determines the amount a lender will agree to lend is a full affordability assessment. This will help them understand your loan or credit commitments, as well as income and everyday household expenses. A credit check will be undertaken for mortgage purposes to confirm you have sufficient credit rating.
Get a decision in principle before you finish your mortgage application; this way, you can form a clearer idea with regards the amount you can borrow. Make plans to meet with one of our experienced mortgage experts now. We can provide an initial estimate, without the need for any credit checks to begin with.
The Latest Best Mortgage Rates
Whether you want a re-mortgage, move home, find a mortgage for a first-time buyer or purchase a buy to let, we can help. 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 Dunsfold that is both lengthy and diverse. If you still have doubts about our ability to professionally provide the best deal in Dunsfold 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 you have to hand in your search for the ideal mortgage arrangement, the greater advantage you’ll have. To help you begin on the right path, find recent insightful mortgage news below.
Mortgage Regulatory Information
Building societies, specialised mortgage lenders and banks provide the most mortgages across the UK. There is a total of 200 different financial institutions which offer mortgages in Britain, although Lloyds Banking Group and Nationwide Building Society owns the market’s largest share.
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 are in place against using false or unfair adverts and promotions, in addition to checks to ensure the terms of contracts for financial services are fair for the consumer. 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 don’t like how the issue has been dealt with, you can take your complaint 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”.