What is a mortgage broker
Mortgage loans are brokered on behalf of companies and individuals by mortgage brokers, who effectively act as intermediaries. The job of a mortgage broker is to identify banks or direct lenders that would make the actual loan an individual seeks. With a mortgage broker in Petworth, you’ll have an easier time procuring the mortgage loan you need at the best possible terms. 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.
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. 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.
In essence, mortgages have a set duration – mostly 25 years – although there are shorter or longer terms available. A repayment plan is set up as soon as you’re granted permission to borrow the money. Even though the available mortgage plans vary, those that involve repayment plans on a monthly capital basis are very popular.
Aside from repaying the money you borrowed initially, you will be charged interest on the amount you’ve been loaned (the ‘capital’). A mortgage – secured by the collateral of the property involved – is a debt instrument that the borrower must repay against the agreed pre-set payment instalments. Mortgages are a vehicle for individuals and businesses to make large property purchases, without paying the entire value of the purchase up front. The loan and interest attached needs to be paid back over some years before the borrower can own the property without a mortgage. Failure to make mortgage payments can result in the lender taking back the property used as collateral for the mortgage.
Should there be a default on mortgage payments, the lender can take back the property, as the bank will have a charge on 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.
Mortgages come in many forms. Even though there are longer fixed rate mortgage terms available, the borrower would have to pay the same interest rate for the initial terms of two, three or five years. For fixed rate terms, the monthly payments remain the same throughout. The borrower’s payments will not change on a fixed rate, even though the market interest rates increase. An increase or decrease in the market interest rate will not affect the borrower’s mortgage repayments if they have a fixed rate.
When the fixed rate is over, your mortgage return to a ‘standard variable rate’, which is usually set by the bank or lender from whom you borrow 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. Higher monthly payments may be hard to meet for the borrower if interest rates are increased later. Because the variable rates can change at any time, the monthly payments are unpredictable after the initial term.
Talk to an independent broker about other types of mortgages that could be options for you, such as buy to lets, interest-only mortgages, secured loans, bridging loans, offset mortgages and tracker rates, which are not so common. You can receive assistance from our mortgage brokers in Petworth to find a mortgage deal that best matches your individual specifications and circumstances.
Handy Tools and Calculators
You can easily plan your future once you have an idea of the maximum you can borrow and how much the loan will cost. 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 on your mortgage application with a mortgage broker in Petworth comes with many different benefits. Of these benefits, some of the most evident include:
The most visible benefit of choosing to work with a mortgage broker is that you will likely save money. You only need to provide a few details, before an experienced professional committed to protecting your interests handles the hard work.
Some people worry about how true this is, considering the entire idea of mortgage brokers is still misunderstood somewhat around the globe. So, where is the catch? 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 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. 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
Your interests – and not those of the lending institution – will be represented by the mortgage broker. They shouldn’t just play the role of your agent, but also those of problem solver and knowledgeable consultant. With access to a wide range of mortgage products, a broker can offer you the greatest value in terms of interest rates, repayment amounts, and loan products. 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
Any problems that may arise can be dealt with by a mortgage broker, who will oversee the whole process, guiding the client through any situation along the way. If a borrower has credit issues for instance, the broker would know about lenders who have the best products available to meet their 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
Money isn’t the only consideration. 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 only need to complete one application with a mortgage broker, instead of filling out forms for every individual 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. 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 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. Drawdown facilities, offset accounts and extra repayments (to name a few) are just some of the features involved. Features like these can make a huge difference to your mortgage costs and overall experience. 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
Brokers have access to exclusive deals that aren’t advertised by the banks. The deals are pushed by the banks on to the brokers, who are then charged with overseeing the sale of products. Talking to a broker can release these extra perks, which you’d otherwise not enjoy by contacting the bank yourself.
Brokers can search the whole market for the finest deal, whereas individual banks can only offer their own deals and not those of other banks.
Better chance of pre-approval success
If you’re knocked back after requesting an Agreement in principle/Decision in principle of a loan, this will leave a mark against your credit rating. You’ll need the necessary knowledge and experience a broker has to secure approval on your first attempt.
Access to expert knowledge
A mortgage broker’s job is to help people obtain loans. Helpful information and exclusive deals you won’t find yourself are accessible to them. If you’re not on the lookout for them, you might not notice the subtleties that accompany loans. In the long run, subtleties like these are significant to your mortgage. It is a huge plus to have the services of an experienced expert to show these things to you.
You can avoid spending valuable time to research numerous loans and lenders (while perhaps missing fundamental key subtleties) and instead give the work to someone with key industry experience. Just as you would contact a plumber for a leaking pipe or a hairdresser to replenish damaged hair, a mortgage broker is an excellent choice for all your home loan needs.
About Mortgage Saving Experts
Mortgages and insurance are not as complex as they seem at first. Finding an adviser who is reliable, knowledgeable and has significant experience is very important for this reason. 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.
Mortgage Saving Experts offer honest and transparent services to our customers, making them feel that mortgages and insurance are not as problematic as they first appear. 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’re here to help! Basically “Find out about 1000s of mortgage deals by putting 15 minutes aside to talk to 1 adviser.”
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, enthusiastic and passionate team of mortgage insurance experts, with years of industry experience.
Our mortgage and insurance experts pride themselves on listening to what your current and future objectives are. To achieve these objectives, we will then work hand in hand with you.
Why chose Mortgage Saving Experts?
For the first few years after taking out a mortgage, you’ll be subject to an initial rate. At the end of this initial rate, this returns to the lender’s variable rate. Before your monthly payment and rate are increased, our team will reach contact you to arrange a new deal roughly three months prior to the date of renewal. Here are some of the other advantages you’ll enjoy if you work with us:
- The deal you’ll get is better than the bank variable rate, which in turn saves you money.
- You won’t have to remember when the deal is due to end, as we will do this for you.
- While we deal with the stress on your behalf, you can sit back and ease your mind.
- We know our business, so you’ll only be advised by qualified mortgage experts.
- We compare thousands of deals, so can advise you accordingly and arrange the very best.
- You’ll receive expert advice and support throughout the entire mortgage process.
Our Approach to Mortgage Advice
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 differentiates our services from those of other mortgage brokers in Petworth includes:
- Learn about your situation and needs via fact-finding.
- Clarify the costs related to buying and selling.
- Request applicable documents to aid 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.
- Have your entire mortgage application sent in.
- 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. The most popular mortgage types we’re requested to handle include:
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. Normally, being a First Time Buyer is no issue. 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. 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. Why you should use one is pretty obvious. It stands to reason that you would contact a mechanic if your car became faulty – especially if you knew little or nothing about cars. The same applies to mortgages. Mortgage brokers can help you save money, time and effort, so why don’t you 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. 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 avoid any stress, speak to an adviser, who will guide you accordingly.
Your credit is important.
A mortgage is of major importance. Banks risk a large amount of money and have been steadily more careful since the subprime mortgage crisis in 2008. To qualify for a mortgage, good credit is helpful, but not essential. 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. Helping you buy your dream home is not all we do; we will also help you finance it with the lowest cost and most beneficial mortgage deal available.
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. The two do not necessarily go hand in hand. Let me clarify this. 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. Focus on any small print.
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 it is dependent on your circumstances alone at the time of re-mortgaging. So please check or ask your adviser.
A brilliant way to ensure you cut down on your mortgage bills is to re-mortgage on time. While a re-mortgage deal can be beneficial for some, it’s not the best move for everyone, as it all depends on your unique circumstances.
Reasons for remortgaging your property
- Depending on your unique needs, like…
- Mortgage debt is fairly minor.
- There has been a change in financial circumstances.
- Significant early repayment charge.
- A reduction in home value.
- You have credit issues.
- Current rate is ideal.
- We will provide guidance to help you choose whether to 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 purchasing a buy to let as a First Time Buyer, the number of lenders available will be restricted and there will be extra checks carried out by the lender in such cases.
- 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 mostly based on the total rental income you receive.
- You will have to pay 3% stamp in addition to your normal stamp duty.
- If the value of the property isn’t valued at the amount for which stamp duty becomes liable, you are still required to pay the extra 3% of purchase cost.
- TIP: If you’re purchasing a second property, ask your conveyancer/solicitor about the figure you’ll have to pay.
- To help determine the most suitable mortgage to meet your needs, an expert mortgage adviser will know the specific questions to which you will need to provide answers.
- Contact our advisers to find out whether you’re eligible.
How Much Do Mortgage Brokers Charge?
The majority of mortgage brokers receive commission from lenders, which is a percentage of the mortgage loan you secure. 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. 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.
For our fee structure, we charge clients £695; any commission we receive from mortgage lenders is subtracted from that figure 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 example, if we received a commission of £495, we would then ask you for a fee of £200 which is payable on production of your mortgage offer, so we are only paid on results.
How Much Can I Borrow?
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. 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. Other than this, they will also carry out a credit check to ensure you have an agreeable credit rating for mortgage purposes.
To get an idea of the amount you can loan, get a decision in principle before applying for a mortgage in full. Make plans today for an appointment with one of our capable mortgage experts. At the initial stage, we can give you an estimate, without needing to perform any credit checks.
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 thousands of the latest mortgage deals to help you find exactly what you need.
What Our clients say About us
In Petworth, we have long and diverse list of satisfied clients. If you still have doubts about our ability to professionally provide the best deal in Petworth at the cheapest price, see for yourself what some of our customers have said about their experience with us. Contact us today to get a first-hand experience of the excellent services we provide.
Latest Mortgage News
Having more information at your disposal when looking for the most ideal mortgage deal places you in a more advantageous position. 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. All in all, there are 200 different financial institutions offering mortgages in Britain, although Lloyds Banking Group and Nationwide Building Society have the largest share of the market.
Although banks and building societies have always been closely regulated in the UK, the former Financial Services Authority (now the FCA) implemented a regulatory scheme specifically for mortgages as a result of the Financial Services Act of 2000.
The professional services of mortgage providers are monitored by the FCA. There are strict rules regarding the use of unfair, misleading adverts and promotions, as well as checks to make sure the terms of any contract for financial services are fair for the consumer. Regulations were formerly presented in the rules for Mortgage Conduct of Business (MCOB), although they were changed due to the FCA Mortgage Conduct of Business (MMR) of 2014.
Deposit-taking organisations in the UK are under the jurisdiction of the Prudential Regulation Authority (a sister organisation to the FCA) for their financial conduct. They ensure firms have a sizeable enough capital to balance out their lending risks.
If you have a complaint about your mortgage provider, the first step is to take up the matter with them. If you feel it hasn’t been dealt with to your complete satisfaction, there is a complaints procedure which can be 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”.