What is a mortgage broker
A mortgage broker acts as an intermediary who brokers mortgage loans on behalf of individuals or businesses. The job of a mortgage broker is to identify banks or direct lenders that would make the actual loan an individual seeks. Finding a good deal for a mortgage loan in West-Tarring will be easier if you work with a mortgage broker. The right broker will also improve your chances of getting a mortgage, even if you have a poor credit score or are subject to any other circumstances that could complicate your mortgage application.
Professional mortgage brokers are bound under strict regulations and required to comply with banking and finance laws in the customer’s jurisdiction, so, you don’t have to worry about being in the wrong hands.
What Is A Mortgage?
In simple terms, a mortgage is a loan. A mortgage is not like a personal loan, as it is specifically attached to a piece of property used as collateral against the loan. 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. While there are various mortgage options, the most popular one requires a monthly capital repayment plan.
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 time, the loan and interest included can be repaid by the borrower, before the property can become theirs 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.
The property can be repossessed by the lender if the home buyer fails to make mortgage payments, since the bank has a charge on the house. 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. 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. If market interest rates drop or increase, the borrower’s mortgage repayment remains the same if they are on a fixed rate.
At the end of the fixed rate, your mortgage would revert to a ‘standard variable rate’ put in place by the lender, bank or building society 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 may appear cheaper than it really is, because the initial interest rate is mostly a low rate. If interest rates rise later on, the monthly rates may become too high for the borrower to pay. Because the variable rates can change at any time, the monthly payments are unpredictable after the initial term.
Other types of mortgages exist that are not so common. However, they may be available to you, so talk to an independent broker about such options, which include offset mortgages, interest-only mortgages, buy to lets, secured loans, tracker rates and bridging loans. Our mortgage brokers in West-Tarring can help you find the most suitable mortgage deal to match your unique needs 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 just how much your mortgage repayments are going to be, dependent on your interest rate and full loan amount, using 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?
In West-Tarring, working with a mortgage broker on your mortgage application is beneficial in a number of ways. 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’ll just need to fill out some details and an experienced professional with your best interests in mind will deal with the hard work.
Some people are not fully convinced about this, what with the concept of a mortgage broker still vaguely understood universally. So, there has to be a catch somewhere, surely? Although such reservations are not entirely invalid, you should be aware that there is no benefit for mortgage brokers who do not work in your best interests.
If the broker cannot provide genuine reasons for recommending the mortgage they have (to you, their regulators, the Financial Conduct Authority or the Prudential Regulation Authority), then they could be in serious trouble. 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. Reputable mortgage brokers will usually inform you how they get paid for their services, as well as disclose the details of the entire cost of the loan. 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. Acting as your agent isn’t all they should do, but also problem solvers and knowledgeable consultants too. 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. Sophisticated solutions and innovative mortgages are distinct advantages of working with experienced broker, because simple 15 or 30-year mortgages aren’t enough in some situations. These include mortgages to raise capital for debt repayment, money for your children, important home renovations or even the purchase of other properties like buy to lets.
Has Flexibility Expertise to Meet Your Needs
The client will be under the direction of a mortgage broker, who will manage the process and handle any issues that could arise along the way. 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. Give a thought to the amount of time you’d have to invest when enquiring about various loan types from numerous lenders. You would only have to fill out one application form, instead of one for every lender you have to work with. A formal comparison of the loans recommended can be provided by your mortgage broker to act as a guide for the information that accurately illustrates the differences in cost, showing present rates and points, as well as closing costs for each loan. 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.
You don’t have to burden yourself with all the work, as outsourcing is a viable option to take in order to gain expert advice. A mortgage broker can 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. Some of these features can include drawdown facilities, offset accounts and options for extra repayments to name but a few. 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
Brokers have access to exclusive deals that aren’t advertised by the banks. The banks pass these deals on to the brokers, who are responsible for selling the 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.
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
Whenever you request an Agreement in principle / Decision in principle of a loan, this leaves a mark on your credit rating if you’re refused. Brokers are knowledgeable and have the much-needed experience to give you a better shot at approval the first time you apply.
Access to expert knowledge
Mortgage brokers assist people with obtaining loans as part of their job. They can access useful information and exclusive deals you likely couldn’t find yourself. There are small details accompanying loans that you might miss if you’re not looking for them. At the end of the day, these subtleties tend to improve your mortgage chances. Having the services of an experienced professional who can point these out for you is a huge benefit.
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. 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
Contrary to how they might seem initially, mortgages and insurance are not so difficult. That’s why finding honest advisers with invaluable experience and knowledge is so important. Our Mortgage Saving Experts will make your journey as seamless and transparent as possible. After all, why make everything more stressful than it ought to be? Let us make things easy for you and make sure we find you the most suitable deal.
Mortgage Saving Experts provide our clients with honest and transparent services that leave you feeling mortgages and insurance are less complicated than they first appear. All mortgage and insurance applications are handled like they’re our own at Mortgage Savings Experts. These are the things we’re about. No matter the circumstances – whether this is your first time buying, you’re a landlord, moving onto a new chapter or even re-mortgaging, Mortgage Saving Experts are here to help. Assisting you is the reason we’re here! Fundamentally “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. You’ll get to understand why you received the mortgage you did, because we have to justify the recommendations we make to both you and our regulators.
Down to Earth Mortgage
Our team of mortgage insurance experts is made up of honest, passionate, enthusiastic and widely experienced individuals.
Our mortgage insurance experts take pride in listening to the current and future objectives our customers have. We then work closely with you to achieve those goals.
Why chose Mortgage Saving Experts?
When you take out a mortgage, you’ll be subject to an initial rate for the first few years. After this initial rate finishes, the rate increases 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. Other advantages of working with us are:
- 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 take time to relax, while we handle the stress for you.
- This is our area of expertise; you’ll always receive advice from a qualified mortgage expert.
- 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. Our approach 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 West-Tarring includes:
- Understand your needs and circumstances via fact-finding.
- Point out the costs that come with buying and selling.
- Request all documents related to the application.
- Propose and explain the likely mortgage.
- Proffer replies to any questions you might have.
- An agreement in principle should be obtained.
- 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 advise expertly on a vast selection of mortgage products. In collaboration with our team, you won’t have any trouble finding the best mortgage products to match your specific requirements. 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.
The rules and ideas on this are different across various lenders. Typically, there are no problems with being a First Time Buyer. 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.
The mortgaging process might appear to be challenging, but this isn’t necessarily so. The prospect of buying your first home comes with a lot of excitement, so if you manage to find a competent broker who can oversee the process at a reasonable price, then go right ahead. Why you should use one is pretty 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. With mortgages, the same principle applies. You can save on time, effort and even money with mortgage brokers, so you should use one. The initial consultation comes at no cost at all.
Buying a home
You should brush up your knowledge of mortgages if a home purchase is a viable option for you any time soon (or a few years down the line). Get to know what to do before your mortgage application, during the application process itself and the way in which to use it after buying the property. If you can’t deal with all of that, talk to an adviser who will provide guidance accordingly.
Your credit is crucial.
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 be eligible for a mortgage, good credit is useful but not absolutely essential. We can also guide you with regards how much you can afford to pay for your new home and what should be your price ceiling, based on your current situation. We won’t just facilitate the purchase your dream home, we will also help you fund it with the lowest cost and most favourable mortgage deal on offer.
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 don’t automatically go hand in hand. I’ll explain this clearly. 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 may realise that it’s less expensive to go on a slightly higher rate than paying any lender an arrangement fee. 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. Pay close attention.
One upside to re-mortgaging is that your usually not required to pay for valuation or solicitors fees, although some people don’t qualify for this. Any reasoning depends solely on your circumstances at the time of re-mortgaging. So, do find out from your adviser.
A brilliant way to ensure you cut down on your mortgage bills is to re-mortgage on time. 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 relatively small.
- There have been significant changes in financial disposition.
- Significant early repayment charge.
- A drop in the value of your home.
- You’re dealing with credit problems.
- Already on a suitable current rate.
- We will provide guidance to help you choose whether to re-mortgage.
Buy to Let
A ‘buy to let’ property is one you want to purchase in order to rent out to tenants. Legally, you aren’t allowed to live in the property. If you’re a First Time Buyer, you can purchase a buy to let property, but the number of lenders available is restricted. There are also extra checks made by the lender in these circumstances.
- When purchasing a buy to let property, there are a few things you’ll need to know.
- The loan amount you can borrow is mostly based on the total rental income you receive.
- You’ll be required to pay a 3% stamp duty after your normal stamp duty.
- 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: If you’re looking to buy a second property, you should ask your solicitor/conveyancer to work out the amount you 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.
- To see if you’re eligible, reach out now to our advisers.
How Much Do Mortgage Brokers Charge?
Many mortgage brokers are paid commission from lenders, which represents a percentage of your mortgage loan. 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. The majority of independent brokers typically charge a flat fee of around £500. Be sure to enquire about how to make payments to brokers. 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 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?
This depends on several factors, such as the deposit value and how much you earn, how many children you have, as well as what debts (if any) you have in the background. How much a lender is willing to lend is based upon a full affordability assessment, whereby they will look to understand your income, as well as any loan or credit card commitments and regular essential household expenditure. Other than this, they will also carry out a credit check to ensure you have an agreeable credit rating for mortgage purposes.
To be sure of how much you can borrow, obtain a decision in principle, prior to completing a full application. Make plans to meet with one of our experienced mortgage experts now. We can at least give you an idea, without having to do any credit checks at the initial stage.
The Latest Best Mortgage Rates
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 thousands of the latest mortgage deals, so you can find the one you’re after.
What Our clients say About us
We have a list of clients in West-Tarring that is both lengthy and diverse. If you’re not yet persuaded that we are the experts who can get you the best mortgage deal in West-Tarring at the cheapest cost, see what some of our customers have got to say about working with us. Contact us today to get a first-hand experience of the excellent services we provide.
Latest Mortgage News
The more information available to you when trying to secure the best mortgage deal, the more advantages you’ll enjoy. To provide insight and help you get started, find recent news on mortgages below.
Mortgage Regulatory Information
In the UK, most mortgages are provided by building societies, specialised mortgage lenders and banks. 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.
Due to the Financial Services Act 2000, a regulatory scheme specifically for mortgages was implemented by the former Financial Services Authority (now the FCA), even though close regulations have always been in place to guide banks and building societies in the UK.
The professional services of mortgage providers are monitored by the FCA. There are stern rules that serve as a guide with regards using unfair, deceitful promotions and adverts, as well as checks for financial service contracts for consumers. Regulations were initially documented in the rules for Mortgage Conduct of Business (MCOB), but were overhauled because of the 2014 FCA Mortgage Market Review (MMR).
The Prudential Regulation Authority (a sister organisation to the FCA) presides over deposit-taking organisations in the UK, with regards their financial conduct. They make sure firms have a substantial level of capital to offset their lending risks.
Taking up the matter with your mortgage provider is the first step to take if you have any complaints about them. If you think it hasn’t been sorted out satisfactorily, you can take the complaint to the Financial Ombudsman Service if necessary. Some mortgages are not regulated by the Financial Conduct Authority such as moist Buy to Let mortgages and if you make a complaint about these you are unable to take these to the Financial Ombudsman Service
What To Ask Your Brighton Mortgage Broker?
This is a logical follow-up question. Again, insist on a specific reply.
And once you’ve received answers to these questions, ask if the broker would be willing to put both claims in writing. That will indicate how seriously those claims should be taken.
If a problem arises during the loan application process, you’ll want your broker to respond quickly – hence this question.
Again, demand a specific answer – “Within three hours”, say, rather than “Quickly”.
The reason for this question is so you can discover whether the broker will closely guide you through what is a complicated and stressful process – or expect you to figure it out for yourself.
Organising finance and purchasing property can be complicated and stressful, so you want to know you’re in safe hands. That’s why, before you settle on a particular broker, you should challenge the broker with this question.
Don’t let the broker get away with vague statements like “Because I’m the best” or “Because I provide great service”. Use follow-up questions to demand detail. “What specific things make you better than other brokers? What, specifically, do you do to deliver great service?”
Another important question to ask. That’s because while most brokers focus on ‘plain vanilla’ clients, others might focus on, say, sophisticated investors or borrowers with credit problems.
Hypothetically; Broker A might have done 450 vanilla loans and 50 bad-credit loans, while Broker B might have done 50 vanilla loans and 250 bad-credit loans. So if you were a borrower with credit problems, you might be better off with Broker B.
Next, probe them about their customer service standards
A great way to utilise the knowledge and experience of a broker is to get them to work out the true cost of your home loan. Based on whether you’re paying Repayment or interest only, how much of a deposit you have, the length of your loan term and the rates payable your broker will be able to obtain a mortgage illustration which will have the true cost on it. This is normally depicted by the Annual Percentage Rate (APR)
By maximising your deposit amount and minimising your loan term, you stand to significantly reduce the overall cost of your loan. However, there is much more to answering what the true cost of your home loan will be. Upfront fees such as valuation fees, conveyancing and legal fees need to be added to the total cost. Ongoing fees such as those you can incur for using a drawdown facility.
While it’s impossible to forecast the entire cost of your mortgage to the penny – and let’s not forget how life circumstances and changes can affect your ability to pay your loan too – a broker can can help clarify the big picture details. Mortgage Saving Experts can recommend any protection or insurances to protect you and your family to cover life unfortunate eventualities and our team of advisers can use this information to help you decide which loan is best for your circumstances.
The big question plaguing home buyers tends to be, ‘how much can I borrow?’ Each lender is massively different in this area so as a maximum depending on many factors. In the majority of cases, you can borrow up to around 5 times your gross annual salary but in some instances, you may borrow up to 5.5 times your gross annual income
Once you speak to us, however, we’ll be able to give you a much more accurate indication of your borrowing capacity. Brokers act as the go-between for you and the lender. Lenders will need to know your living expenses, debts, credit score and whether you have dependents. A broker can factor all these things into the right loan.
A broker can also explain home loan terms you’ll need to know, such as LTV, which is the initialism for Loan-to-Value and refers to the percentage of the total loan amount you seek to borrow as a percentage of the property purchase price or value. They can also explain things like the differences in interest rates and repayment types such as Interest Only and Repayment (Capital & Interest)
This is a good follow-up question to ask, as it will give you a better understanding of the mortgage broker’s experience.
For example, imagine two brokers joined the industry in 2013, but that Broker A had written 500 loans during that time and Broker B had written 300. In that case, even though both parties would be able to claim five years of industry experience, there would be a clear difference in hands-on experience.
This is a good place to start, because a more experienced broker will generally be more knowledgeable than a less experienced broker.
Press the broker to give you a specific answer, such as “Eighteen years” or “I’ve been a broker since 2007 and in the mortgage industry since 2001”, rather than something vague like “I’ve got a lot of experience”.