In this age of economic uncertainty making big financial decisions such as taking on a mortgage requires extensive research and informed decision making.
If you have tried to find the the right mortgage without a mortgage broker you will know how daunting it can be. You have to find the best rate, which is never easy, the right mortgage to suit your circumstances, a trusted provider, the list goes on.
Mortgages with low rates usually have higher arrangement fees, thus making them un-competitive for people with relatively modest loans and there are so many to choose from.
To get the best advice and the right deal for you, using a mortgage broker is often the best route. A broker differs from other advisors or agents that work with high street banks. Advisors that work for a particular bank will only be able to provide information about their product while mortgage brokers will be able to recommend deals from across the market.
However, this does not mean you should use anyone who comes your way. Mortgage brokers come in different shapes and sizes. While the most reliable will cover the entire mortgage market, some may be ‘multi-tied’, implying that they work with a limited number of lenders. Most say that they cover all the major mortgage lenders, however these lenders may not necessarily provide the best rate for your particular circumstances.
So how do you choose the right broker and mortgage? We’ve collected the 7 most important questions you should ask a any mortgage broker when you are looking to find the best deal for you;
1. How many lenders do you have on your panel?
Most mortgage brokers operating in the market today have access to around 15-20 lenders, however being Directly Authorised means that we have access to the “whole of market” meaning that we have access to 70 or more lenders so can offer a wider range of mortgage products to our clients.
2. How much do you charge for your services?
The amount that a mortgage broker will charge in fees will depend on the clients needs and circumstances. Most mortgage brokers will charge a fee, some will not and this will reflect the level of service provided. Chances are that brokers not charging a fee will not have access to the “whole of market” and will have a very limited panel of lenders to choose from.
3. How long have you been in the industry?
The amount of time that a mortgage broker has spent in the industry directly reflects their experience. At A Move we have over 18 years of experience in providing an excellent service to our clients.
4. What are the mortgage rates currently?
The mortgage broker should explain that mortgage rates fluctuate with different lenders on a daily basis. There is no set rate that a broker can give out as it also depends on the clients’ circumstances and position, only after an initial consultation to gather the necessary information, and after some proprietary research has been carried out should a broker provide a rate.
5. Can I afford a mortgage?
Affordability is the main factor in securing a mortgage, a broker will need to gather as much information as possible in connection with your income, expenditure, financial commitments, lifestyle and credit rating to determine if and how much you can afford to borrow.
6. Am I able to transfer my existing mortgage?
This is called porting a mortgage. A typical example would be if you’re upsizing to a bigger home, you could port your existing mortgage to your new property and top up the additional amount to the existing mortgage; the top up amount rate may differ from the original mortgage loan.
7. How much deposit will I need?
The amount of deposit you will need will depend on the value of the property you’re looking to purchase. The broker will need to carry out a similar process to the affordability check in question 5 to ascertain how much of a mortgage you can afford so you can look at properties in a certain price range. Don’t forget, the lower the Loan-to-Value, the lower the interest rate however typically 10% deposit will be required.