Although purchasing a house isn’t on the cards for everyone, it’s safe to assume that the majority of people in your life probably own a home or plan to own a home in the future. And unless they have got a very large sum of money sitting in their bank, they probably took out a mortgage.
When you start thinking about a mortgage, one of the first decisions you need to make is whether to use a mortgage advisor and broker or just go directly to lenders yourself. There’s a reason that people pay a mortgage advisor and broker to handle the mortgage process – it can be tricky to do alone.
Before you do any of this, however, it is important to check the affordability, and you can do this by looking at the a resource like Simon Conn journey loan-to-value calculator (this one is particularly useful if you are looking to buy a property abroad).
So, what are the other benefits to using a mortgage advisor and broker when taking out, or making changes to your mortgage?
What is a mortgage advisor and broker?
Let’s start with the basics. A qualified mortgage advisor and broker specialises in mortgages, with an in-depth understanding of the market and all the different lenders within it. People enlist a mortgage advisor and broker’s services so that they can get the best deal to suit their budget and circumstances.
A mortgage advisor and broker will look at your deposit, your monthly repayment preferences and personal information such as your income, outgoings and credit history. From there, they will go away and find a good mortgage deal for you.
Pros to using a mortgage advisor and broker
First and foremost, using a mortgage advisor and broker just makes your life easier. When you buy and/or sell a house, there’s a lot to arrange. Why throw sorting out your mortgage into the mix when you could get an expert to do it for you? An advisor and broker will find you the right mortgage deal, complete the paperwork for your mortgage application and track it’s progress. It’s one less thing to think about in a busy, often stressful time.
Secondly, the mortgage market can be a pretty complex place, unless you are an expert. A good mortgage broker will hold your hand and guide you through the entire process, explaining the jargon as they go. You should come out the otherside armed with more knowledge and experience to see you through to the next stage of your mortgage.
Plus, using a mortgage advisor and broker means that you’ll never get tied into any unsuitable deals. They also may have access to deals that may not be available to you if you went straight to a lender. Also, the last thing you need is to apply to the wrong sort of deal for you or the wrong sort of lender and get rejected. This often shows on your credit report and can be a bit of a red flag for future lenders that you approach.
Cons of using a mortgage advisor and broker
Although the disadvantages are very few, there are a few things worth mentioning. Firstly, a mortgage advisor and broker rarely comes for free. You may find an advisor and broker who takes their fee as commission from the lender, therefore costing you nothing, however this means that they may be tied to certain lenders so will only advise on mortgages from that particular lender. This means that you won’t get a bigger picture of the market, and you won’t get to take advantage of all the deals possibly available to you.
If this bothers you, you may want to use an independent broker. Otherwise known as ‘whole-of-market’ brokers, independent brokers scan the entire mortgage market to find the best product for you. They will also charge you directly for their services. This is usually a reasonable fee, commonly around £300-600. They should always let you know what this cost is up front before you take them on, so that you can agree and factor this into your overall budget.
Let’s face it, most people won’t find arranging a mortgage much fun. It can be a bit of a headache. If you ask me, the comfort of knowing your mortgage will be handled by someone who knows exactly what they are doing is so worth it.