Whether you’re buying your first property or your fifth, it’s a good idea to chat with a mortgage advisor about your situation and the best type of mortgage products for you.
Of course, you can search for a mortgage deal yourself, perhaps by visiting your own bank and or searching online. However this method may not get you the best mortgage deals as your bank will only recommend their own products, and online comparison sites don’t include every deal available.
An independent mortgage broker or mortgage advisor has access to both the high street banks and building societies, and less well-known mortgage lenders. They also have specialist expertise in this area and therefore can often save you money by getting the best deal for your individual circumstances.
If you’re thinking about engaging a mortgage broker to look after that aspect of your property purchase, here are 10 questions to ask them.
Mortgage Broker / Advisor FAQ
1.How do you charge for your services?
Mortgage brokers and advisors typically charge a fee, work on commission or a combination of both. Some mortgage advisors will charge a fee for arranging your first mortgage and then will arrange subsequent mortgages for free. Any money you do have to pay will be nominal when you consider how much you’ll save long term.
2. Are you able to cover the whole mortgage market?
Some mortgage advisors will, others only work with a select number of lenders. To get a good deal, you’re best choosing a mortgage advisor who covers all the major lenders as well as the smaller ones. If you’re still tempted to go it alone it’s worth noting that some lenders, such as The Mortgage Works, will only work with mortgage advisors and you won’t be able to get a deal direct.
3. Are you authorised by the FCA?
You want your chosen mortgage advisor to be suitably qualified and authorised by the Financial Conduct Authority. This is your protection from poor advice or mis-selling. To see if they are, you can search the financial services register >
4. What are the different types of mortgages available to me?
If you’ve never had a mortgage before, or have opted for the same type of mortgage time and time again, you may want your mortgage advisor to explain what the pros and cons of fixed rate, standard variable rate, tracker and the other types of mortgages are. They can advise which might be best for your particular circumstances but you’ll have to make the final decision.
5. Can you give advice about other things?
Mortgage brokers are financial advisors, so they are qualified to advise on related financial matters. Insurance is a key area that’s closely related to mortgages so if you need advice on life insurance, mortgage life insurance (find out the difference between these here), income protection and other insurance products, it’s worth speaking to your mortgage broker about these too.
6. How much of a deposit will I need?
The bigger your deposit, the better the deals your mortgage advisor will be able to find you. You need to know roughly how much you can put down as a deposit before your first meeting together. There’s little point telling your mortgage advisor that you can put down 40% of the purchase price only to backtrack later and admit you can only put down 20%.
7. How much can I/we borrow?
Your mortgage advisor will ask you a lot of questions and run through affordability checks before they tell you how much you could potentially borrow. It’s important that your credit score is good and it’s always advisable that you hold off from applying for any form of credit in the months leading up to your first meeting/applying for a mortgage.
If you aren’t able to borrow as much as you would like, you could choose to go away and save a bigger deposit or adjust your property search criteria accordingly. Remember, you can’t use a credit card or loan to cover your deposit, lenders simple won’t allow this, so savings and windfalls are the only way.
8. How much is the mortgage arrangement fee?
Lenders charge mortgage arrangement fees which can be up to £2000 but on average are £1000. You can choose to pay it straight away or add it onto your mortgage, the choice is yours. If you can afford to pay it straight away, you won’t end up paying interest on it. There are other costs too, such as mortgage valuation fees, surveys, and sometimes mortgage account fees and booking fees.
9. How much will I have to pay each month?
Depending on the type of mortgage you choose you might know exactly how much is going to come out each month (with a fixed mortgage) or it might vary depending on the interest rate and other factors. If you’re on a fixed deal for a set number of years, you need to be aware that the amount you pay is likely to go up once the deal ends, which is why many people decide to remortgage and find another deal when this happens.
10. How long should it take to arrange my mortgage?
This can vary considerably as it depends on how quickly you can get the documents needed, how quickly your mortgage broker does what’s required of them (super fast in my case!), and how long it takes your lender to approve you and the property you intend to buy.
If you’re wanting to put an offer on a house, your mortgage broker can give you a document stating that you’ve got an offer in principle from a lender, which shows estate agents that you’re a serious buyer.
Ready to take the next step and start looking for a mortgage? Contact me so you can quiz me on the above questions! Call 01252 759233 or email info@thesurreymortgagebroker.co.uk