mortgage broker

DIY Mortgages - Advice for those who don't want a Mortgage Adviser

This may seem like a strange post for a mortgage broker to be publishing but I’m going to give you a little DIY advice.

Due to the wonders of the world wide web, you no longer have to trawl the high street and talk to each bank and building society you can to find out who has the best mortgage deal.

There are loads of comparison sites you can access now, from the convenience of your sofa, and you’ll largely get to see the same deals that I can on my system (so why would you need me? Answer here).

How To Compare Mortgage Products

When inputting your details I would try and put as much information in as possible so the data returned is more accurate. Often on the comparison sites when the deals are shown there may be “sponsored” deals at the top. This is a bit like a Google search where the sponsored links are at the top of the page, so make sure you check the deals lower down to ensure you are getting the full picture.

Another thing to look out for are the fees. All the lowest interest rate deals on the market have lender arrangement fees; on average £999. Paying a fee isn’t necessarily always appropriate, depends on how much you are borrowing really.

Valuation fees usually are payable when you are purchasing a property, the amount is dependent on the value of the property so watch out for this as well.

Often overlooked are the cost of legal fees. This is mainly when you are seeking a remortgage. Many lenders offer “free legals” which basically means the lender will pick up the cost of a standard remortgage. In my experience the comparison sites are not very clear on this so often the deals that appear to be the cheapest might not include the costs of legal fees. This can be around £500 so it is often more cost effective to have a deal where the lender pays for this.

You need to be financially confident that you understand the jargon and you know your circumstances so you can narrow down the right deal. Ideally if you are confident then you can apply direct via a lender’s website thus bypassing the wait for their adviser to call you.

The lender will perform their own affordability calculation to establish if you can afford the mortgage so you’ll need to disclose all your financial information to them. As a rule you’ll need to give them details of what comes in (income) and what goes out; personal loans, credit cards, school/nursery fees etc. etc..

Make sure you are prepared to send in your paperwork. They may ask you to email or upload your documents to a secure portal. If this is the case it is probably best to have all your documents scanned in ready before you apply. You will need:

  • Copy of your Passport or Driving Licence

  • Address ID – utility bill or Mortgage Statement or Council Tax bill (not mobile phone bill)

  • Latest P60

  • Last 3 months payslips

  • Last 3 years accounts if self employed and last 3 years SA302 Tax Calculations with corresponding Tax Year Overviews (from HMRC Website)

  • Last 3 months personal bank statements

  • Evidence of Deposit/Savings

Once the application is underway the lender may come back and ask for more stuff, depending on how the credit score pans out, and some lenders also ask for clarification on items they see on your bank statements.

All in all it is about being confident that you can understand all the terminology and you have the time to complete the application yourself. It is certainly getting easier these days with all the technology.

The final thing to be aware of though is that if you decide to do it all yourself then you will not be deemed as having received advice. This means there is no comeback on the lender, you can’t have been mis-sold if you sold it to yourself.

You should also bear in mind that if your mortgage application is refused it can affect your credit score. This in turn may affect your ability to secure another mortgage product. Therefore it is important to make sure that your figures add up, you have all the documentation needed, and that you’re confident that your application should be straightforward. One of the advantages of using a mortgage broker or adviser, is that they’re expertise increases the chances of being offered a Mortgage Agreement in Principle and that also helps protect your credit score.

However I wouldn’t let these factors put you off, as I said it’s all about your own confidence to carry out the legwork.

If you decide it is not for you, you know where I am!

A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME OR PROPERTY. YOUR HOME OR PROPERTY  MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT. 

Buying a House and Moving before Christmas

If you’d like to wake up on Christmas morning in a new home, you need to act fast. December will be here before you know it, and you’ll want to be in your new property at least a couple of weeks before the 25th, so you can decorate the Christmas tree and put a wreath on your front door. Aside from the Christmas decorations, you’ll want time to turn your house into a home too.

Buying A House Fast

If you’ve decided your current home isn’t big enough, you fancy upgrading, moving to a new area or you’re buying your first home, you should dedicate some time to deciding what you want and don’t want from your new home. If you’re buying with someone else, compromise might be required. Having a clear search area, property type and budget, can stop you from wasting time looking at properties that aren’t suitable.

Make sure that you’re registered with local estate agents and that they know you want to move fast. If you’re also selling a property to enable your purchase, you’ll need to find a buyer who is equally as keen to get moving.

Get a mortgage offer quickly

Don’t wait until you’ve found the perfect property before booking an appointment with a mortgage broker. They’ll be able to offer your invaluable advice, answer any questions you have about the house buying and mortgage process, and provide you with a mortgage in principle.

A mortgage broker or adviser will look in detail at your finances and circumstances, asking a number of affordability questions, as it’s vital that you’ll be able to keep up with your mortgage payments, month in, month out, or you could end up losing your home.

They will then search the market for you to find the best mortgage deals, saving you valuable time. Many mortgage comparison sites don’t search all available lenders, and therefore won’t necessarily identify all mortgage products that are suitable for your needs. A broker has access to everyone and will spend the time stress testing each option and exploring alternatives. They’ll then go through the best deals with you, explaining how they each work, e.g. some may be fixed deals for 2 years, 3 years, or 5 deals, which are often ideal if you want to know exactly how much you’ll have to pay each month. If this isn’t something that matters to you, you may decide that a tracker mortgage is better.

Once you find a deal you like, your broker can put in an application, and you’ll receive a mortgage in principle letter. This means that you should be able to get a mortgage for a given amount; so can act as proof that you’re a serious buyer when you place an offer on a property.

From offer, to exchange, to completion

Placing an offer on a property is exciting, but until it’s accepted and the property is taken off the market you won’t be able to begin the conveyancing process. The conveyancing process is what happens when a property legally changes hands. Generally it takes around 6 weeks from instructing solicitors to exchange.

Your mortgage adviser will most likely be able to recommend several local solicitors, for a speedy purchase and / or it is best to get them lined up early so you can instruct as soon as your offer is accepted. They will also act on behalf of the mortgage lender (who is essentially buying the house for you, or at least part of it) and will need details of the mortgage offer to proceed.

The mortgage lender will send a surveyor to assess the property you want to buy, to confirm that the property is worth as much as you say it is. If it’s down valued, you might not be able to get the full amount you were hoping for. If this happens, your mortgage broker will explain the different options available to you, one of which will be to apply again this time with a different lender. Having an independent mortgage adviser to help you through this process, can take the pressure off and make it a lot less stressful than trying to do it yourself.

Once your mortgage has been approved, your broker will probably also recommend buildings insurance products – you need to have this in place from the date of exchange – but you do have the option to shop elsewhere for buildings cover if you choose. Your solicitor will arrange a date for exchange of contracts, and a completion date, which is the day you’ll get the keys to your new home. Once you know these dates, you’ll be able to begin packing up your belongings and book your removal company.

Need a mortgage broker?

Moving home can be stressful especially in the run up to Christmas, but if you have the right professionals in your corner, you should have as smooth a move as possible. If you need mortgage advice, or a general chat about your options for buying a property, please get in touch.

A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME OR PROPERTY. YOUR HOME OR PROPERTY  MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT. 

10 Questions to ask your Mortgage Adviser

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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