The mortgage market has suddenly become incredibly competitive again, and it can be hard to understand what exactly is on offer.
From the many different providers to the extensive range of products and rates available, there are choices to be made. Getting those choices wrong could mean serious financial consequences.
You could of course simply go to an online comparison site and pick a mortgage product that appears to offer the best deal, but can you really trust an automated list, with what is probably the biggest financial decision you will ever make?
To get the best mortgage deal, you need a broker.
What a broker does
A Mortgage Broker can give you an expert guide to all the mortgages on the market – not just those featured on a particular website.
Just as important, he or she can help you find the mortgage that’s right for you. Comparison sites might be able to help you find the best deal on home insurance – but getting the right mortgage is not as simple as just opting for the cheapest fixed or tracker rate and hoping everything else works out.
Your circumstances are unique. You may have particular needs or financial advantages that the automated systems of comparison sites simply can’t pick up on.
Mortgage Brokers have to be qualified to give you mortgage advice – which means protection for you if things go wrong, and you are sold a mortgage that turns out to not be what you really needed. They aren’t on the lender’s side, they’re on yours. You get unbiased advice and you can have access to every lender and mortgage product available, rather than being restricted to the single range of the lender you go to.
Out of the ordinary lending
Mortgage brokers are a good idea for everyone, but they are essential if your situation is unusual. Self- employed or contract workers might need guidance about the best lenders depending on the proof of income that they have, and interest-only and lending into retirement are other areas that are much harder to navigate and need a broker’s advice.
There are many types of property that banks aren’t keen to lend on. This can range from flats over commercial premises and high-rise flats to houseboats and conversions. In these cases, a Mortgage Broker can assess your situation and will advise which lenders to approach.
If your mortgage application does hit a snag, then a broker can also help by using their personal contacts with lenders to find out what has gone wrong and see if it can be resolved.
Don’t be put off by a fee
Mortgage advice tailored to your situation is a service. For the Mortgage Broker to be able to offer this service they need to make money. Whatever the cost, bear in mind a good broker will save you a lot more money than you pay them. If they help you find a mortgage deal that is only 0.5% cheaper than the 3% deal you found yourself, you’ll save £7,678 over the course of a 25-year mortgage of £100,000.
Get through the application
Mortgage criteria have tightened massively over the past few years. What’s more, there are new lending rules to consider, that have made the process of obtaining a mortgage much more thorough. Affordability is no longer just a salary multiple. It’s been made more complicated, mainly to ensure borrowers can prove affordability even in the event of a rate rise, and it includes extra checks and means increased application times.
So if you see a loan provider directly, you will need to prepare for the meeting which could take an hour or more, and bring along various original documents:
- Proof of your identity (eg. passport or driving licence)
- Proof of residency (eg. utility bill or bank statement, from last 3 months)
- 13 weeks’ or 3 months’ payslips
- Latest P60 (usually issued by your employer in April/May)
- Employers’ details for the last 3 years
- Last 3 years’ copies of SA302s/audited accounts (if self-employed)
- Your latest annual mortgage statement
- Your full address history (to cover at least the last 3 years)
- Proof of deposit
- Bank statements (latest 3 months)
- Details of all existing personal and mortgage related insurance
- Employment benefits
- Doctor’s details
- Debit/credit card
- Cheque book
- Solicitor’s details (name, address, telephone)
- New property details
- Copy of credit report for each applicant