When you’re moving home, it comes with a lot of expenses and you may be looking for ways to reduce costs. However, paying a mortgage broker to work on your behalf can add value and mean you save money over the term of your mortgage explains Ian Potter, Principal Mortgage & Equity Release Adviser at Pembroke Financial Services.
The mortgage market can seem complex at any time, but given the current situation, a mortgage broker is more important than ever. Following Covid-19 restrictions, UK mortgage applications reached a 12-year high and house prices are rising, according to Halifax.
Ian noted: “A ban on sales at the height of the pandemic means demand has grown and economic uncertainty is a concern. Lenders have responded by taking some products, particularly low deposit mortgages, temporarily off the market. While interest rates are still low compared to long-term averages, they have increased in recent months. As a result, it’s more important than ever to approach the right lender for you.”
Here are six ways a mortgage adviser can add value.
1. They can offer advice from the start
“While many people approach a mortgage broker when they’re ready to apply for a mortgage, they can offer their expertise before this point,” Ian explained.
“You may have questions about affordability and the maximum amount a lender is likely to offer, allowing you to search the property market and make an offer with confidence. They can also advise on which lender to approach for a mortgage in principle and help you in this process.”
Engaging the services of a mortgage broker early on in the process can mean you don’t waste time looking at properties that aren’t right for your circumstances.
2. They will help you search the market for lenders
Ian said: “There are hundreds of lenders offering mortgage products. Deciding which one to apply for a mortgage with is important.
“Each lender has its own criteria, and you should ensure you match this before applying. Failing to match the criteria could mean the lender rejects your application. This will leave a mark on your credit report and can make it more difficult to secure a mortgage with another lender.
“With so many lenders to review, it can be time-consuming and challenging to know where to start. As someone who works in the industry, a mortgage broker will know which lenders are most likely to approve your application. This can be especially useful if you don’t match the criteria of high street lenders, for instance, if you’re self-employed with a fluctuating income.”
3. A broker can save you money in the long run
Securing a lower interest rate can save you a huge amount of money over the full term of your mortgage. But, again, with so many different lenders, it can be difficult to find the lowest interest rate while ensuring you meet the lender’s criteria. A mortgage broker will do all this work for you.
Even a small difference in interest rate can add up over the years. If you take out a £200,000 mortgage over 25 years at an interest rate of 2.5%, you’d pay £897 per month. Over the 25 years, you’d pay £69,204 in interest. If the interest rate were to increase by just 1% to 3.5%, monthly payments would increase to £1,002 and you’d pay £100,477 in interest.
Working with a mortgage broker can reduce regular outgoings and save you huge sums when you add this up.
4. They can offer advice on other features of a mortgage too
While interest rates are important, they’re not the only important feature to consider when taking out a mortgage.
If you hope to overpay, or would like the option to port a mortgage to another property, for example, a broker will be able to offer advice and consider these when selecting products for you. By considering these factors, you may save money by avoiding fees in the future, as well as having a mortgage product that gives you the flexibility you want.
5. A broker can save you time
Ian added: “A mortgage application can take weeks. If there are mistakes on the application or the lender needs to request further documentation it can really slow down the process. A mortgage broker will understand what’s needed and will be able to review your application before it’s submitted, reducing the likelihood of the lender requesting additional information. This is a step that can speed up the whole mortgage and homebuying process.”
6. They can reassure you throughout the process
Even if you aren’t buying your first home, the process of purchasing a property or taking out a mortgage can be complex. A mortgage broker will understand the process and be able to offer reassurance throughout. You may have questions about timeframes, what you can do to make the process smooth, or concerns you want to discuss with them. Having someone on your side can make applying for a mortgage easier.
Please contact us if you’d ready to take out a mortgage, whether you’re moving home or not. We’re here to offer advice right from the beginning of the process.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.