What Does a Mortgage Broker Do?
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What Does a Mortgage Broker Do?
John Egerton talks us through the role of a financial adviser.
What does a mortgage broker do?
The primary role of an adviser is to make sure their clients obtain property finance that is the most suitable and cost effective product for them. They might be First Time Buyers, home movers or even a property investor looking to purchase their 20th Buy to Let investment and grow their portfolio even more.
It’s our role to make sure that their finance meets their objectives and circumstances. We should also save time and hopefully also save money in the process.
What is the difference between going to a mortgage broker like yourself versus your local high street lender?
It’s simply the range and choice. We now have 60 to 70 lenders on our regulated panel and it’s ever increasing.
These lenders specialise in different areas and situations. You might be self-employed. You might have recently changed your role or experienced adverse credit. There’s a whole host of different scenarios that I’ve seen since being an advisor.
When you go directly to one lender, you’re limited to what they have to offer – not only in their criteria and policy but also the product range. It might work, but there is a good possibility – especially in today’s world – that you might not fit their scenario.
Once you’ve done that and gone through the process, you could be back to square one. By coming to an advisor straight away, we’ll do an assessment of income and expenditure, your objectives and personal circumstances. Then we’ll go to the lender that is suitable for you
In a volatile market like today, that’s even more essential. But even when interest rates were more stabilised at around one or two percent and products were more cost-effective, going direct to the lender could mean you are potentially missing out on a more suitable product. You’d get that advice from an adviser like myself.
What services does a mortgage broker offer?
Our role is not just about obtaining finance for your property purchase – it encapsulates so much more. We’re here to help you and negotiate on your behalf, especially with First Time Buyers.
I always draw on my own experiences. When I went to view my first property I got really excited, called the estate agent and said I was starting my offer at this amount. The estate agent took that to mean I was willing to go higher… So based on my own experiences, I’m in a great position to help First Time Buyers and home movers understand how to negotiate.
It can be very daunting. Ultimately, the estate agent acts for the seller, as that’s who will pay their fee. If you do want to put an offer in, we’ll help you position it and negotiate it.
We help with everything that comes with a purchase, including solicitors. You might get three different quotes from solicitors – but who’s going to be best for you? Once you’ve chosen a solicitor and we put the mortgage application in, the legal work runs simultaneously.
At Maple Leaf, we have a dedicated person who is excellent at dealing with conveyancers. Most clients are busy working full time. They might have a family to look after, so we’ll chase things up for you and see how the transaction’s going. We check if there is anything they need from you or us.
We also help with surveys. Most lenders will only do the most basic valuation, and if the client purchases a property with a good deposit level, there’s a good possibility that they might just do an automated valuation from their desktop. They might not even go in to inspect the property.
Depending on the condition or the age of the property, we might look to get a more in-depth view, where an independent surveyor goes and takes a proper look at it. That will give you peace of mind that when the purchase does complete there won’t be any nasty surprises or big renovations needed. *The products and services promoted here are not part of The Openwork Partnership offering and are offered in our own right. The Openwork Partnership accept no responsibility for this aspect of our business. These products are not regulated by the Financial Conduct Authority.
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Can you also help with mortgage protection?
I’ll be honest – when I first got my mortgage with my partner, I didn’t know anything about income protection or critical illness cover. My main objective was to get that mortgage and buy the property.
That’s what 90% of people come to me for. But it’s my role to ask them how their financial commitments would look if they became ill or injured and were out of work for a significant period of time.
It’s hard to think about, but the latest figures suggest that one in two of us are going to get cancer in our lifetimes. That would lead to significant time out of work.How would you meet not just your mortgage but your over financial commitments for the household – your water, gas, electric etc?
It’s my job to educate and recommend protection like income protection, critical illness cover and life insurance. Again, it’s a horrible thing to think about, but things would be even more stressful in the event of death. How would the surviving spouse or dependents be financially protected in that event?
There’s a lot more to our role than just obtaining finance to help you purchase a home.
At what stage should I see a mortgage broker?
I would say at the earliest opportunity. Again drawing on my own experiences, I remember saving up for another property, getting accepted and then the estate agent asking if I had a mortgage adviser.
I didn’t know what that was! Luckily for me, it all worked out from an affordability point of view. But I would say, whether it’s a remortgage, a first time purchase, a home move or a Buy to Let investment, you should sit down with a mortgage advisor.
Let us know what your objectives are, look at affordability again and if you are First Time Buyers or home movers, we’ll get a Decision in Principle. That puts you in a position of strength. You’re not viewing properties, wondering if you can afford them. You’ll know where the boundaries are and what parameters you can work within.
Don’t jump in head first. Sit down with an adviser, weigh it up, examine everything and then go from there.
Does it cost for an initial consultation with you?
Not at all. Different advisers structure their fees in their own ways. For myself, there’s no initial fee. My overall fee is £295 , but that only becomes chargeable when your transaction completes. I use the word transaction because it’s the same for a remortgage, a first time purchase, a home move or a Buy to Let purchase.
That gives my clients peace of mind – they will only have to pay me a fee once they have got the product that they came to me for. There’s no fee for the initial consultation.
What else do we need to know about working with a mortgage adviser?
My one golden nugget is to not be afraid to ask questions. It’s not just for First Time Buyers that the process can be daunting.
When I went to school I can’t remember ever having any lessons about mortgages, so don’t feel silly asking questions. I can promise you that everyone has been in the same position. Everyone has things they’re not sure about.
As advisers we can only recommend. We can’t tell a client to do something and we can’t force them to do anything. We can only recommend what we see fit based on their circumstances and the most suitable option.
Ultimately, you have to make the decision, so a client that asks questions and clarifies things will ultimately then make better decisions. So regardless of how experienced you are, always ask questions about anything you’re unsure of.
Approved by The Openwork Partnership on 15/05/24
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
SOME BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.
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