Should I Use A Mortgage Advisor or Find My Own Mortgage?

Most of us need to borrow money in the form of a mortgage in order to buy our next home. Going about getting a mortgage offer has, since the 2014 Mortgage Market Review, got a whole lot more complex, with all sorts of requirements now set by the government.

Of course, the stated objective of these extra requirements, such as establishing ‘affordability’ when considering a borrower’s application, are to protect the borrower from unforeseen problems further down the road. For example, should interest rates increase, will the mortgage still be affordable?

One of the downsides to the consequences of the review is that the whole mortgage application process has become even more complicated. Huge amounts of information are now requested by mortgage lenders and you will find yourself having to put together (and provide evidence for) your detailed monthly budget, including everything from gym membership and child care to groceries and train fares to work.

What then, are the advantages and disadvantages of using an FCA qualified and accredited mortgage advisor over, say, doing it yourself?

The advantage to not using a Mortgage Advisor is that you won’t be required to pay them a fee for their work. This fee varies and must be set out when you instruct them, but it’s usually made up of a fee from the mortgage company, paid directly to your advisor, and a fee charged to you by the advisor. The fee for most people’s mortgage is likely to be several hundred pounds although only a small element of the fee needs to come out of your own pocket.

Moving home is an expensive activity, especially with valuation fees, moving costs, lawyers (and possibly estate agents’ fees) and associated costs such as Stamp Duty Land Tax (SDLT). They all add up and it can be tempting to save money. That’s understandable, but choosing where to save is likely to be a very important decision.

Employing the services of a qualified Mortgage Adviser has several significant advantages and they are;

1. A Vast Market! With so many mortgage lenders in the market, all with different lending criteria, it could take you months to properly evaluate what is available to you, which deals are the best for you and then meet with the lenders and process an application. A professional Mortgage Adviser will have access to all the major lenders (and many of the niche ones too) and may well be able to save you a lot of money!
2. The known unknowns? It’s all well and good doing your own research, but that really requires you to know enough about the differences in the lending market so you can ask the right questions. Knowing what’s important and what you don’t know is critical to making proper comparisons between lender’s proposals.
3. Wasted Time. A professional adviser is setup to make applications on behalf of their clients every day. They also know the lenders and can quickly ‘unblock’ logjams that might otherwise take a while to identify and resolve.
4. What if I get it Wrong? That’s a good question. Making a mistake when choosing your mortgage provider could mean that you run with a lender that isn’t really looking for a borrower like you. They might have strict criteria on loan to value ratio, employment or credit history, personal circumstances, etc. Applying to the wrong lender could waste time and your money as you pay over application fees, valuation fees and incur legal charges that subsequently become ‘abortive’ and duplicated when you start the process again. What’s more, if you proceed with a mortgage offer that doesn’t suit you, you may well find yourself tied into an expensive interest rate or paying penalties later when you want to move. A mortgage broker can evaluate all the costs and criteria for you and present the best options quickly and simply.
5. Someone to hold your hand! It may sound silly, but no-one expects to have to rewire their home themselves. In fact, you have to use a professionally qualified electrician for many jobs. Quite right to, you’re probably thinking. And yet, if you fail to get good advice when arranging your next home loan you might well find yourself out of pocket to the tune of many thousands of pounds! Just a tiny increase in the interest rate you pay, or the levying of penalties and charges later in the mortgage might well cost you thousands.

All-in-all, the potential savings in time and money make using a qualified Mortgage Advisor the prudent choice. What’s more, an initial chat with Mortgage Required obligates you to nothing and might just make the difference between securing the purchase of that dream home - or not.

For more information contact us or speak to a mortgage advisor on 01628 507477.