Psst … I’m going to tell you a secret!
YOU CAN ARRANGE YOUR MORTGAGE YOURSELF!
It’s true! You can do this yourself, you don’t need to use a mortgage broker.
You have a couple of options –
1 – Go direct to a bank or building society.
2 – Use a comparison site, input your requirements and choose a product, and you will then be directed to the lender’s website.
The application process is pretty much the same with both options. You discuss your details with them, either over the phone or in a branch, tell them what you want and go from there. You’ll have to provide them with the documents they require, such as ID, bank statements, and payslips. If all goes well and you pass their credit score and lending criteria, you can then complete their full mortgage application and once a valuation of the property has been done and assessed as acceptable, you should be offered the mortgage.
This is a very simplified version of the mortgage application process, I will say. It is a time consuming exercise.
WHY I DON’T BELIEVE THIS WAY IS BEST
Taking on a mortgage is THE largest and longest financial commitment you will ever make. I strongly believe you should have professional, expert advice from a whole of market mortgage broker, to ensure that you get the best deal, with the right lender, to suit your individual circumstances.
A good mortgage broker will spend time first getting to know you and your situation. They ask a lot of questions, which may seem irrelevant, but trust me, they’re not! I spend time on my initial ‘Fact Find’ with my clients, which goes beyond just getting names, dates of birth, salary details and mortgage required – because I’m building a story, their story, and every question leads me to a deeper understanding of what they need, what their situation is, what would be the best solution, and what my advice and recommendation will be.
If you go direct you are ultimately responsible for your own choice, and whilst you may get the mortgage you asked for, there could very well have been a better, more cost effective solution for you.
Getting proper advice is so important.
Policy criteria between lenders varies considerably. Simply put, you can be declined a mortgage by one lender, for falling short of their specific criteria – whether it be due to affordability, employment status or credit score – but be accepted by another due to their policy being different on the same issue. This can be at the outset – normally due to a credit history blip – or further along the application process once the underwriter has gone through the paperwork provided.
I’ve had clients come to me after being declined a mortgage, and during the initial discussion and asking questions, I can immediately pinpoint why. All is not lost, however, because what one lender deems unacceptable, another may not.
Before making a recommendation and submitting a mortgage application, I will always thoroughly check the lender’s criteria to make sure your circumstances fits their lending policy. This can save time, disappointment in being rejected, and potentially money.
THE APPLICATION PROCESS
Applying for a mortgage is not straightforward, and can be time consuming going direct.
One thing I do have, as a broker, is more support from the lenders, along with expert knowledge of what each lender will require to support the application. I make sure it’s all submitted at application stage to speed up the process.
Mortgages submitted via a broker go to a different processing centre than directly submitted cases, and we do have better access to underwriters. Most often there is a single point of contact, so I can speak to the same case handler every time, unlike applying directly where you speak to a different operator every time you call, having to repeat your situation each and every time.
We also have access to designated managers, and in my experience this is a huge plus for using a broker.
BONUS – EXCLUSIVE DEALS AND INTERMEDIARY ONLY LENDERS
If you go directly to a bank, they can onlyoffer you their products. They cannot tell you if there is a cheaper product available elsewhere (or if they have an exclusive product through a Mortgage Club*).
Comparison sites give you more choice, for sure, but they are not completely whole of market. There are certain products and lenders that will not be shown, so you won’t know if there is a better mortgage available that isn’t on their list.
Being part of the *Legal & General Mortgage Cluband Stonebridge Group Networkgives me access to Exclusive Dealsthat are not available on the high street.
Banks and Building Societies will offer special rates to mortgage clubs as exclusive deals, which are sometimes better than the deals they offer directly on their website, and these mortgages will not show up on comparison sites.
There are also lenders on the market who do not deal with customers directly. They require you to go through a mortgage broker who is registered and able to do business with them. Essentially, they require you to have had adviceand the application needs to be submitted by a broker. These deals will also not show up on comparison sites either.
So, if all of the above sections don’t apply to you, if you don’t really need or want advice, you don’t have anything quirky about your situation so will fit with most lender’s criteria and you are confident in the application process and don’t mind spending your time dealing with the lender – using a mortgage broker can still potentially save you money!
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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Not all Buy to Let Mortgages are regulated by the Financial Conduct Authority.
You may have to pay an early repayment charge to your existing lender if you remortgage.
There may be a fee for arranging your mortgage, however the precise amount will depend on your circumstances. Typically the fee is £395.