In recent years the process of applying for a mortgage has become increasingly complicated. This has been caused by a number of factors including more forms during the application process, which look to register every detail about the applicant or that the amount of mortgages that are available has ballooned.
A mortgage broker is essentially an intermediary who can help you find and arrange a deal on a mortgage. Mortgage brokers come in three forms and are all regulated by the Financial Conduct Authority (FCA). Each of the three offers a different range of deals and have varying access to mortgage deals on the market. These three forms are:
There is no substitute for expert knowledge and experience, and that’s exactly what mortgage brokers bring, something which is invaluable in the current climate. Recent reforms has attempted to aid consumers in their search for a mortgage, such as in the Mortgage Market Review (2014), however this still realistically requires a highly mortgage-literate brain to navigate the almost labyrinthian task of discovering the correct mortgage for you.
They approach the wider market
While approaching a bank or building society might appear one of the more obvious ways to apply for a mortgage, it can certainly narrow your available options because they may have company obligations to fulfil. While some mortgage brokers are tied to particular lenders, others aren’t, and it is those who aren’t that are able to approach the market with a much wider net.
As mentioned previously, the market is growing, and though the sheer amount of available deals is initially daunting, a broker can quickly filter those which are completely irrelevant and find a digestible amount which are best suited to your circumstances.
The worth in mortgage brokers is further emphasised by the willingness of mortgage lenders to work with them. This is so much so that mortgage lenders may offer exclusive products via intermediaries, and most are happy to operate the deal via a broker. One big example of this blossoming relationship is the Post Office, who have in recent years changed their stance on mortgage brokers. Head of Mortgages, John Wilcock said about their change in attitude “it is important that our products are accessible to everyone be it in branch, over the phone, online or through brokers.”
It is these growing relationships between lenders and brokers in which exclusive deals will arise. They are obviously not guaranteed if you decide to go with a broker, but you are more likely to get a genuinely good deal through the work of a broker, than going it alone.
Managing the extraordinary
Mortgage hunting alone can be especially tricky if you have a particularly unusual set of circumstances which can be anything regarding your age, whether you’re self employed or your type of income. Situations such as these are exactly the type in which mortgage brokers thrive. “People who are contractors or self-employed often need guidance regarding the best lenders depending on their proof of income”, says Andy Craddock, Managing Director at Mortgage Force Worcester.
While a mortgage broker might not be the right choice for everyone entering the complicated market of mortgages, they do offer expert knowledge, something which is invaluable to those that are looking to buy for the first time.
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