For most people, buying a property means taking out some sort of mortgage. This is an ever-changing landscape and there are lots of options out there as well as lots of requirements that need to be met. Our professional conveyancing solicitors can provide expert advice on any mortgage or remortgage situation.
Why Mortgage Advice is Crucial
A mortgage is probably the biggest financial commitment that you will ever make and so it will need a lot of careful consideration. You not only need to ensure that you are eligible for a particular mortgage, but you also need to understand all of the terms within it to see what factors might change, whether you can afford it and what to do if you are struggling or want to pay it off. This all needs an expert eye who can help you to see any pitfalls and advise you on the things that you need to be on the look out for.
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The Role of Mortgage Advisers
A mortgage adviser can provide a lot of services that will make the process of getting a mortgage much easier. Initially, they will look at your individual financial situation to make sure that you can meet the lending criteria and pass any of their affordability tests. Some mortgage advisers will have deals or relationships with certain lenders that can either get you exclusive offers of help to talk to someone that give extra information.
One you have settled on a product; your mortgage adviser can help you to complete all of your paperwork to make sure that the application is correct and can progress more quickly. They can help you to find the right mortgage for your situation and the ones that you are most likely to get, as well as helping you to take any other costs into account such as fees and the interest rates.
When to Consult a Mortgage Adviser
A mortgage adviser should be your first port of call, as they can then put you in a position where you will know what finances are available to you. At this point, you can make a more targeted search for a property knowing exactly what you have to spend. They can help you to get a Mortgage in Principle which will put you in a stronger position when making offers on a house.
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How to Find a Reliable Mortgage Adviser
A mortgage adviser needs to be someone that you can trust, and so they need to have a good reputation. Look for someone recommended by friends and family or by your estate agent or conveyancing solicitor. A whole-of-market broker can assess all of the mortgages that are available, giving you a wider choice of products and the best chance of getting a good deal. You should also check that your mortgage adviser is qualified and experienced, with most mortgage advisers holding a Certificate in Mortgage Advice and Practice qualification.
Understanding the Mortgage Market
The mortgage market can be a complicated one, especially with economic uncertainty and changing interest rates. This means that there are a lot of products on the market that can vary quite widely. There will be fixed rate mortgages which ensure you will be paying the same interest rate for a set amount of time or variable rates that change in line with the interest rate – something which is great when rates are going down but risky when they are on the way up.
You also need to look at repayment mortgages which will pay off a combination of capital and interest until the full amount has been paid. Alternatively, you could consider an interest-only mortgage which can be more affordable but will only pay off the interest and not any of the capital, meaning you will need another way to pay off the full amount at the end of the term.
The mortgage market can change quite quickly, and so it is important to get expert advice on what it looks like currently and what you might be able to expect in the future.
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The Importance of Tailored Mortgage Services
Your financial situation is unique to you, and so a tailored mortgage service can work with your exact requirements to find the mortgage that is best for you. This will look at your current situation, what you will be able to borrow and who is likely to lend to you, as well as what might happen in the future and whether you will be able to continue to afford the mortgage. This kind of personalised advice is the best way to get a long-term solution to financing your new home.
Risks of Not Getting Mortgage Advice
Whilst it is possible to find a mortgage on your own, there are risks attached to doing so. You could find yourself being rejected by mortgage lenders, and this can have an impact on your credit rating, which will then make finding a lender even harder. You could also end up with a mortgage that quickly becomes unaffordable, and if you are unable to keep up repayments, you are at risk of losing your house.
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The Benefits of Using a Mortgage Adviser
Finding and applying for a mortgage can be a long and complicated process, so using a mortgage adviser can take a lot of the stress and work out of it. They are able to spend the time looking at your financial situation and targeting their search towards the right type of mortgage for you, finding products that are achievable and affordable.
Mortgage Advisers vs Direct Lenders
A mortgage adviser is someone who works to bring borrowers and lenders together by looking at individual circumstances and matching them up to find a relationship that will work. In contract, a direct lender is a financial institution that will approve and finance mortgage loans themselves.
Mortgage advisers can give you a broader picture of the mortgage market, looking at lots of lenders and find the right one for you, whilst a direct lender can offer you a handful of products all from the same lender. This means that you might need to look at a number of direct lenders to find the mortgage that you want whilst a mortgage adviser can look at multiple lenders at once, saving you a lot of time.
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Fees and Charges: What to Expect
Mortgage advisor fees can vary and can be around £500, whilst others will not charge fees to the borrower at all as they will be paid commission by the lender instead. The amount you are likely to be charge might depend on how complicated the case is, but you should be able to find out how much this will be before you begin.
The Mortgage Application Process
You will need to spend plenty of time researching the mortgage that you want and getting your finances in order to make the application process a more straight forward one. You will then be able to apply for a Mortgage in Principle, which is not a mortgage agreement, but instead is an indication of how much a lender would be willing to loan you in principle. When you have had an offer accepted on a property, you can then begin to apply for your mortgage. A mortgage adviser can help you to do this to make sure that the application is correct and more likely to be successful.
As part of your application, you will need to be able to prove the identity of everyone who will be responsible for it and show details of your income. If you are employed this will be at least three months of payslips, your most recent P60 and six months of bank statements. For the self-employed, it can be more complicated, and you may be required to submit your accounts and tax returns to show the state of your business and what you are forecast to earn. You should also provide details of any benefits or investments.
Once all of this has been submitted, your lender will take some time to consider your application and inform you of whether you have been successful. If you are declined, it could be because some information is incorrect or because you have failed the affordability tests that show whether you are in a position to manage the mortgage repayments. If you are successful, you will need to give the details to your conveyancing solicitor who can then request the funds from the lender at the appropriate time in your purchase.
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