Martin Lewis recommends using a Mortgage Broker
Martin Lewis from Money Savings Expert offers lots of advice to those looking to remortgage in these uncertain times. Full details can be found at https://www.moneysavingexpert.com/remortgaging/
Martin has said numerous times, on TV, radio and in the press that he recommends people to use a reputable Independent Mortgage Broker.
Here are a few tips from his website:
Now talk to a mortgage broker
Once you've benchmarked a good rate from our Mortgage best buys tool, it's time to see if a qualified mortgage broker can beat it.
Mortgage brokers scour the market to find you a good mortgage deal. By using one, you swiftly cover a huge slew of lenders, and get added clout with them to ease your acceptance as well as an extra layer of protection if things go wrong.
They will also be able to advise you on Government mortgage schemes (including shared ownership and Help to Buy equity loans) if you're eligible – tell your broker upfront if that's what you're looking for.
Qualified mortgage brokers are also worth their weight in gold, because they know key details about lenders' criteria. So they would know if the lender you're thinking of doesn't lend on properties above shops, or in council blocks – so they'd be able to recommend a different lender that does.
But, the key is to find a broker you're comfortable with. The estate agents you meet when house hunting will often recommend brokers. They may even work from the same office. But you are NOT tied to using these, even if you buy via that estate agent.
Ask friends who've moved for recommendations – many local brokers are fantastic. The aim's to find you the best broker for the lowest possible price. Not all brokers are the same. Some are limited in what they can offer you.
Here are the three crucial questions to ask brokers...
1. Can you get me a mortgage from any UK lender, right now?
This finds out if your broker can source you ANY UK mortgage. Not all can so it's important to know which you're dealing with. Here are some of the possible answers:
'No.' Some brokers are tied to one lender or operate off a small panel of lenders, so they search fewer deals. This makes it simpler and cheaper for them to operate.
'We check all products available to brokers.' The key point to note here is the last phrase – available to brokers. This used to be called 'whole of market'. Many of these brokers will exclude lenders and products which are only offered directly to the public, mainly as they won't receive a commission. On top, they may not be able to submit an application on your behalf.
'We check all lenders.' Some brokers do check lenders' direct-only deals too. However, they are more likely to charge a fee. In reality, it's unlikely a broker could guarantee you access to EVERY mortgage, as exclusive deals can be arranged between lenders and brokers (and clubs that brokers can join).
Just be clear on what your broker is offering. Weigh up the need to check every deal, your willingness to do some legwork yourself, and if you're happy paying a broker fee. Once you've found a broker you're happy with, you need to ask them the next questions to find out if they're the best broker for you.
2. Do you charge a fee?
This tells you how the broker makes their money from your mortgage deal. Brokers have two possible sources of income, which are:
Commission. Almost all lenders pay brokers what's called a 'procuration fee' of roughly 0.35% of the transaction (£350 per £100,000). This is a commission based on your loan size – and doesn't affect the cost of your mortgage. They are obliged to tell you the exact amount they'll be paid before you apply. You can find this info alongside the 'Key Facts Illustration', which they must provide before you apply.
Fees. Brokers may also charge you a fee directly. This might be on top of the commission, or instead of it (in other words, they charge a fee and refund you the commission). If they offer you the choice between fee or commission, then they can call themselves 'independent'. If they don't, they can't – which is a bit confusing.
No reputable broker should charge more than around 1% of the mortgage value, even for customers with a poor credit rating. If yours charges more, walk away. Fees can be charged at any point in the process, providing you're told about them at the outset. Yet avoid using any broker who charges you big fees before completion. If the purchase falls through, you'll probably still have to pay.
As this is a MoneySaving site, we've always said our preference is not to pay a fee if you don't have to. For this, you're looking for a fee-free broker (in other words, one that makes their money through commission) who can advise on the widest range of mortgages possible.
3. Are you qualified?
You need to find out whether a broker is qualified to advise you. Make sure you're getting advice from a qualified mortgage adviser (the most recognised qualification is called CeMAP). Your broker should assess your needs and eligibility before recommending the most suitable product for you. This route also offers the most protection for you as a consumer.
If the advice turns out to be wrong, the Financial Ombudsman will be able to investigate any wrongdoing. If you chose a product from an information-only service, you'd have no comeback if you made the wrong choice.
If you would like to talk to one of our expert Mortgage Advisers about remortgaging, moving house or getting on the property ladder please contact us today.
For further details about the services we offer as a fully independent mortgage broker or any other mortgage information book your FREE CONSULTATION with one of our expert Mortgage Advisers.
Bristol Mortgages Online www.bristolmortgagesonline.com Tel 0117 325 1511
Bath Mortgages Online www.bathmortgagesonline.com Tel 01225 584 888
Exeter Mortgages Online www.exetermortgagesonline.com Tel 01392 690 888
Email info@swmortgages.com
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