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Why is it important to connect with an Independent Mortgage Advisor?

The mortgage industry is considered one of the most important elements of the UK economy. Independent mortgage advisors play a vital role in the home buying process. They have access to the whole of market mortgage products while not being restricted to any lender. This is where an independent advisor is differentiated from a restricted advisor. Therefore, borrowers have full access to the whole of market mortgage lenders when dealing with an independent advisor.

Is it better to go to a mortgage broker or apply on your own?

If you are someone who wants to save your money and time, the best option would be working with an independent mortgage advisor. An experienced mortgage advisor would first assess your circumstances, then check the lending criteria and recommend you a suitable mortgage product.

Therefore, it is important to find an advisor with the necessary skills, vision, and knowledge who will be able to assist you with the best to suit your requirements. Also, you must find an advisor who works in line with compliance regulations and treats customers ethically in all instances.

For example, if there is a cheaper/eligible product directly available from a lender, an independent mortgage advisor would always inform the client. Simply, an independent mortgage advisor would act in the best interest of the applicant. When there are cheaper/eligible products available via mortgage intermediaries, borrowers could always benefit by working with the advisor.

Role of the mortgage advisor

A mortgage advisor works as the middle person between the lender and borrower. The mortgage advisor would help the applicants with a fact find completion, compiling of all necessary documents, assessing the loan amount affordability, recommendation of suitable mortgage product and submitting the full mortgage application.

Documents include pay-slips, employment contact, SA302 Tax Calculations, and Tax Year Overviews, Annual Accounts, ID documents, bank statements. Modern-day mortgage advisors are trying to automate the mortgage process as much as possible. The ultimate objective is to reduce the paperwork by increasing digital presence to save time. They assist you with online client portals where borrowers have all the information about their mortgage and the facility to upload documents online. It is more secure and trustworthy.

Mortgage Advisor- Scope of the service

An experienced mortgage advisor would maintain regular communication with the applicants from the first discussion to the case completion. It is very important to keep all parties updated on what is happening with the mortgage application and other related parties such as the surveyor, solicitor.

A mortgage advisor with excellent service levels will not stop their service at the stage of receiving the mortgage offer from the lender. They will track the progress of the case with the solicitor and keep the applicants updated on every step. Therefore, if there is any delay in the process, they can fix it soon as possible. A mortgage advisor could make your life much easier as they know the whole home buying process inside out.

Are mortgage brokers free?

Similar to other financial advisors in the UK, mortgage advisors also get paid a procuration fee by the lender. The mortgage advisor submits the full mortgage application on behalf of the client. Also, they provide all the documents and other necessary information to the lender which makes things real, easy for the applicant.

Mortgage advisors have the opportunity to charge a fee from the applicants on the advice they offer. Some mortgage advisors don’t charge a fee from the applicants. It depends on the internal policy of the intermediary to decide whether to charge.

What’s better; mortgage broker or bank?

It is quiet-often that applicants with complex income sources, foreign nationality, and bad credit history get rejected by the lenders. This is where the expertise of a talented mortgage advisor would become important as they know the type of lender to approach depending on the circumstances of the applicant.

For example, a foreign national who is a resident of the UK for less than 2 years with income from self-employment might find it a little difficult to find a lender on his own. Also, a British national with a poor credit score might get rejected by the high-street lenders. Therefore, the applicants must speak to an independent advisor to assess their circumstances first before applying for a mortgage. Also, mortgage advisors sometimes have exclusive deals from Banks for applicants in Sheffield.

How can the mortgage broker help applicants with bad credit histories?

Whenever you apply for a mortgage and request a Decision in Principle (DIP), the lender would run a credit check on the credit file. It is advisable to get it right the first time as it leaves a footprint on the applicants’ file. A lender such as Halifax would only do a soft credit check at the DIP stage. Therefore, when applicants have a poor credit history, they need to be very mindful of the lender they are going to apply to based on the hard or soft credit check they are doing.

On the positive side, it is important to note that independent mortgage advisors have access to specialized lenders who provide mortgage facilities for applicants with poor credit scores.

Can someone secure a new re-mortgage if you have bad credit?

If someone owns a property with a mortgage on it and has an adverse credit history, then it might be difficult to find a new lender at a cheaper rate for the re-mortgage.  A new lender would always require a full mortgage application which would be subject to complete credit check and underwriting. Therefore, if you have bad credit, then re-mortgage options would be from specialist lenders who are okay with it. A mortgage advisor would do a proper comparison to check whether it is worthwhile to apply for a re-mortgage or stay with the existing lender by applying for a product switch.

Can someone secure a right to buy a mortgage with bad credit?

The right to buy scheme is introduced to help people get on the property ladder. The people with good credit can benefit from the scheme. It is important to highlight that not all lenders would accept the cases subject to the right to buy scheme. Therefore, if you have bad credit and looking for the right to buy, then your options would be very limited. The right mortgage advisor would still be able to assist you.

Total number of mortgage sales in the United Kingdom (UK) from 2014 to 2020, by advice given

Source: Statista

When having a deep dive into the total number of mortgage sales in the United Kingdom (UK) from 2014 to 2020, by advice given, it is evident that a large proportion of total mortgage sales has been on an advisory basis. It indicates that over the years, the mortgage industry in the UK is reliant on mortgage intermediaries and independent advisors.

Impact on the mortgage industry due to the Covid-19 pandemic

The recent reduction in total advice from 2019 to 2020 could be mainly due to the pandemic. The mortgage market got affected by the Covid-19 pandemic and it had a significant impact on the home buying process. Lenders had to reduce the staff and physical valuations were postponed. The home buyers found it difficult to visit the properties due to social distancing rules. Now, things are coming back to normal.

Property and mortgage market after the stamp duty holiday

The UK Government introduced the stamp duty holiday to help home buyers. This attempt was further strengthened by the 5% deposit mortgage guarantee scheme. As the full stamp duty holiday ended on 30th June 2021, now the property prices have started to come down. However, with the demand being highly variable, the experts claim that it would stabilize in the long run.

How can a mortgage advisor help you to save on the mortgage?

An experienced mortgage advisor would always keep you posted on changes in the mortgage market and how it affects your mortgage. For example, the implications on the stamp duty and how to benefit from cheaper rates with low product fees. Also, mortgage advisors would guide you on making repayments towards the mortgage to maintain low monthly payments while reducing the capital balance.

Applicants often ask the question of whether to apply for 2 years fixed deal or 5 years fixed deal. A talented mortgage advisor would do an effective cost comparison between the two options considering the total interest cost, product fees, valuation, and other lending charges and the cost-saving from the outstanding balance as well.

Usually, the 5 years fixed interest rates are higher than the 2 years fixed deals. Further, borrowers have more flexibility with the 2 years fixed deal mortgages as they are not tied into a deal for a longer-term. The mortgage advisor would compare the pros and cons of the two options and recommend a suitable deal.

Would the mortgage advisor help with your tips to improve your credit score?

It is essential for mortgage purposes that applicants maintain a good credit score. If someone has not lived in the UK for long enough or if been outside the country for a long period, the credit score gets affected. A mortgage advisor would always encourage borrowers to maintain their credit scores.

  • Check whether you are registered on the electoral roll
  • Set up direct debit payments for utility payments and other main expenses
  • Update your correct address with the banks
  • Settle the credit card balance in full every month
  • Don’t use the full credit balance. Leave some head-space.

An independent mortgage advisor could be the critical success factor in a mortgage application. The advisor would make sure that the applicants are ready for the process assessing their requirements, finding the suitable lender and mortgage product with expert knowledge, and track the purchase or refinancing process until completion. Therefore, you must connect with an independent mortgage advisor to discuss your mortgage in detail.

As a mortgage is secured against your home, it could be repossessed if you do not keep up with the mortgage repayments

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Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of our Independent Mortgage Brokers to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisers working for or with Independent Mortgage Brokers are fully qualified to provide mortgage advice and authorised and regulated by the Financial Conduct Authority. All our independent Mortgage Brokers will offer advice specific to you and your needs and circumstances. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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