What Does a Mortgage Broker Do?
You voluntarily choose to provide personal details via this website. Personal information will be treated as confidential and be held in accordance with GDPR May 2018 requirements. You agree that such personal information may be used to provide you with details of services and products in writing, by email or by telephone. By submitting this information, you have given your agreement to receive verbal contact to discuss your mortgage requirements.
What Does a Mortgage Broker Do?
Whilst all Mortgage Brokers try and achieve the same goal -get their clients a Mortgage, they could have different processes and procedures
Below is a brief overview of how I would do my work:
- Understanding Your Financial Situation
- Work out how much you can afford
- Finding the right Mortgage
- Handling the Application
- Provide ongoing Support
Understanding Your Financial Situation
A mortgage is a large and long-term financial commitment that requires careful consideration and Planning. Your mortgage broker aims to tailor your mortgage to suit your specific financial and personal needs not just for now but also for the next 2-10 years.
The first task of a Mortgage broker is to understand your financial situation in detail. Through a comprehensive question-and-answer process, aka Confidential Fact Find,they will ask you questions regarding your income, savings, and existing debts, and more importantly, they will want to know about your future plans, how long you intend to stay in the new property, your job prospects, etc.
Through this get-to-know-you process, they gather important information to source a mortgage solution that is tailored to meet your individual circumstances and requirements. This personalized approach ensures that any new Mortgage fits your financial goals and needs
For example, they might recommend a mortgage with no early repayment charges if you plan to move again in a few years. If you’re looking for stability, they might find a fixed-rate mortgage that guarantees your payments
When should you contact a mortgage broker?
Your Monthly Budget
During your fact-finding process, your broker would have collected more information about your income and expenses and considered any other loans, credit cards, or commitments that will continue alongside the new mortgage. This information will help both of you decide how much you can pay back every month, which will, in turn, determine how much you can borrow and the length of your mortgage term.
Explaining the Costs Involved
Understanding a mortgage involves more than just repaying the loan. There are various additional costs like arrangement fees, valuation fees, legal fees, and potential early repayment charges. Your mortgage broker plays a crucial role in helping you comprehend these expenses from the beginning, explaining them in simple terms so you can plan accordingly. They also assist in budgeting for these costs and try to negotiate to minimise or remove some of these fees, preventing any unexpected expenses in the future.
Prove the Facts
All lenders will need proof of all the information provided. So you will need to provide up-to-date
- Payslips (employed)
- Latest Accounts and tax overviews for the Self-employed
- Latest Bank statements showing Income & expenditure
- Proof of Deposit
These Documents will also verify what you can afford
Providing Expert Advice
Experienced Mortgage brokers will be experts in their field, and they use this expertise to guide you. They explain the pros and cons of different mortgage types, like how a tracker mortgage might be cheaper if interest rates stay low but could become expensive if rates rise. They also help you understand the fine print so you’re not caught off guard by hidden fees or charges.
For example, you might be deciding between a variable-rate mortgage with a low initial rate and a fixed-rate mortgage with a higher but stable rate. The broker will explain the scenarios in which each option would be better, helping you make a decision based on your risk tolerance and future plans.
Work out how much you can afford
One of the initial questions my clients always ask is, “What mortgage can I borrow?” However, I believe the more important question is, “What mortgage can I afford?”
The answer to this question varies from bank to bank because each bank has its own system and software to assess borrowing capacity. Some banks may lend more to people in professional jobs, while others may lend less to individuals on a Tier 2 visa.
Essentially, your mortgage broker should be able to find which lender will lend you your Mortgage Amount by understanding your income, budget, and mortgage needs and inputting this information into the Lenders Affordability Calculators.
Finding the Right Mortgage
Thankfully, technology has significantly simplified the process of mortgage research for brokers. They no longer need to contact numerous lenders to inquire about their latest products and rates and then determine if they will accept your mortgage application.
Nowadays, mortgage brokers have access to advanced software that contains current information from over 50 lenders, including thousands of products, interest rates and eligibility criteria. They use this software to efficiently locate the best mortgage options for you and narrow the research down to
Find the most affordable lender and product over the term you need. This involves looking beyond just the headline interest rate (e.g., 4.95% for a 5-year fixed rate) and considering other factors such as Admin fees, surveyor charges, and redemption fees. This gives a more accurate picture of the true cost over the entire term.”
Making sure you meet the Lenders criteria
The right mortgage isn’t simply the one that has the lowest interest rate and costs the least. Your best mortgage is the one that suits your needs, costs the least over the term, and, above all, you will qualify for.
Some lenders might deny you a mortgage due to how long you have been in your job, the makeup of your bonuses, lack of credit history, or where your deposit is coming from.
So Mortgage Broker’s responsibility includes filtering out the loans you don’t qualify for and focusing on the ones you do. It’s important to note that skilled and experienced Mortgage Brokers have established relationships with lenders and know how to present your application in a way that increases its chances of approval.
Handling the Application
Filling out a mortgage application can be daunting because of the mountains of paperwork involved, including various forms and documentation for your income, identity, deposit, and more. Generally, DIY mortgagers make mistakes in this area, which can be quite costly in some circumstances, with the worst being losing the house of your dreams.
However, a mortgage broker can ease this burden by efficiently and carefully managing the process. They ensure that all paperwork is accurately completed and submitted promptly, reducing the chances of delays or the lender rejecting your application due to missing or incorrect information.
Initial Checks completed
This means the lender has assessed all of the information provided, checked all of the Documents provided, and you have passed their Affordability Checks.
Property Valuation completed.
This means that the lender has assessed the property to be suitable to lend on, or as they say, it is “suitable security “
Mortgage offer
This Document states that the Lender has completed all of their enquiries and is willing to lend you the Mortgage required . A copy of this will go to your conveyancers
Conveyancing
This is the legal part of the process and should be handled by professionals. If you don’t already have a solicitor, your mortgage broker may recommend one they have worked with before. It’s important to note that nobody in the process, including the mortgage broker or estate agent, can force you to use a specific solicitor; the choice is always yours.
Exchange of Contracts
This is exactly what it says in the title: You and the seller have exchanged binding contracts. You agree to buy the property, and they agree to sell. No party can back down from this contract without suffering serious financial penalties. Generally, on the day of exchange, your solicitors will also agree with you and the seller’s solicitors on a suitable day for completion
Completion
This is the final part of the journey – getting the keys to your dream home. Normally, on the morning of completion day, the lender will send the money to your solicitors. In return, your solicitors will send the money to the seller’s solicitors. The seller’s solicitors will then inform the estate agents that the transaction has been completed. The estate agents will then call you to arrange the pickup or drop-off of the keys
Providing Ongoing Support
A Mortgage Broker’s job doesn’t end once your mortgage is approved. Time flies, and before you know it, your mortgage will be up for review. I make it clear to my client that I will be in touch with them 3- 4 months prior to their Mortgage Review to discuss their New mortgage options going forward. This way I can make sure that my clients will seamlessly transfer from one product to another and not go onto an expensive variable rate
Why Us
- Raising The standards of financial advice
- Making financial advice accessible to all
- Trusted & stress-free financial advice
- Friendly, personable advisors
our Mortgage Butler service
Help you to collate all of the documents you will need to apply for a mortgage
Complete and submit your application
Handle all the enquiries by the Mortgage Lender
Liaise with your Estate Agent
Help you to nominate a good & competitive solicitors
Work with all the parties to get you to Mortgage completion
Keep in touch with you on a yearly basis and help with your future needs
Questions to ask your Mortgages Broker
What Mortgages Lenders do they have?
When choosing a Mortgage broker make sure they have a comprehensive list of lenders.
Importantly, Lenders that have specific products for First Time Buyers, Buy to Lets and Bad Credit Mortgages. These could be smaller, less known lenders that do not deal directly with the public.
How do Mortgage brokers get paid?
You might be wondering how a mortgage broker get paid. As a Mortgage Broker is processing the application for the Lender, they will get paid for this work.
The amount usually depends on the size of the Mortgage and varies slightly from Lender to Lender. We are transparent with our Fees and this Lender Fee will be shown on your Mortgages Illustration.
In addition to the Lender Fee, we will also charge a Broker Fee. This varies from case to case.