Going to one lender might seem the easiest way to narrow down your choice of mortgages, but it can still take hours to find out if you qualify and, even if you do, you might not end up with the best deal. If you are set on finding the best mortgage it’s also important to note that often the best headline mortgage rates often come with the steepest arrangement fees, so it’s essential you look at the overall cost of any deal rather than basing your decision on the rate alone. Remember too that the smaller the deposit you have, the more restricted your choice of mortgages will be. Lenders usually reserve their best deals for those with bigger deposits to put down, so the more you’ve saved, the wider the range of mortgages you will be able to choose from.
Researching what’s on offer
With all these different factors to consider, it makes sense to shop around the whole of the mortgage market rather than focusing on just one lender. Of course, most of us simply don’t have the time to do all this research on our own, which is why many people opt to use a mortgage broker.
The main advantage of using a broker is that they can do all the leg-work on your behalf, finding the best mortgages you’re likely to be eligible for, and advising which are the best deals for you based on your individual requirements. They may also have access to deals which aren’t available directly from lenders.
Another benefit is that once you have chosen the best mortgage for you based on their recommendations, they can support you through the application process, telling you what sort of paperwork you’ll need to provide the lender, such as proof of your income and outgoings, and advising you on how long everything is likely to take. If there are any delays, they will be able to chase things up on your behalf, and will have often built up relationships with the lenders they deal with, which can help speed everything along. Mortgage brokers must be regulated by the Financial Conduct Authority, which provides you with protection if you are unhappy about the advice you’ve received.
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Not all brokers are the same, so it’s vital to establish exactly what they offer before signing up, and whether you’ll be charged for their services before you proceed.
All brokers receive commission from lenders they have a relationship with, but in addition some brokers will charge you a fee for their services, typically either a flat rate, or a percentage of the amount you are borrowing, so make sure you understand exactly how much you’ll have to pay from the outset. Other brokers are fee-free, which means you don’t have to pay any charges at all for their services and get the full benefit of the mortgage deal they find for you.
All brokers must give you a Key Facts document showing how much commission they earn, or what fees they charge. They will also give you a Key Facts Illustration showing all the details you need about the mortgage they’ve recommended you.
Make sure you find out how many deals your broker will research on your behalf too. Ideally you should go for a broker, which can advise across the mortgage market. Some brokers are restricted to just a few lenders, which means you might not necessarily end up with the best possible deal.
See also: Things to Consider as a First Time Buyer
As well as advising on your mortgage and finding the best mortgage for you, brokers can usually look at your insurance arrangements on your behalf. They can help you decide how much life cover, income protection insurance or critical illness cover you might want, so that you’ll be able to keep up with mortgage repayments whatever life throws at you.
They may also be able to recommend buildings and contents insurance, so that your property and its contents are protected from the moment you move in. Lenders will insist on there being adequate buildings insurance in place when you pick up the keys to your property, so it’s essential you have this cover in place if you want to avoid any hold-ups in the property-buying process.
Our thanks to London & country Mortgages Ltd for their assistance with this article. London & Country Mortgages Ltd is the UK’s largest fee free mortgage broker and adviser. Their team of expert mortgage advisers are on hand seven days a week to provide customers with tailored mortgage solutions that fit. To find out more visit their website: landc.co.uk
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