Why it’s never been more important to seek expert mortgage advice

Why it’s never been more important to seek expert mortgage advice!

This year the pandemic is having a huge impact on our daily lives. The property sector has particularly been a turbulent market throughout the crisis with many lenders changing their mortgage application criteria’s and the reduced availability of low-deposit mortgage deals.  Getting or changing a mortgage is one of the biggest financial decisions you’ll make, so it’s important to get it right.

The mortgage market is incredibly competitive and it can be hard to understand what exactly is on offer.  This blog will help you to understand the routes to getting a mortgage, the need to understand all of your options before making a decision and why expert mortgage advice is so important.

Why is it a good idea to get professional advice?

Even in these turbulent times, there are many different providers with a very wide range of products and rates available to suit a variety of personal needs.  So it’s a good idea to talk to an independent mortgage advisor before making up your mind.

Lenders and brokers must offer advice when they recommend a mortgage for you.  They’ll assess the level of mortgage repayments you can afford, by looking at your income as well as your expenditure, as well as a variety of other factors relating to your personal circumstances.  This means you should end up with a recommendation of a mortgage that best suits your needs.

Although lenders and brokers must offer advice in almost all cases, you may wish to reject the advice and if you choose your own mortgage without advice it’s called an “execution-only” mortgage application.

What are the risks of not getting mortgage advice?

Not taking any advice means you have to take full responsibility for your own mortgage application process and decisions.  This means that you will have no protection if the mortgage turns out to be unsuitable for you later on.

Getting professional mortgage advice means that if the mortgage turns out to be unsuitable for whatever reason, you’ll have more rights if you choose to make a complaint. By law, all mortgage advisers must offer you the best advice when recommending the most suitable mortgage for you.  This means you’re protected and you can complain to the Financial Ombudsman if things go wrong.

If you don’t take advice, you could end up having your mortgage application rejected because you didn’t understand the product criteria and restrictions clearly.  You may also choose the wrong mortgage for your situation, which would be a very costly mistake in the long run.

When to see a mortgage adviser:

A mortgage adviser, also known as an independent mortgage broker, is a specialist professional with in-depth training and knowledge of the market.  They’re able to look at a range of mortgage products which suit your needs.  There are three main types of mortgage adviser:

  1. Some are tied to a specific lender (usually a bank)
  2. Some look at deals from a limited list of lenders, and
  3. Some check the whole market for a wide range of products

‘Whole of market’ advisers cover everything except they can’t advise you on mortgages that are only available if you go to a lender directly.  Some brokers may also have access to exclusive products that are restricted to them only.

Other reasons to use an adviser:

  • Affordability – they’ll help you check your finances to make that you sure you can afford a mortgage
  • Exclusives – they might have access to exclusive deals with lenders, not otherwise available
  • Application – they will complete the majority of the mortgage application paperwork for you, so your application should be dealt with faster and more efficiently
  • Product – they’ll help you take all the costs and features of the mortgage product into account, beyond the headline interest rate
  • Suitability – They should only recommend a mortgage that is the best for your personal circumstances

Make sure that you gather all of your financial information together when you are planning to talk to your mortgage broker.  Use our 5-Step Mortgage Checklist to help you to get your information in order.

Why are mortgages so complex?

There are many different product elements that you need to be aware of and understand when looking for a mortgage.  Aside from the headline interest rate, there are many factors that contribute to the total amount that you repay over time.  Your mortgage broker can help you to understand the best combination of factors to suit your requirements.

Things to look out for:

  • Deposit: the higher the initial deposit, usually the lower the interest rate you are likely to get.
  • APRC: (Annual Percentage Rate of Change) takes some mortgage fees into account as well as the interest rate and expresses it as a percentage.
  • Length of fixed or variable rate deal: do you want to be locked in for a long period. or have more flexibility? There will be charges if you switch out of a deal before it ends.
  • SVR (Standard Variable Rate): the main interest rate that your mortgage will switch to once your fixed rate deal ends.
  • Flexibility: can you make overpayments to your mortgage without being charged and/or can you take a break from making payments?
  • Term: the average period for repayment of a mortgage is 25 years but the total time can be 30 or even 35 years.
  • How often is interest charged?: daily, monthly or annually?

 

So, how do you prepare? 

It is very important to seek professional mortgage advice to suit your personal circumstances and financial wellbeing.  Our mortgage experts then will do the hard work for you to recommend the best product to suit your requirements.  If you would like to find out more, we offer an initial appointment at no cost or obligation to explore the options and can be done in our offices in St. Marychurch in Torquay or we are happy to come to your home, or arrange a remote call via video such as Zoom or Skype.

Speaking to a professional mortgage adviser that works with many lenders is imperative.  For advice on the right mortgage to suit your personal circumstances, please contact the team at Howard Mortgages on 01803 554455 or contact us here.

Your home may be repossessed if you do not keep up repayments on your mortgage.