An Introduction To Mortgage Brokers!
In this episode of The Mortgage Mum Podcast, Sarah explores the role of a Mortgage Broker.
What is the role of a Mortgage Broker?
We’re here as the middle woman (in our case) between you, as the client, and the banks, otherwise known as the mortgage lenders. A Mortgage Broker is there to translate your information to a lender so that they understand your needs quickly and efficiently.
It’s our job to look at the whole market for you. You might consider visiting a price comparison site or just going to your bank, but what people don’t realise is that banks can vary hugely in how they will see you as a potential borrower. One bank might lend you four and a half times your income; another might lend you five and a half times your income. And if you’re a certain type of applicant, a professional for example, you might get even more.
Every bank also has different criteria, and may or may not accept your personal situation – are you self-employed, a contractor, recently taken maternity leave or have you had a pay rise? Are you buying property to let? Every lender has a different attitude to risk and your personal situation.
What will a Mortgage Broker do?
Our job is to get all of your information to help find you the right mortgage. These days you can do almost everything on your phone, including scanning and sending documents to us.
It’s much easier than it used to be – there’s no need to go into your bank for statements and drop the documents off to your broker. We do all the work online so it’s easy and time efficient.
What’s important, too, is that we carefully explain why we have chosen a mortgage lender and what it is that makes them the best choice for you. It might be cost-related, linked to their criteria, or something linked to your future goals.
You come to a broker with a problem, we find the solution and give you all the knowledge you need. We’re also here to answer any questions – no matter how simple or complicated. Your mortgage is your biggest financial commitment, so you need to understand it.
How does a Mortgage Broker make money?
Some Brokers don’t charge a fee for finding you a mortgage deal – but in our opinion you may not get the same level of service. We do charge a fee – and we are completely clear with you from the start about the cost and when you need to pay.
We earn money from the broker fee, and we also gain a commission from the lender. At no point does that influence the decision of a broker and it never should. You should feel completely confident and have all the evidence to support your broker’s recommendation, and you will see our commission on an illustration document called an ESIS. This should be presented to you before you’ve gone ahead with a Decision in Principle and a mortgage application.
Mortgage broking is a lot of work, and private lenders often want to know even more from us. So it’s in your best interest to speak to a broker that understands what the lenders are looking for.
Do brokers offer more than mortgage advice?
A good broker can talk to you about other services around the mortgage: a solicitor, mortgage protection, surveyors, will writers… We have contacts in all of these areas.
Every mortgage broker should talk to you about protection. There are too many instances where people haven’t protected their mortgage and the worst happens: they are diagnosed with a critical illness and don’t have the protection in place to let them stop working, spend time with their children or have the flexibility to manage hospital visits.
If something awful happened to my husband, I wouldn’t want to just carry on working. Protection gives you the space to do that.
Will a mortgage broker be there after I’ve got the mortgage agreed?
You don’t just get a mortgage and, 25 years later, it’s paid off. You need to review it regularly, to make sure you still have competitive rates. When you sign up with a broker in The Mortgage Mum, we’ll look after you for life. We’ll let you know when your deal is coming to an end, and if you’re thinking about remortgaging for home improvements, buying a bigger home or downsizing, we’re here to explore your options.
When should I see a broker?
As soon as you’re thinking about moving, buying property, remortgaging… speak to a broker. We can give you pointers, an idea of affordability and other advice, even if it is too soon to start applying for a deal.
At the very least you need to have spoken to a broker before you start looking at houses, because otherwise you’re going to face real urgency when you find a property that you love. You’ll need to put an offer in and the agents will want to see a Decision in Principle, or confirmation that you can afford the property and are ready to go.
Why is Southend-on-Sea a popular location to buy property?
I’ve lived in and around Southend all my life and I think there’s something wonderful about living by the sea. I love to look at the water – it’s very therapeutic. It’s special to bring children up around the sea, too. And I think that’s what draws people here. We’re accessible by train lines to London, it’s not too far to commute or visit.
As well as lots of beaches, there are also some really up and coming areas where there are great shops, bars and restaurants. In terms of property, house prices really do go up here, especially in Leigh and Chalkwell. Southend is not an expensive area, but it holds its prices well.
Leigh-on-Sea has been voted as one of the happiest places in the UK to live for several years running. There’s a balance of everything: woods and greenery, parks, the sea front. And there’s a child in all of us that loves Adventure Island – whenever I take the kids there, we have a brilliant time on the rides, and it has got so much bigger and better than when I was younger.
Paddleboarding has become the new thing and we do yoga on the beach on a Sunday. There’s a real community here. It’s a pretty special place. So I think that’s why people buy property here, and with a University nearby it’s also a good market for rental.