Choosing an affordable mortgage deal is undoubtedly hard. Whether you are getting onto the property ladder or buying a mortgage for moving home, it is as tricky as to hold sand in the fist. Documentation, a credit check and other formalities seem to be a severe headache.
Each lender follows different interest rates, and therefore you should inquire about it beforehand so that you do not end up with an expensive deal. A mortgage broker in the UK like Shine Mortgages can perform the legwork, which is why you do not need to visit lender to lender to get a rate quote.
A mortgage broker is a mediator who brings you and online lenders together to process a mortgage application. A broker will understand your financial circumstances before contacting direct lenders, who could provide you with deals that suit your budget.
Brokers aim at facilitating you with getting as affordable deals as possible, but you need to follow the following tips to find the best mortgage broker.
Do your homework first
Do not assume that leaving the entire headache upon a broker can help you get a deal suitable to your budget. Though they carry out the legwork, they are not obliged to provide you with the best mortgage deal.
There are various brokers on the market, and you cannot blindly trust all of them. Before contacting them, you should get an idea of the type of mortgages available and interest rates charged by direct lenders. The deposit size varies from mortgage to mortgage. Make sure that you know it beforehand.
Online calculators can help you know how much it will cost you in all. If you know basic facts at the time of applying for a mortgage, you will be able to understand better about the deals offered by a broker.
Look out for a relevant experience
EDUCATION and EXPERIENCE play a paramount role when it comes to choosing a mortgage broker. They are supposed to have a relevant qualification – after all, it is a matter of your finances. One wrong suggestion can have you lost your property. As long as mortgage brokers have a certificate and diploma in finance and mortgage broking, they can start working.
Besides, it would be best if you consider the time they have been in this industry. The longer brokers are in the industry, the better it is. A broker has to contact several direct lenders so that they could provide you with extensive options to choose a better deal. This is where a long experience will work.
Consider their lender panel
Ask about a lender panel to get an idea of the time they have devoted to the industry. A good broker will have a wide range of lenders offering you a lower-interest-rate deal depending on your financial condition.
You will be surprised to know that some mortgage brokers have hardly ten direct lenders on their panel and some have more than 40.
Despite claiming to have scanned the whole market, many brokers have a small panel of lenders.
A limited panel should raise alarm bells because it can restrict your options and you will unlikely get a good deal.
Ask about fees
Even though you think your broker is offering you a good deal, having multiple alternatives in advance can help you make a better decision. Broker fees also affect the cost of a mortgage.
Ask about the fee structure. Do not forget to compare it with other brokers. Sometimes a mortgage becomes expensive not because of the interest rates direct lenders charge but due to processing fees.
Make sure all options are explained
There are various interest deals like:
- Standard variable rate
- Tracker rate
Under some circumstances, you begin with a fixed rate and then put on a standard variable rate after a certain period.
Each deal works differently. Make sure that your broker explains all pros and cons. A good broker will never put pressure to clinch a deal and will make suggestions based on your financial condition.
Ask for references
Having a large panel of direct lenders is not enough to judge the potential of a broker. To know whether they have satisfied their clients, ask them for references. You will get a better idea of how your broker works.
The final word
Getting a mortgage at a better deal can be a hectic process but not impossible. It does not act as a short-term loan, so you need to be patient throughout the process.
A good broker is one who explains you all terms and conditions from interest rates to processing fees and makes you meet with lenders whose deals are suitable to your budget.