Whether you're a first-time buyer, moving home or looking to remortgage, sifting through the thousands of available mortgage deals can seem daunting. If you’re feeling overwhelmed, it might help to talk to a mortgage broker.
A mortgage broker (or mortgage advisor) will search the market for you. They're there help you to choose the best possible mortgage deal. While banks will only offer you a mortgage loan from their own range, an independent mortgage advisor will look at all available options from hundreds of lenders, ensuring you get the best rate according to your circumstances.
Yes; with thousands of mortgage deals on the market, it can be hard to work out which one is right for you. Therefore, it's a good idea to speak to a mortgage broker at the beginning of your search.
A good broker will be able to look at your financial situation and sort through the deals available to you. They'll be able to find the ones which best match your needs and also be able to tell you which of the deals you're most likely to be accepted for - this can be advantageous, as a rejection can mean that you have to wait a period of time before you can apply again, which can significantly hold things up.
Once you’ve found the mortgage loan that's right for you, a mortgage broker can also help you with the application process. They'll make sure you fill out the forms right the first time and let you know what paperwork you'll need to complete your application.
Some advisors will offer additional services for a fee, even negotiating the purchase price for you in some cases.
A good mortgage broker should also be able to offer advice on other products, such as home and life insurance.
There are three main types of mortgage broker:
Tied: Brokers offering mortgages from a single lender
Multi-tied: Brokers offering mortgages from a particular group of lenders
Whole-of-market: Brokers offering mortgages from the entire market
If a broker says they are "independent", they should be offering you a whole-of-market service.
It is usually better to go with a whole-of-market or independent mortgage advisor as they have access to the widest range of products, missing out on only the direct-only deals offered by some lenders.
As well as finding out whether they are whole-of-market or tied to certain lenders, you should also check your chosen mortgage broker is regulated by the Financial Conduct Authority (FCA). This will ensure you receive a certain standard of advice. It will also mean you're able to complain to the Financial Ombudsman should anything go wrong.
Finally, make sure you ask how your broker will be paid.
All mortgage brokers will need to give you a document called a Key Facts Illustration (KFI) about their services. This document will detail how your broker will get paid, usually one of two ways:
Fees: Some brokers charge a fee for their services. They can charge a flat fee or an hourly rate, which will be agreed beforehand.
Commission: Others provide their services free of charge and receive a commission from the lender.
It’s best to ask up front how much you’ll be charged or whether the broker will receive a commission, so you can plan your finances accordingly.
Still unsure? Get in touch or drop into our offices in Preston, Garstang or Southport for more information on what an independent mortgage broker could do for you!
Buying a house is often cited as being one of the most stressful things you’ll ever do. So it's no surprise that most people want to get things completed as soon as possible once an offer has been accepted. The mortgage application process can take some time, but there are some steps you can take to speed things up...
An agreement in principle (sometimes called a ‘decision in principle’ or a ‘mortgage in principle’) is a written estimate from a lender as to how much you can borrow. Having an agreement in principle will help speed up your mortgage application once you’ve found a property you want to buy. It will also give you a good idea of how much money you can borrow, meaning you won’t waste time looking at homes that are out of your price range. An agreement in principle is usually valid for between 60 and 90 days. Some estate agents will only let you view their properties once an AIP is in place, so this is usually the best place to start.
People often underestimate the time it can take to get a mortgage offer. Many also make the mistake of thinking that an agreement in principle is the same as an offer; it isn’t – you can only make your full mortgage application once you have had your offer on a property accepted. You’ll then need to send off the relevant documentation and the lender will carry out a valuation of the property. Only then will you know for sure whether or not you’ll be granted a mortgage loan, so the sooner you begin the application process the better.
An independent mortgage broker like Key Mortgage Advice will help to find you the best deal in the early stages and submit the application on your behalf. This will speed things along, reduce the risk of any errors, and generally make life easier for you. A broker is also on hand if you have any questions or require advice along the way, and because they have established relationships with lenders, it’s likely they’ll be able to iron out any difficulties faster than if you go it alone. Find out more about our services here.
If you aren’t using a mortgage broker, you will need to complete and submit your application to the lender yourself. In both cases, you will need to provide certain documents. Make sure you have these in order in advance – you don’t want the whole process to be held up because you can’t find your latest payslip! You’ll usually have to provide the following for each person applying:
Don’t be afraid to chase up the different parties involved, like making sure the estate agent is allowing the lender access to the property as early as possible in order for the valuation to take place. If you opt for the Mortgage Plus service from Key Mortgage Advice, we will take care of this and liaise with the estate agents, lenders and solicitors on your behalf, so you only need to deal with one person throughout. We’ll also fast-track your mortgage application, so you can be in your new home as quickly as possible.
If you would like to discuss this topic in more detail or speak to one of our independent mortgage advisors about your application, you can find our contact details here.
Trying to get a mortgage can be a daunting proposition, however, it’s not that difficult and there are several things you can do to improve your odds of being accepted. To have the best chance of securing the cheapest deals, you’ll need to have your finances in order before you apply.
Lenders all have their own set of criteria and what makes you attractive to one may not satisfy them all. Generally, they look at the following:
If you’re not registered to vote, you’ll find it very difficult to get a mortgage, even if you meet all the criteria. Lenders use electoral roll data to run identity checks: to check you are who you say you are, that the address you give them is legitimate and that you’re not laundering money.
Lenders check your credit report to ensure that you’re financially responsible. They need to know that you're able to pay back what you borrow. Your credit report shows any overdrafts, credit cards, loans, and mortgages you’ve had in the last six years. It may also include any mobile phone contracts you’ve had and some utility accounts. You can access your credit report for free via Experian, Equifax, or CallCredit.
If there are any errors in your report, talk to the lender(s) associated with the erroneous data and they should be able to amend it for you. If that doesn’t work, contact the free Financial Ombudsman and they will step in to order the necessary changes.
If you’re always in your overdraft, lenders may see this as a sign that you’re not financially responsible. Some lenders may not accept you if you’ve been in your overdraft at any time within the last three months, so it’s best not to dip into it at all, if possible.
As for your credit cards, lenders prefer you to be using less than 50% of your available limit. Yet, they may also penalise you for having too much available credit, as there’s a chance you could suddenly spend it and rack up debt. Try to strike a balance; if you have £5,000 available credit, stay below the £2,500 mark. If you have £10,000 available credit and aren’t using any, consider reducing it a little to reduce the perceived risk to potential mortgage lenders.
Each time you apply for a new line of credit, the provider searches your credit file and this search is registered on your report. Having lots of searches on your file may look like you’re desperately trying to borrow money, and this will turn lenders off. If you must apply for credit, you’ll probably get away with one application, as long as it’s affordable. Don’t use payday loan companies, as some lenders will decline your mortgage application if you’ve used such a company within the last year.
If you have old, inactive credit accounts, these can be seen as a fraud risk. It’s worth closing any account you haven’t used within the past twelve months.
Long-term, stable credit relationships are seen in a positive light by lenders. So, if you’ve had a credit card for a while but recently stopped using it after getting a new one, it’s probably best to keep the account open until after you’ve applied to get a mortgage, as it could be giving your credit score a boost.
This might sound obvious, but did you know that missing just one payment will count against you for at least a year and will be visible on your credit report for the next six?! This could make it extremely difficult for you to get a mortgage.
Set up direct debits for all your accounts to make sure they’re always paid on time. If you’re struggling to keep up with payments, contact the lender before the next instalment is due and often they’ll be able to help and save you from defaulting.
Lenders need to see proof of your income before they can offer you a deal. They may want to see all or any of the following:
Lenders often want original bank statements (not copies printed out at home) so go into your local branch and ask for originals. These can take a couple of weeks to arrive, so it’s best to do this in advance.
It makes sense to have all these things ready to go, as it will save you time and reduce the number of people your application is reviewed by.
Make sure your application form is filled out honestly and accurately. Declare all your debts and give your exact income (don’t round up), as dishonest answers will mean a rapid decline of your application.
For example, if you have £20,000 to put down on a property worth £100,000 (making your loan-to-value 80%), it may be worth coughing up an extra £100 as it will make you more attractive to potential lenders. All mortgages have a maximum loan-to-value. Borrowing just below this will boost your chances of being accepted and may give you access to better rates.
If you get rejected, don’t apply for another mortgage straight away. As with applying for credit, more searches on your credit file will reduce your chances next time and you could end up making the problem worse. It’s best to contact the lender and find out their reasons for rejecting you. They may have their own reasons, but if it was your credit file, go through this guide again and tidy it up before trying to get a mortgage again.
Key Mortgage Advice are an independent mortgage broker with over 17 years’ experience in the market. We can help you through every step of your application and give you the best possible chance of being accepted for a loan. Contact us via the button below to arrange a free consultation. We’ll assist you in getting the key to your dream home: