Mortgage advisers are useful in most cases but more important is receiving the appropriate mortgage advice. In this brief guide we will discuss if you should get a mortgage adviser and what your alternatives may be.
Should you get a (Digital) Mortgage broker?
Getting mortgage advice seems like a great financial decision because mortgages are hard to understand and the experience gained by machines or human mortgage advisers is very hard to replicate or learn in a few weeks.
You can use a mortgage affordability calculator to work out the basics of the kind of mortgage offer you should receive but this will do little to tell you if you will be eligible for that particular mortgage due to the ever changing nature of mortgage lending criterias.
Mortgages are very competitive and can be very confusing and whilst your bank might offer you some general advice they will generally only be able to offer you advice on the products which they hold.
Why you need mortgage advice and a digital mortgage broker
Mortgage brokers offer mortgage advice. This is something your mortgage lender or bank may not do effectively as they will only be able to provide details on the product they offer.
When offering mortgage advice the advisor will look into your income, expenditure and future plans to determine what type of mortgage is right for you.
If you decide not to take any mortgage advice then you can get an execution only mortgage based on your own research. If anything goes wrong when you get this mortgage or the mortgage does not end up being suitable for you then you will not be able to complain to anyone and get the same amount of liability moved from you to the mortgage broker or mortgage lender had you gotten a mortgage through those channels.
If you did get a mortgage through a bank or digital mortgage broker and found out that you have been mis sold the product then you can report your case to the business involved and after 8 weeks take your case to the financial ombudsman if you are not happy with the resolution the business offers you.
If you decide not to take mortgage advice you could end up with the wrong mortgage product or even worse the mortgage lender rejecting you and damaging your credit score in the process.
Engage a digital mortgage broker
Most digital mortgage brokers are fee free nowadays and this means that you can simply start a conversation with them to understand what your options are and get some basic advice which will then inform you on if you should be moving ahead or if you still need to take some actions to get you there such as improving your mortgage affordability.
Not all mortgage brokers are equal
Some mortgage brokers are tied to specific lenders and this is why your first conversation with a mortgage lender should be you asking them about their initial disclosure document which will tell you the key financial information you need to learn about them.
Other mortgage brokers will have access to some specific deals from different mortgage providers and some mortgage lenders will only have access to deals from a limited number of mortgage lenders.
You should also be aware of mortgage brokers who call themselves “whole of market “ mortgage brokers. These mortgage brokers don't actually cover all the mortgages in the market but cover enough where the mortgage lender can use the term “whole of market”.
The other benefits of mortgage brokers
- Mortgage brokers will only recommend suitable products and guide you to the ones you will likely get accepted for
- Mortgage brokers will show you products you won't qualify for which will be cheaper and let you know what you need to do to qualify.
- Mortgage brokers will also look thoroughly at your finances to be sure you can afford the mortgage.
- Mortgage brokers will have exclusive deals to which you might be able to benefit from.
- Mortgage brokers will be able to do your application for you and check the application before you submit.
- Mortgage brokers (as well as mortgage lenders) will give you a key facts illustration document illustrating the product you are getting.
Mortgage broker fees
Some mortgage brokers do not have fees but some do. Mortgage brokers will be required to tell you if they charge fees and how much they charge before you begin working with them.
European standard information sheet
In 2019 the European standard information sheet will replace the key financial illustration document currently being given out by mortgage brokers.
Th European standard information sheet will have additional details to what is currently being offered on the key financial information document.
When looking at a mortgage you should consider
The APR: this will determine the total cost of the mortgage including fees.
The Mortgage deposit
If interest is charged daily, weekly or monthly.
If you have an introductory fixed rate mortgage