What Does A Mortgage Broker Do?
- Independent mortgage brokerage
- Access to the whole of the market
- Helping you to achieve your property related goals
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What Does A Mortgage Broker Do?
Christian Duncan is here from Oval Finance to explain the role of a mortgage broker.
What does a mortgage broker do?
Ultimately, a mortgage broker is there to work for you to secure a mortgage. When they make recommendations, they factor in your future plans and make sure the product suits what you’re looking to do.
We take into consideration things like having children in future, local schools, Ofsted reports, how many bedrooms you need, that kind of thing. We also talk to you about your job, any plans to change your work and whether that will affect your location.
All these things will dictate the type of mortgage you take and how long you fix that mortgage deal down for. A lot goes into it, but a mortgage broker secures the finance for you and makes the process as stress-free as possible.
We also don’t want to set up any debt if someone hasn’t got provisions in place to pay it back should something go wrong. For example, if a self-employed joiner takes a mortgage and has an accident, how will they pay their mortgage? We can put things like income protection and other policies in place to pay the mortgage if someone is unable to work.
With life cover in place, if they pass away during the mortgage term that can pay the mortgage off or leave money to family and friends. Most people think a mortgage broker’s job is to arrange a mortgage – but actually, a lot more goes into that.
What is the difference between going to a mortgage broker like yourself versus your local high street lender?
The biggest difference is the service. If you come to us, you will only deal with me. You’re not going to be passed around different departments.
If you go to your own bank, you’ll need to make an appointment and wait for that to come around. You’ll have to go in and sit down, whereas we’re very informal and make it as relaxed as it can be. There’s no shirt and tie approach to mortgages anymore. Quite often you can find me in shorts and a t-shirt – that’s what I’m comfy in.
The other big difference is the products available to us. Perhaps you’ve banked for 20 years with a high street lender and you go to them thinking they’ll look after you. But they can only advise on the products that they sell.
If that lender only provides two and five year fixed products, that’s all they can offer you. But with a mortgage broker we find a product that’s tailored around your needs. We have access to many, many different lenders.
There’s also more that goes into that around affordability, property type and bad credit. There are lots of ways mortgage brokers have the upper hand over a high street lender.
What services does a mortgage broker offer?
We work with your estate agents, solicitors, surveyors and anybody else involved in that house buying process.
I’ve got a client at the moment that’s going through a divorce, and I’m dealing with the legal part and speaking to the ex-husband through the solicitors to make sure everything goes smoothly for everybody.
You won’t get that service on the high street. They’ve got a policy to follow and it’s very black and white. We can step outside those remits and support the process.
We will even do the viewing with a client if it’s local to us. I’ll give the client my honest opinion on the property and look at comparable data on Rightmove. We can ascertain what the property’s worth based on its current condition.
Most First Time Buyers really appreciate that help, because it can be daunting. Some estate agents can be quite intimidating. There are some really good agents out there, but others can put pressure on people when it shouldn’t really be done that way.
First Time Buyers are actually deemed as vulnerable clients in the eyes of the Financial Conduct Authority, so we have to make sure they are adequately protected and give them clear and concise advice.
What is an Agreement in Principle? Can you help out with one of those?
An Agreement in Principle (AIP) is the same as a Decision in Principle (DIP). Clients might come to us in a panic having had an offer accepted on a property, and they need a Decision in Principle now.
We’ll always try to help where we can, but the best scenario is where a client comes to us when they start thinking about buying a house. We can sit down with them and do a Fact Find to get their address history, employment history, look at payslips and bank statements and discuss their plans.
We can then confirm how much they can borrow over however many years, and compare that with their budget. We then go to a lender and submit the Agreement in Principle. That then gives a certificate confirming that they can borrow a certain amount based on the information provided – subject to underwriting and property valuation.
We can’t secure the product until we go to full application, but it does give you a broad idea of what your payments will be and what property prices to aim for. That’s advantageous for the client.
When they turn up to view a property with a photocopy of their ID and the Decision in Principle, if they like the property and decide to put an offer forward, they’ve got everything they need. They’ve got all their ducks in a row and are serious buyers – they’ve come prepared.
Do you find that people come back to you for remortgaging or to invest in a Buy to Let property?
Yes, a lot, which I’m eternally grateful for. One of the hardest things in business is attracting new customers. We’ve been very fortunate in that we’ve got friends, family, social media and the website to help drive business.
People do stick with us. We’ll arrange a mortgage for a First Time Buyer and six months before their current deal ends I’ll see if we can help them remortgage, or borrow more money for an extension – whatever their plans might be. They might want to move and buy a bigger house.
Equally, we also deal with a lot of landlords. I’ve got portfolio landlords on my books and we’ll monitor their property spreadsheets to look at opportunities for the future. Repeat business is massive for us, and we love building that relationship with customers.
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Another important part of the process is mortgage protection. Can you advise on that?
People get excited about buying houses, as stressful as that can be, but nobody really wants protection. I hope that everybody that I’ve sold protection to never needs it.
But, unfortunately, we each have an expiry date and protection is there for peace of mind. Life insurance, critical illness, income protection, family income benefit. There are loads of different products out there to protect people.
I’ve helped people that have medical disclosures or have been declined elsewhere. It’s always worth having a look.
If we deal with a client and they just don’t want protection, that’s absolutely fine. We will never push anybody into it, but it’s so important that they have to decide to sign a disclaimer. It says they are accepting this mortgage and they understand that if things go wrong, they’ve refused our advice. That’s how serious protection can be.
What else can you help with as a mortgage broker?
We’re there from start to finish, from putting your offer in to getting the keys. Obviously, there’s a solicitor process, and people know what solicitors can be like at times.
Over the years, we’ve managed to secure a really restricted panel of legal providers that I’ve used personally. I’m in the middle of moving house myself and I’m using one of those solicitors. I wouldn’t recommend anybody that wouldn’t deliver a good service for our clients.
When you use a solicitor that we’ve recommended, we can be more involved in that process and help with the paperwork. We can make sure they’ve got all the relevant ID and bank statements because we can share information with them.
Also, if there are any problems, we may need to go back and renegotiate the purchase price. We can help with that and hopefully take as much stress away as possible.
When should I see a mortgage broker? At what stage?
Whether you’re already a homeowner or not, come and see us the second that you think about moving or buying a first house. Don’t start by looking on Rightmove or Zoopla – as you could set your heart on a particular area and value and then realise it’s not affordable or not possible.
Or, you could find that a property is really affordable and you could in fact have gone up to the next bracket. As soon as you think about making a move, reach out, or, if you’re already a homeowner, call us six months before your mortgage is up for renewal. Let’s start looking at deals on the market and talking about your plans for the future.
Although we might not initiate the process immediately at that six month mark, we will look at your bank statements and account conduct. We help you envisage any future problems with your remortgage.
Finance isn’t taught in schools and it’s something I’m passionate about. If somebody’s parents have had bad credit or haven’t managed money very well, that often passes down through families – the education system is failing people. It isn’t helping people to learn about finance and mortgages. But you can lean into a broker to get that education.
Does it cost for an initial consultation or conversation with you?
No, absolutely not. There are firms that charge for their time, but we don’t. We’re free of charge. You can sit down with us face-to-face. I’ll buy you a coffee and we’ll have a chat.
Equally, some people are really busy. They prefer to talk over a telephone call or Zoom. Whatever works for the client, we shape our process around that. We wouldn’t charge you anything.
I’ve just had a mortgage offer come through for a client this morning and I’ve been speaking to him for 18 months. We actually met on TikTok, as we advertise there. I’m more than happy to work with clients that are open to advice and want a step in the right direction, even if they’re not ready to buy yet.
Even if somebody went bankrupt today and called me for help, I’m there. I’ll tell you what you need to do over the next 24 to 36 months so that when you’re ready to move forward, I can help you.
I like to think we can help everybody that comes through the door. We will always give you advice and some pointers on what to do, so you can come back in a position where we can help you.
What else do we need to know about working with Oval Finance?
Customers often don’t want to pick up the phone because they don’t want to waste our time.
But if you’re serious, I’m more than happy. If I spend an hour giving you advice and you come back in 12 months, I’ll be delighted. It’s an education process.
When we have an initial call with a client, we make sure they’re a suitable fit for us. And that works for the client, too, because you hear of people having bad experiences all the time.
If your broker is not flexible about taking your call and doing business with you, what’s the service going to be like with them? Treat that first call as a way to learn what you need, and make sure that broker is a good fit for you.
You can ask how many cases like yours they have done before. Have they ever come up against problems? That helps you make sure they’re experienced. If you’ve got specialist circumstances, like bad credit or a quirky property or you’re self-employed, you need to check they can do a good job.
Brokers specialise in certain things and nobody knows everything. If I haven’t got the answer, I’ll find out. I don’t know every lender’s criteria back to front, but I know
what will and won’t work.
We’re registered with the FCA – always check a broker out to make sure they are registered and that they are who they say. Look at reviews on Google or Trustpilot, to see what their customers say.
See how frequent and recent those reviews are. If they’ve not had a review for three years, is it still even the same business? Do the same people run it? Check the firm is suitable, because you’re probably going to be working with them for a long time.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.
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