When you first start the process of buying a home, we understand it can be a very daunting process. But when it comes to arranging your mortgage we will do everything we can to alleviate that fear. Before you choose your mortgage broker we have listed some of the questions you might want to ask:
1/ Are you regulated?
All brokers are required to be registered with and regulated by the Financial Conduct Authority. Before you start working with a broker, make sure that you check that they are on the FCA Register. This will help to protect you in the event something goes wrong with your mortgage application.
2. How many lenders do you work with?
Some brokers will work with one lender, some will work with a select group of lenders and some will work with all lenders. A specialist broker with limited reach might sound tempting. After all, they will have in-depth knowledge of those particular lenders. But if you are looking for the best possible deal, a whole market broker will be able to give you the best options.
3. How much do you charge?
Some brokers will charge you a fee and also take commission for the chosen lender. While others will not charge you a fee and will be paid only by your chosen lender.
4. What kind of mortgage can I get?
The best part of working with a broker is all of the insider knowledge they can share. You don’t have to navigate the small print in too much detail, because they can help decode it. Ask your mortgage broker what types of mortgage will be available to you based on your current circumstances. They will also be able to advise you on steps you can take to change your situation.
5. What is affordable for me?
Affordability is key. A good broker will sit down and go through your finances to determine what you can comfortably afford to borrow. If you are applying with two applicants and two incomes, what would happen if one of you lost your job? These are the difficult questions that a mortgage broker will help you to answer so that you don’t become trapped in an expensive mortgage.
It all starts with being honest about your income and expenses on a monthly basis.
If you are self-employed and if you don’t have 3 years of accounts, a mortgage broker can help you find a lender willing to look at your application.
6. How much should I budget for fees?
Buying a house is an expensive business. There are surveys to think about, conveyancing, other solicitor’s fees and your broker fees (if you decide). You may also need to budget for stamp duty and other move-in costs. Your broker can help you to break this down and make sure that you are prepared for the financial implications of taking on a mortgage.
Remember that not all fees will be due at the same time, so you can budget over a few months and ease the impact on your wallet.
7. What deposit do I need?
All lenders will require a deposit, but how much is a hotly debated topic. You might think it’s wise to try to get away with saving as little deposit as possible, but this can lead to higher rates on your mortgage.
The lender asks for a deposit to limit their risk. The more deposit you can provide, the less risk there is that they will be left out of pocket if you default on your mortgage payments. Some mortgage lenders will help you buy your property with as little as a 5% deposit.
8. Can my mortgage transfer to another property?
If you are thinking long term, you might already be planning another move. The idea of a forever home is slipping to the side. More people now accept that their needs will change over time. If you were to want to move house after a few years, check with your broker that your mortgage will transfer to your new property. This can reduce a lot of the fees associated with re-mortgaging.