The reasons to invest in a mortgage broker are innumerable. The problem is always in succinctly explaining exactly why a mortgage broker is not a costly and superficial expense when purchasing a home, but can actually save home buyers money. Most simply, people do not always realise that spending extra money when they are already spending so much on a mortgage or new home is a prudent move. Even amongst those who do understand the value of investing in a mortgage broker, the temptation to forego further expenditure can prove too much. The fact is though that foregoing the extra expenditure, if there is one, of seeking the advice of a mortgage broker can also prove financially far more costly. Never is this truer, or more likely to become true, than when the person or people buying a home are first time buyers.
Free Mortgage Advice
Fortunately, expert advice needn’t be expensive. The Money Saving Expert website, for example, features a very useful and completely free mortgage guide for first-time buyers. The guide provides would-be buyers with some good, general advice about how to go about securing that first-time mortgage. The problem with the guide, or any guide for that matter, is that the advice it contains is general advice; no guide can advise you specifically. Nor can a guide answer your questions directly or explain anything you do not fully understand. Hence, guides are a fantastic place to start, but your research should never end with them.
Fortunately, many mortgage brokers also offer free mortgage advice which, if you are a first time buyer, can prove invaluable. How can brokers afford to offer free advice? The answer is that brokers do receive a fee for the advice they offer, but that the client is not responsible for paying this fee. In some circumstance, mortgage brokers work for a referral fee paid by lenders. The fee itself is most often worked out as a percentage of the mortgage.
Mortgage broker David Sharples of Search Mortgage Solutions explains how he and his business have, thus, been able to grow their business upon this model: ‘We built our business on the grounds of offering completely free mortgage advice and, by taking this approach, we’ve been able to expand from our beginnings in Manchester to opening offices in London, Birmingham, Leeds and Liverpool. Offering free advice makes our services accessible and ensures that we’re not taking money away from those much needed deposit funds. As far as we’re concerned, it’s a no brainer as it allows us to offer the advice consumers need without having to price ourselves out of generating many of the referrals and enquiries which we receive.’
Advice for Young Buyers Hoping to Begin a Family
Only a few days ago, the Telegraph Newspaper reported a story about how many mortgage lenders and banks are essentially ‘blocking’ mortgage applications submitted either by pregnant women or by those hoping to begin a family. Mortgage providers are accused of making ‘blanket assumptions’ about potential lenders based on notions that once couples begin families they will struggle to make their mortgage repayments.
For many young couples hoping to secure a first-time mortgage, avoiding or preparing for these potential hurdles can seem impossible. What’s more, submitting numerous applications only to be denied by potential lenders for nothing more than wishing to begin a family, can even negatively impact upon a person or couple’s credit rating and further hamper any chance they have of securing a mortgage. A mortgage broker can, hence, save first-time buyers a lot of time, effort, disappointment and even any potential damage which might otherwise be caused to a person’s credit rating by discussing these issues with a potential lender or couple and best preparing them before an application is even submitted.
If you are considering buying for the first time, now is a very good time to do so. As recently reported via the Guardian Newspaper website, ‘the mortgage market has improved considerably over the past 12 months – even for those with very small deposits’ and, as I have mentioned, rates currently stand at a historic low. That said, this can place pressure to buy upon potential buyers, which can result in individuals and couples taking risks they otherwise would never take. And buying a home should never be a gamble. One way to make the most of the present market without taking a risk is to seek the advice of a mortgage broker, safe in the knowledge that a broker has no hidden agenda.
Mortgage brokers rely on their clients to make a living. Hence, their first duty is to their client. Consequently, the advice they provide will always be the best for you – not the best for any particular lender or outside agency. This coupled with the fact that brokers are experts not just in mortgages, but in deconstructing the spiel mortgage lenders are so good at using, means that seeking their advice is not just a wise decision, but often a necessary decision for anyone wanting to enter into a mortgage agreement fully understanding where they stand and what they are buying into.