In the 1990s many predicted the death of the financial advisers. Various financial institutions starting offering “direct” products—you can buy ISAs, pensions and a myriad of other products online. But mortgage advisers survived and thrived. And they will survive the next scare too—that of robots replacing financial sector jobs
Independent mortgage advisers provide unbiased, impartial advice. They can scour the whole market for the best deal. In the words of Jane King, an independent mortgage adviser from Ash-Ridge Private Finance, “An Estate Agent represents the seller only and bank staff only represent one lender”.
In addition, banks will invariably try to cross sell other products, such as current accounts and insurance. Whereas, estate agents often suggest that you’ll be more likely to be put forward as the “preferred buyer” if you use their financial adviser. This is illegal, so make sure they know you know.
Cut the admin
Mortgage advisers will do all the paperwork. You’ll have to provide supporting evidence but you won’t have to fill out any forms.
Once you have decided the best mortgage for you, the process should take no more than 30 minutes on the phone. Jane King again, “purchasing a property is probably the biggest financial commitment you will ever make, so why attempt to do it alone?”
Getting your mortgage approved
Reluctant to raise interest rates, the Bank of England has tried to curb out credit addiction in other ways. A raft of new rules, introduced by The Financial Conduct Authority, have led to ever-tightening mortgage-lending criteria.
This has meant customers who, in the past, may have been granted a loan are now being rejected and everyone is facing closer financial scrutiny, with lenders looking at everything from childcare costs to pension contributions.
If your mortgage requirements are straightforward—for example, you’re borrowing a low multiple of your income—your mortgage is likely to be approved. However, if your needs are more complicated, for example, you’re applying for a Buy to Let mortgage or you have a poor credit rating, your mortgage could prove far harder to arrange.
Mortgage advisers will know which lenders to approach. In other words, the ones who are most likely to approve your mortgage. This can save a huge amount of legwork, and can make the process far less stressful.
Advice is worth paying for
Getting the best mortgage can save you tens of thousands of pounds in interest, so getting good advice is a must.
Jane King’s words echo my own thoughts, “a good mortgage adviser will not only consider your position today but will take into account future plans and objectives”.
How to find the best mortgage adviser
Almost 70 per cent of home loans are arranged by mortgage advisers, but that doesn’t mean everyone who uses an adviser is getting the best deal. There are three key things to consider.
Firstly, do they have a good reputation? Ask friends and family about their experiences. If you still draw a blank, look at Google Reviews and their other online ratings (e.g. Trust Pilot).
Secondly, are they truly impartial? You should always choose an independent adviser (as opposed to one who’s “tied”).
And, finally, how much do they charge? Some charge a fixed fee and some charge a percentage of the loan. I always choose the former, but that’s just personal preference.
A final piece of advice
Most mortgage offers are valid for six months. So, if your fixed-term deal is coming to an end, you can arrange a replacement deal months in advance.