Whether you are a first-time buyer looking for a mortgage, remortgaging, looking to move into a bigger home or want to take advantage of the government’s Help to Buy scheme, you have one important decision to make: whether you should use a mortgage broker or approach your bank directly.
In this article, we will look at the benefits and pitfalls of going direct vs using a firm of independent mortgage advisers like Visionary Finance.
Going Direct to your Bank/Building Society
Of course, it is possible to approach your bank or building society and arrange your mortgage directly with them. One of the major Benefits of doing so is that the bank will know your profile as a customer thereby potentially reducing the requirement of supplying supporting paperwork and documentation. They may also be able to offer you a pre-approved lending limit so you will know at the outset how much your lending you will be eligible for. By having a pre-existing and long-term relationship with your bank/building society, however, provides no guarantees that you’ll benefit from any preferential mortgage rates because banks and building societies can only offer mortgages from their product range. A further limitation to using your own bank/building society is that you have to fit their specific eligibility criteria. If your circumstance does not meet the rigid lending criteria you will either be offered a lower loan amount or declined an offer for lending. This lack of flexibility in lending policy, as well as limitations in mortgage products, can mean that you may be paying a higher rate of mortgage interest and not benefitting from the best deal in the mortgage market.
Using a Mortgage Broker
When identifying which firm of brokers you would like to work with, it is important to consider the following:
1. Is the broker independent of all banks and building societies?
2. Does the broker offer mortgages from the whole of the mortgage market or are they tied to a limited panel?
3. Is the broker charging a fee for their service or are you getting a fee-free brokerage service?
Some mortgage brokers are tied to certain lenders only, meaning they are restricted in the number of lenders they have access to, thereby limiting the possibility of you getting the best mortgage deal. As a consumer, your best position would be to engage with a broker who will offer you mortgage options from the whole of the mortgage market meaning you get the lowest rate based on your circumstance. Many independent mortgage brokers charge a brokerage fee which will be payable to them once they arrange your mortgage for you. In addition to the brokerage fee charged, the broker will also receive a commission from the lender. Paying a brokerage fee doesn’t mean that you will receive any special access to rates or lenders because if the broker is whole of the market a non-fee charging broker can do exactly the same things as a fee charging broker. Charging a fee in addition to receiving commission is merely brokers topping up the amount they earn on a case.
Why Visionary Finance?
We have built our reputation on providing excellent customer service, and what makes us an attractive brokerage is that we do not charge a brokerage fee and we are an independent whole-of-market mortgage broker.
Our service offering provides a very convenient solution for our clients ensuring that most of our document verification is done electronically. We also transact with many of our clients by telephone and email allowing their mortgage to be facilitated without having time consuming face to face meetings. We’re able to utilise and leverage our wide knowledge of the market to provide you with a mortgage deal that suits your circumstances. Our expert mortgage advisors can provide you with impartial advice and we take pride in offering a personal service.
We are also specialists in the new build sector and for help-to-buy mortgages. We have built relationships with some of the largest housing developers in the country, offering a tailored solution that helps first-time buyers to get on to the property ladder.
Additionally, we have extensive knowledge in buy-to-let mortgage market particularly since the recent PRA and FCA changes that were introduced in September 2017. We have built an excellent reputation with landlords across London and the South of England. Our knowledge of the buy-to-let mortgage market and the tax implications for landlords puts us in the best position to provide expert advice.
Get in touch with our team today by calling us on 01908 465100.