The world of finance is a fairly straight forward one. It just so happens to be made infinitely more complicated by people trying to sell you stuff! Money really is the root of all evil…. mwahahahahaha.
Easy step by step guide to get what you’re after in the easiest way.
1. Speak to an independent mortgage broker. The key points to consider when choosing a mortgage broker to speak with are;
- Are they truly independent? If you ask this, you’ll either get a yes, or a fuddled through answer as to why it doesn’t matter. At this point, it does matter. Only speak to a truly independent broker.
- Will they meet you for an initial chat about your circumstances with no obligation, no fee and seem nice? If the answer is no, find someone that will/is. There are loads out there.
- Nothing else about the broker matters at this point.
2. Meet broker. They’ll go through a Fact Find process where they ask a ton of questions. Be totally honest with them. Ask them every question that pops in to your head. They should be very friendly and helpful. (remember, they are selling their services to you. This is where they pitch for your business.). If they’re not friendly and helpful, take what information you can from them and let them know you’ll be in touch.
- A point of note with a mortgage broker is that they’ll be aiming to carry out an agreement in principle for you. This is a credit check with a bank to ascertain how much money (in principle) they will lend to you. This is totally the right thing to do, subject to you liking and feeling you can trust the broker and that the figures he comes back to you with are within your parameters.
3. Let’s assume at this stage that the broker was friendly, super helpful and has carried out your agreement in principle. Once at this stage, you can park your mortgage thoughts and can bat off any approaches and selling techniques to discuss this with you. You’ve got your AIP (agreement in principle) and it’s all under control. You don’t need to sit down with anyone else and I would recommend politely declining any such advances (we’ll get to the mortgage part again at a later point).
4. You now know the general cost of your mortgage on a monthly basis along with the setup costs. You also know the bank will lend you the money (in principle) and where your maximum price point will be. Now to find somewhere to buy.
5. Offer accepted! Woohoo. Now is the time to find the best mortgage deal. This is where the monthly payment gets decided. So go back to your broker, tell him you’ve found a property and ask he sends you over the best deal possible as of right now.
6. The broker may not be able to offer you the best deal, but they offer the greatest chance of getting the deal through to completion. Differing independent brokers rarely have different deals; but HSBC will and so may your own bank. The difficult thing here is that going direct to a bank you will be dealing with someone that doesn’t have any choice other than their own products and their targets are to get applications submitted. Not always so fussed if your deal doesn’t go ahead after that. Imagine you go through the rigmarole of submitting an application to then discover the bank doesn’t actually lend on flats over commercial premises. But you’ve paid the valuation fee and it’s at that point they find out! Lots of time and money wasted. I’d go with a bank direct only if there is a big difference in prices between them and a broker. You don’t always have to pay a fee to an independent broker; many won’t charge. Some do charge though and can range from £150 to £1500 +. £150 is often fair; they do also get a commission from the lender they place your mortgage with.
Nothing about getting a mortgage is any more complicated than that. Any questions please do ask!