Cynics are said to know the value of all costs and nothingness. Or, as another friend of mine once said, “I want Swedish service at American prices”.
When inflation spikes, it’s easy to focus on the actual cost of an item, not its value.
Let’s take a look at your own mortgage and the benefits of using an independent mortgage broker to navigate your issues and give you some examples of that. can add up to £4,000 in just five years.
You’re a captive audience when we walk into a high street lender. They know that and they know the price doesn’t have to be competitive. Because I used to go to the bank with my parents.
Today, most of that relationship is faceless, and in a call center, the alone time and frustration of standing in line is as expensive as the fees.
When you use a high street lender, you miss out on thousands of available rates, flexibility, and competitive fees that mortgage brokers have to offer.
Don’t worry too much about advertising in the “no commission” window. Product fees range from £1,495 to nil, but the overall deal you actually get is what counts. £1,752 higher over the year. Of course, you can add it to your loan, but you will pay interest for the duration of the loan.
Most mortgage lenders offer income multiples of 4.5 times the client’s gross salary, but some lend as much as 6.5 times, especially for professionals.
If you have a bad credit history, some banks will ignore you completely, others will be fine if you have 3+ years of grace, and others will just talk.
Some lenders have mortgage terms up to 35 years, others 40 years.
If you decide you want to have an interest only mortgage, you’ll find the doors closed at many high street lenders, but what’s available to brokers is a minimum joint income of £100,000, or a joint application of £75,000. permits interest-only mortgages for Loan values for interest-only loans also range from 50% to 75% elsewhere.
Some lenders are also inflexible in the amount of capital they need to have available on the home if they want an interest only mortgage, with some trying to keep a minimum of £300,000.
Comparing loans and value options (mortgage as a percentage of home value), there is a big difference. Most lenders offer around 95% of his LTV, but some lenders up to £600,000, and when he borrows at that level he lends up to £400,000. Remember, the lower the loan amount, the higher the loan value you can apply for.
There is also a maximum loan amount of £10,000,000 for one lender and £750,000 for another lender.
Many of these are very important when applying for a loan as they leave footprints that can jeopardize future loans.
Each application undergoes a full credit check and leaves a permanent record in your credit rating. Lenders don’t like to see this. They’re wondering why you’re applying for a loan and not getting one, so naturally your score will drop and your ability to borrow will decline.
Independent mortgage brokers ask all relevant questions, then do a thorough research and apply only to lenders who will accept you and those with the best rates. This is called a decision in principle and does not affect your credit score. Then you can go find your desired home.
Then they receive the application and deal directly with the lender, avoiding having to wait in line. Because of the survey at hand, the savings are also enormous. Working less for more profit is always a bonus.
:: Peter McGahan is Chief Executive Officer of Worldwide Financial Planning, an independent financial advisor licensed and regulated by the Financial Conduct Authority. If you have any questions regarding mortgages, please email His Director of Mortgages, Pat He Greene, at firstname.lastname@example.org or call 028 6863 2692.