Finding independent mortgage advice is not difficult as there are plenty of mortgage professionals keen to help out and make a sale. It is very important though if you want to make the right decision about which loan is right for you, to take good advice.
If you have time and are fairly numerate, it's possible to research the offering in magazines and on-line. You can compare promotional offers, costs, interest rates, fees, pay-back terms and how much the lenders might lend.
There are an enormous number of variables to consider. For that reason, consulting a mortgage broker or advisor can offer significant benefits.
Mortgage brokers or advisors that are independent will have access to all the mortgages on the market. They will not only know the differences between the lenders – how responsive they are, how flexible, how generous, but they will be up to date with the rates and offers. They will probably also be able to sell you other relevant ancillary products like household and life insurance should you need them.
Some mortgage advisors and brokers offer a free consultation, taking their earnings from the commission they earn when they sell a mortgage. Others will charge, sometimes up to £750 for a consultation. You always have the right to know how they are being paid.
Since 2004 the giving of personal financial and mortgage advice has been governed by the Financial Services Authority. Companies or individuals offering personal financial or mortgage advice must comply with the Financial Services Act or they are breaking the law. Many companies offer consultations on an ‘information only' basis and you would need to formally agree to having requested to be advised on financial matters. Adherence to the rules of the Financial Services Act is called ‘compliance'.
Mortgage advice can be sought from a number of sources:
- A tied mortgage adviser: These work – and will therefore recommend products – on behalf of just one lender.
- A multi-tied adviser: These will recommend products from a limited range of lenders.
- An Independent Financial Adviser (IFA) or Independent Mortgage Advisor: These will recommend products from the whole market.
You are perfectly entitled to ask on what basis your advisor is operating.
However, be warned that if you go to see an Independent Mortgage Advisor, they will be independent on mortgages but perhaps not insurance – and 78 per cent of homebuyers take insurance alongside their mortgage.
By researching and reading it is relatively easy to glean a certain amount of useful information but by seeking personal mortgage advice from a mortgage advisor, you will be gaining the expertise of someone who knows all about all the different first time buyer mortgages on the market, what special deals are on offer, the peculiarities of the one lender versus another and, of course, they will always take your personal wishes and circumstances into account.
Mortgage advice can be given over the phone, by email or in person, different advisors work in different ways. These days they are pretty flexible. In order to give you proper mortgage advice, mortgage advisors will need to a great deal of information about your personal finances . They want to determine that you can and will be able to make the mortgage payments. The last thing they want is to repossess your property if you fail to be able to make the mortgage payments. They will ask your permission before they give financial or mortgage advice.
Some advisors charge for giving mortgage advice and others make their income form commission they earn from selling insurance policies and mortgages. You are quite entitled to ask about what charges will be applicable.
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