If your first-time-buyer days are long behind you and you have changed mortgage several times, you may feel mortgage advice is not much use any more.
However, even the most seasoned housebuyer can benefit in a number of ways, from saving time to ensuring full access to all the mortgages available.
Surfing the net
Many people looking for a remortgage go to the internet for information. There is a huge amount of mortgage information available online, some of which is useful but much of which is not. And while it is possible to do a lot of research via the web, it can end up being very time-consuming and may not always give you information on the best product for your circumstances.
Adrian Kidd, an East London-based adviser with mortgage network Mint, believes the internet is making people more confident about researching their options themselves. “However, there is no recourse if things go wrong,” he warns. “You can look at your computer screen until your eyes go square, but you need to know what you’re looking for from the beginning to avoid getting totally bogged down. Your adviser can help you do that.”
Kim Barrett, proprietor at Essex-based IFA KS Barrett Associates, agrees. “The internet is one-way information – it doesn’t communicate,” he says.
Tamsin Hemsley, media relations manager at Nationwide Building Society, also advises caution. “Web-based information should never be treated as advice. The internet should be treated as an educational tool only, and if you require specific advice on the mortgage that best suits your circumstances, you should contact an adviser.”
Making your mind up
There are thousands of mortgage products available, but you canÂ’t apply for a sizeable proportion of them without going through an adviser. Some of these, especially the larger firms, have the clout to get exclusive products from lenders that beat any other products like them in the market. If you apply direct to just one lender, your mortgage options will be limited.
Accord Mortgages is an adviser-only lender, and managing director Linda Will believes customers end up with a better deal as a result.
“ There are so many products and lenders in the market that if you restrict yourself to the obvious high street names you will miss out on a stack of products and services which might suit you better,” she says.
It is also difficult to know how to compare mortgages accurately – do you look at pay rate, lifetime cost or cost over the first two years? What about initial fees, or exit fees? This will depend on your individual circumstances, explains Will. “An expert can narrow down your needs,” she says. “Brokers have a number of tools at their disposal, including sourcing systems which use filters to find the most suitable product – for example, you might want to avoid high initial fees like application fees if cash will be tight for a while. You would need a lot of time and in-depth knowledge to achieve as good a result on your own.”
Mike Fitzgerald, sales director at Brentwood-based broker Brentchase Financial Services, agrees. “If a person needs to remortgage, they can of course go to their current lender and ask what they can offer, or they can walk up and down their high street and ask the various lenders what is available,” he says. “But if they visit a good independent mortgage brokerage, they can access a selection of over 16,000 loans that are updated daily.”
Be independent
Some mortgage advisers offer a panel of lenders – say, a choice of 10 or 15 – but independent brokers have access to all lenders and offer you the option of paying a fee for their advice. Some brokers charge a percentage of your mortgage or a fixed amount, while others adjust the fee on a case-by-case basis, so it’s always worth trying to negotiate .
Hemsley says the fact that many brokers do charge fees should not put people off. “Many consumers, especially the more financially savvy ones, know that even if they have to pay a fee to the broker, they can save money by remortgaging to a new deal which will make them much better off,” she adds. “Brokers have access to the whole of the market and are able to match a mortgage to a client’s needs, taking into account their present circumstances and their future requirements.”
An independent financial adviser (IFA) will also be able to help you out in other financial areas too, like pensions and insurance. Will says: “It is an adviser’s job to make you think about your money, and about where you are likely to be in five years.”
A good adviser will also keep an eye on your finances and alert you when the special offer period on your mortgage is due to end.
Consider your options
Lenders say seeking advice before choosing a mortgage is becoming increasingly popular.
“ We have noticed that more people are going to brokers since they became regulated in 2004,” says Skipton spokesman Colin Dale. “It now takes longer to have a mortgage interview with a broker because they have to follow a set procedure, so going direct can be quicker but about 60 per cent of our applications come through brokers.”
Hemsley concurs. “Consumers still want advice when choosing a mortgage and there is evidence that a greater number of people are now seeking advice from intermediaries than ever before,” she says. “In addition, the market appears to be segmenting, with many intermediaries now offering a fee-free service in order to be able to stay ahead in a competitive market.”
Kidd sums it up: “A broker can prove that you have chosen the best-value product for your circumstances,” he says. “A lot of people don’t have the time for financial affairs – sorting your finances can be very stressful and so they get shoved to the back of a long queue as people juggle job and family. Using a broker means huge time-saving, peace of mind, and ultimately the best deal for you.
