Although there’s been a housing crash there are some people still looking to buy a place as well as those looking to re-mortgage.
I am not going to go into the pros and cons of whether to or not. I am going to try and help people find an appropriate sort of adviser to help them.
A lot of you will just do it all yourselves, probably using the internet. This is great if you know exactly what you’re doing. If not, getting help is no bad thing, as long as you get someone reliable.
There are three basic types of adviser for the residential market:
1. Those that work for a bank and are therefore only selling that bank’s mortgages. This is a ‘tied adviser’. These should make it totally clear that they only offer a very limited number of products. Organisations like Britannia or Woolwich for example.
2. Those that work for organisations that offer mortgages from a number of chosen providers. These are known as ‘multi-tied advisers’ or offering from a ‘panel’ of providers. These advisers will tell you they operate from a panel, but you should ask for a breakdown of how many there are on the Panel and who they are. Countrywide Estate Agents Mortgage Services and Connells Estate Agents Mortgage Services for example, and they will do re-mortgages too.
3. Whole of market. These advisers offer from all lenders that use external mortgage brokers. There are some, like HSBC that do not use brokers. Therefore ‘whole of market’ (WOM) is usually a little misleading. It is in reality just a huge panel. These advisers will make it a real selling point that they offer from the WOM. Usually provided by IFAs. To be truly independent an advisor should give the option for you to pay a fee.
You should bear the following pointsÂ in mind.
Every lender has different lending criteria. Some want less deposit, some want a higher credit rating and some want a high set-up fee. This means that your own bank may turn you down but next door may give you the loan.
Next, before they consider you they will have to do a credit check on you. This checks your debt payment record back 6 years. If you have had problems don’t ‘forget’ to tell the adviser, it could seriously backfire on you. For example, at the bottom of the credit report is a section where suspected fraudulent activity by you can be recorded. So if you lie this could be registered as well. Tell your adviser everything.
So make sure you fit the lenders criteria as fully as possible before allowing the adviser to do a credit check on you (the Agreement in Principle or mortgage promise as it is sometimes known). This is important as each search is recorded on your credit record. Having one or two credit searches registered is not a problem. But if you went to ten lenders in a couple of days and they all did checks on you it can be detrimental to your score.
Some people want to deal with their bank. This can be good, you will get a deal, maybe not as competitive as some but the adviser will know his/her products inside out and how make the application to ensure you get the money.
If you want a better deal then a ‘panelled’ adviser may be good because they will know a huge amount about each lender on their panel to once again put forward your application in the best possible light. A few of these may charge an ‘Admin fee’ on top of all the other fees. Ask if there is one.
Going to an IFA will identify the best deal for you, but no-one can really have more than a working knowledge of all those lenders. So they tend to have their own ‘unofficial’ panel. Once again an admin or broker fee may also apply.
If you don’t know where to start, ask your family and friends if they know of anyone. Failing that find a local IFA or even drop in on your local estate agency and see what service they offer. Most importantly find one you think you can get on with, because getting a mortgage these days can be fraught with problems.
Originally posted 19/07/2009