What are the benefits of using a mortgage adviser?

You have a choice of two mortgages; we’ll call them Mortgage A and Mortgage B. Both are offered by the same lender and are almost identical – except Mortgage B will give you £1,000 cash-back. Which one do you choose?

It’s a no-brainer, right? You’re obviously going to buzz for B – the deal which puts £1,000 in your back pocket.

Sorry, that might be the wrong answer. Why? Because it’s a trick question.

Mortgage B comes with a £999 arrangement fee. Mortgage A has no such charge.
Arrangement fees are usually added onto the amount you borrow and are paid back – with interest – over the lifetime of the loan. In this case, that £999 fee – on a 30-year, £70,000 mortgage – will cost you £1,700.

Mortgage B – even with its £1,000 cash-back – will effectively cost £700 more in the long term than Mortgage A.

Taking on a mortgage is the single biggest financial commitment most of us will ever make. Yet not enough of us seek impartial, reliable professional advice.

Many of us don’t appreciate the potential perils of trying to find a mortgage ourselves. The DIY approach could see you:
  • Get a less than competitive deal.
  • Suffer delays which could see you miss out on your dream home.
The mortgage market is vast and fluid. While you could conduct your own online mortgage searches, and get access to those mortgages that are directly accessible to customers, why not let mortgage advisers do it for you.

Even if you think you have found a mortgage at a rock-bottom rate, you may be forced to think again. The deal that might look good now might be seen as a massive mistake down the line because there are lots of things that need consideration, such as the type of the mortgage, the term, flexibility and qualifying criteria.

Lenders, like lots of businesses, experience peaks and troughs in demand. Sometimes they have backlogs. If you need a mortgage quickly –perhaps because you want to buy a property at auction – you need to know a lender will be able to deal with your application within your timeframe. And, here’s a thing, lenders are not always up front with customers about such things. 

Different lenders also have different qualifying criteria for their products. Some lenders may automatically refuse a mortgage because a potential customer has missed a credit card payment in the past few months, for example. It happens. Others will take a more relaxed view. A good mortgage broker knows each lender’s rules inside out. Consequently, they can stop customers wasting their time on applications that are destined to be rejected. 

This is more important than you might think because mortgage applications inevitably come with credit checks. If a customer has numerous mortgage-related credit searches against their name in a short period of time, it can reduce their credit score. 

Mortgage advisers such as ours, can give you that crucial information, because they have good lines of communication with the different lenders and its advisers know how well-placed a particular lender may be at any given time to meet your requirements.

This guide is intended as a summary only and does not constitute legal advice given by The Nottingham Building Society. No reliance should be placed on this guide and you must make your own decisions, we recommend that you seek legal and/or financial advice if you have any questions or queries.

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