The way we live is changing, giving us more choice about how we communicate, work and purchase products and services. Some things still require a visit to the shops, others can be ordered online while certain items may be best negotiated over the phone. This is especially true if you plan to do a bit of haggling, such as with a mobile phone contract.
The mortgage market has also developed to offer borrowers the widest choice possible about how they access homeloans. You can choose to go direct to a mortgage lender, or through a professional mortgage adviser who recommends a deal for your needs.
You can visit a lender in branch, or a broker in their office, and of course you can deal with either over the phone. In addition the online channel has become increasingly important for initial research and enquiries, although many people still prefer the human interaction of a face-to-face meeting or a phonecall when it comes to such a large financial transaction.
First-time buyers need to decide what channel best suits their needs, lifestyle and level of confidence. Do you want the reassurance of a mortgage adviser holding your hand every step of the way, or are you confident enough to go online and apply for your mortgage without any advice? The choice is yours.
Many first-time buyers prefer to visit a mortgage lender at a high street branch because they feel reassured by talking through their mortgage with somebody face-to-face. An adviser at a mortgage lender will go through a fact find and interview process with you and advise you on which of their brand’s products is most suitable. But remember they will only advise you on products on offer from that bank or building society and there could be more suitable mortgages elsewhere. A branch adviser will answer your questions and fill in the relevant forms for you. Plus with some lenders, you will be able to contact the same person throughout the process so you can feel safe knowing that you are dealing with someone who already knows you.
Of course, if you phone a mortgage lender you can still have the same human interaction you get in branch, although since mortgage interviews can last up to an hour and a half, it can be more relaxing to sit down in a branch. But for some people who don’t have the time or ability to get down to a local branch, arranging your mortgage by phone is a useful alternative. You can still feel reassured that you have someone in the bank or building society looking after your needs, and they will still fill out forms for you and hold your hand through the process. Telephone staff can also offer full regulated, personal mortgage advice in the same way an in-branch adviser does.
For first-time buyers who are confident about their mortgage knowledge, the online route can prove a quick and easy way to apply for a mortgage. If you take out a deal online without any help or assistance, this is known as an execution-only or non-advised mortgage. It can be very straightforward and you can apply 24/7, but it’s only suitable for those who do not require advice and are comfortable about their mortgage choice. Execution-only is unlikely to be suitable for most first-time buyers.
Alternatively you can go for a half and half approach, where you research your options online, and apply for a Decision In Principle, where the lender offers a (non-binding) offer without doing checks on the information you have provided. At this, or any, stage you can call up the lender and take advice or simply chat through your options. They will help you to complete a full application, deal with any enquiries and give you advice from there.
Many first-time buyers are not confident about mortgages and are unsure about what is the best deal for them, or even what they need to do at what time in order to get a mortgage and buy a property.
A mortgage broker deals with all of this, advising you on the best specific deal for your circumstances, making the application on your behalf and working with the lender to get it through quickly, as well as helping with the paperwork and holding your hand through the whole process.
They are particularly useful for those borrowers with unusual needs or circumstances because they deal with a range of lenders that cater specifically to this market and do not deal directly with the public.
An independent broker can give advice on products from all mortgage lenders, but some brokers are tied. This means they offer advice on a select number of mortgage lenders’ products.
Brokers will either charge a fee for advice, receive commission from the lender or a mixture of both, but they have to tell you about their fee structure on your first meeting, or contact. They are professionally qualified and regulated by the Financial Conduct Authority, so you have a right to redress should you feel there has been a problem.
In addition, they work long hours, may be willing to visit you at work or at home, deal with you over the phone and also by email.