More so than ever, we live in a DIY culture. We are encouraged to do it ourselves, to take control, to shun the help of the experts in areas where, with a little application, we can carry out the task all by ourselves.
There’s barely an area of our lives left that this DIY ethic hasn’t influenced, and finding a mortgage is no exception. I’m all for anything that encourages people to improve their financial literacy, but getting the right mortgage is a complex task. Everyone has a different set of circumstances, a different financial past and present, and different hopes for their financial future. As probably your biggest and lengthiest financial commitment, your mortgage needs to reflect this.
Only by working with an independent mortgage adviser can you be sure you’re covering all bases and getting the right mortgage product for your individual circumstances. Here are my pointers on why, when it comes to mortgages, it pays to enlist in some expertise.
Don’t underestimate the complexity of finding and applying for a mortgage. Many people think that it only involves working out multiples of your income to find out how much you can borrow, but it is so much more than this.
I liken it to a doctor taking a medical history. An accurate diagnosis is dependent on knowing the full range of symptoms and conditions but, importantly, then having the right experience and expertise to know what they all mean. As clever as the internet is, it can only provide you with general information, and not specific expertise tailored to your unique circumstances. There’s a big difference.
Mortgages for modern life
This is particularly relevant nowadays, when more of us than ever are becoming self-employed, the gig economy is growing and the old traditional structures of employment and salary-earning are being replaced with the new, more flexible arrangements to suit 21st century life.
A common lingering misconception is that it’s difficult to get a mortgage if you’re self-employed. It’s true, those working for themselves could face obstacles with lenders who use automated evaluation processes, but this is far from the full picture. There are many ways to generate income aside from the employed/PAYE scenario, whether that be as a director, a member of a partnership, working as a contractor, operating as a sole trader or on a zero-hour contract.
The important thing is that a broad range of lenders are now recognising this fact and adapting their mortgage offerings accordingly, taking personal circumstances into account and building up individual profiles of applicants. If you work with an adviser, gathering the correct information and putting it in their expert hands, there are plenty of opportunities available.
Counting the cost
What puts many mortgage-seekers off using an adviser is the fear that it will be costly. This can be an opportunity to do some of your own research on what each advisor may charge. For example, your estate agent might offer a mortgage advisor as part of the move, who charges an upfront fee.
We instead receive commission from the lender. It’s only in a small percentage of cases (when the commission is less than £750) that we may charge a fee, representing the difference – only payable upon a successful completion.
However, it’s important to stress that concentrating on the transactional costs of the advice risks missing the bigger picture. An independent, impartial mortgage adviser with access to the vast array of products and exclusives on the market, once equipped with the full knowledge of your financial circumstances, is in a superb position to get you the most economical and cost-effective mortgage for your needs. A good adviser will aim to match you with the most suitable deal, so getting quality advice will pay dividends.
Peace of mind and protection
Taking advice can also help avoid costly or time-consuming problems that may arise in the application process if you’re taking the DIY option. You could be rejected for a mortgage if you don’t meet the criteria correctly or understand the circumstances the mortgage was designed for.
So, while encouraging a hands-on, DIY approach is to be welcomed in many areas of our lives, it’s worth thinking carefully before applying it to a large and lengthy expense like a mortgage. Seeking professional advice can save both a huge amount of time and effort plus a significant sum in the long run, giving you priceless peace of mind from day one.
If you’d like some advice on choosing the right mortgage for you, please get in touch.