Mortgages – put in an oversimplified way – are loans that a bank or other financial institution grants you. In return you promise to pay a periodical amount back (usual monthly) so as to give back the initial capital plus interest over a period of many years (usually 25 years). This loan is given under the security of collateral (usually the property you buy). That’s the simplest way of understanding a mortgage, and it’s what comes to mind when most people consider it.
However, there are many kinds of mortgages out there – no two mortgages are the same. In fact, due to the heavy competition among banks and other mortgage lenders, getting a mortgage can be very confusing. And beware of the fine print! Before considering one, it’s wise to check with professionals and getting some advice. Here’s how a mortgage adviser can help you – and what to expect from one.
The mortgage advisor
The mortgage advisor is usually also a mortgage broker (such as one from Flagstone.co.uk) – technically speaking, they are not the same thing, but most professionals offer both services. Their main duty is to advise you on which mortgage is most beneficial to you, and work out what your deposit and monthly payments should be for you to live the most comfortable life. With so many kinds of mortgages out there, the mortgage advisor’s services will save you plenty of time and money in the end.
Selecting your advisor
Mortgage brokers (or advisors) are usually connected to several institutions and it’s possible that the professional will give you only limited options, depending on which products and services they promote. However, there are some who are ‘whole-of-market’, meaning they observe and analyse all options available – so look for a ‘whole-of-market’ broker.
If you’re only looking for advice, the advisor will normally charge you a fee. However, if you decide to have the mortgage broker set up a mortgage deal for you, they will also be paid in commission. You should understand that the mortgage advisor or broker is required to outline these charges to you in detail and can never put you under any obligation.
A mortgage can be a great blessing – it does, after all, allow you to buy that dream property, something most of us would never be able to do without mortgage approval. However, it can also be an incredibly confusing process. Sorting through the legal and financial matters on your own – especially if you have never applied for a mortgage before – is risky and you may be signing a contract without realising there are better options for you out there. Get the best deal you can. Talk to a mortgage advisor or broker before you make that important commitment.