I have always said that mortgage broking is not exactly rocket science, but that is in no way demeaning of the years of training, swotting for professional exams to attain the relevant qualifications and hours of hard graft trying to keep up with the ever changing small-print of not just one, but all potential mortgage lenders criteria.
It seems bewildering at first, the choice is endless, every client has a subtle but very different requirement that often they themselves do not realise they have and on top of all this, a buyer motivated by an emotional intensity to purchase their dream home is a wonder to behold. Yes, it can be very stressful!
Once you have done this for a while however, 20 years in my case, you realise several things and one that stands out above all others – buyers need advice.
No matter how well paid, well educated, how many hours of research a client has done, how many online Best Buy tables studied, mates down the pub chatted to or dinner party conversations undertaken on the matter; the simple act of chatting through your options with an impartial stranger looking out for your best interest cannot be replicated.
It is surprising what an hour long meeting can uncover and many times a client comes in with one thing in mind, but ends up leaving with something else that is much more suitable.
It is not that we are imparting some mystical secrets that are carefully hidden away from the general public, although the small-print in many lenders criteria can sometimes seem as such, or is it that we are simply telling you what to do, as that implies that perhaps we have a hidden agenda. Put simply, a good adviser enables the client to make their own decision based on a perfect understanding of what is realistically possible and satisfying the buyer’s true requirements.
There still seems to be a general misconception of what a mortgage broker actually does.
Anyone can tell you in seconds what the cheapest rate in the market is and, at various times, this will vary between a direct to lender product or a broker only deal, but this misses the point. Can this product actually be attained and is it the best to fit your personal circumstances?
Every day there are tales of woe from all areas of the consumer market about people who bought the cheapest products which turned out to have a sting in the tail and cost a lot more in the long run.
A good independent, professional mortgage broker provides a service that a borrower cannot obtain direct from a lender and certainly not from a comparison site, neither of which actually advise on all the best products in the market
In general the availability of information online with regards to mortgages has helped to educate many of our clients before they come to us, so they have perhaps a clearer idea of what they are looking for. We find that in general this helps when it comes down to providing them with the appropriate advice.
Online research is fine, but all it does tell you is what the cheapest product is according to their limited understanding of your requirements. Comparison sites, however, do not tell you about every product that may be available to you, for example, the ones that are exclusive to brokers, direct through certain lenders or available through private banks. Many also confusingly put their sponsors products at the top rather than the most suitable or those that may actually be available as a criteria exception that brokers know about.
For high net worth individuals also, the whole range of highly competitive products, (sometimes market leading), available through Private Banks, who offer a blank sheet of paper approach to underwriting, remain the preserve of the more respected broker.
Service is also key. Securing the property of your dreams often means moving quickly and many larger brokers have immediate access to the decision makers, rather than having to go through the layers of process that walking into a branch often entails. This means that any potential issues can often be anticipated and the whole process smoothed.
Helping a busy client to complete the mortgage application, prepare all the documentation and liaise with the lender, valuer, estate agent and solicitor to ensure deadlines are hit is a time consuming process and this is all part of the brokers service.
Knowing which lenders are able to proceed quickly and which ones have a paperwork backlog can be the difference to actually getting the property you want or losing out.
There are other subtle things that at any one time a decent independent broker knows just by the virtue of doing the job day in day out. Examples so far this year include the following :-
· a market-leading lender unable to get a valuer into a property for up to 8 weeks
· a credit score tweak enabling one market leading lender to lend up to 5.25 times income even though the published criteria says 4 times
· a lender able to lend above their published maximum loan size of £1m
· another lender tightening their credit score so that it is harder to get accepted for a couple of weeks until their backlog is dealt with
· advance notice of imminent rate changes which can save a client thousands of pounds over a 5 year fixed period
There is also the myriad of different criteria that enables brokers to know which lenders are happy with only one year’s accounts, who offers the most generous terms to contractors or those working freelance, who is good with those on a Visa etc, etc.
The days of a broker simply looking down a list of products, pointing at the cheapest and pocketing the inflated commissions are thankfully long gone.
It may not be rocket science, but especially as mortgage criteria has tightened, professional mortgage advisers who provide genuine independent advice and a proper relationship based service are, and always will be, in demand.