Using a broker to obtain a new rate with your existing lender..
At Best 4U Mortgages, not only do we analyse the whole market to find you the best mortgage deal, we also have an obligation under 'Treating Clients Fairly' to assess if staying with your current lender, is more beneficial to you?
The majority of lenders, allow us as a broker, to access your existing mortgage with them to find out what rates they can offer you. You may be thinking 'well I can do that myself!' and yes you can, but as soon as you start asking for advice from your lender, they will either confirm whether they can or can’t give it. If they can provide advice, you may have to do an over the phone interview which can take around an hour or possibly go into your local branch. As soon as you ask a question along the lines of 'what rate do you think?' this would be considered to them, as giving you advice. If they don't give you advice, you must then find the rate you want from their range of products and make your own decision.
As a broker, we are also very aware what underwriting the lenders use in relation to a product transfer or further advance, we know how to check what valuation the lender is using and how to contest it, whether background buy to lets or commitments will affect borrowing and what income the lender will use. Even if you have been turned down by your existing lender and it’s in your best interests to stay with them, a broker can often turn it round...
Some recent examples:
Example A - A couple wanted to change their product with their existing lender Halifax, so they called the Halifax, only to be declined by them, due to a large amount of unsecured debt. Therefore, this was the reason they had rang me as they thought they would have to go to a new lender. Upon looking over their details, I still felt they should stay with Halifax as they did fit on affordability (based on the figures I had submitted) if they consolidated some of their unsecured debt.
If they kept their unsecured debt, for example: credit cards, that can take a long time to pay off anyway and at a very high interest rate, no lender would lend to them. I explained that there are solutions and so we discussed the implications of paying the majority of their unsecured debt off, by changing it to a secured debt and lengthening the term. This could offer them a saving of £600 a month! With these facts demonstrated, they decided to proceed and consolidate the debt.
With a saving of £600 per month on their existing outgoings, I explained that some or all of this could be used to overpay their new mortgage and the bonus, it could all be paid off quicker than the 25-year term of their mortgage. With agreement, I proceeded with their application, I knew exactly what data to input, I knew what product to select, the term and the best bonus of all, for our client, I could do this without them having to take time out of their busy day or sitting in front of me.
This whole process, from start to finish, where my client also had their additional funds in the bank, took just 7 working days.
Example B - A couple have a Halifax mortgage that is due to end in 2yrs 1 month however, on this occasion, as a broker, Halifax would not let me deal with this (because it was within 2 years 6 months) so we took an alternative route with this. I coached the clients through what to say to the Halifax, directing them to ask the correct questions, as the fixed rate for the new mortgage we wanted, went past the end of term by 1 month. In the end, the Halifax adviser couldn't understand our conundrum so myself and the client rang the Halifax together, my client gave me authority to talk with the Halifax and as I was able to ask the correct questions, we established that they couldn’t have any of their fixed rates because they had gone past the term end date (which is what I had originally thought). Although, on 2 occasions, Halifax quoted their 2 yr and 5 yr fixed rates which they shouldn’t have been quoting at all.....
A broker really can offer the advice and support you need when it comes to a mortgage regardless of whether it’s your first mortgage, if you’re looking to re-mortgage and consolidate debts or apply for a new mortgage.
Date: 2nd December 2016