You are looking to move, remortgage or maybe buy an investment property in Exeter and you need a mortgage to do it! The question is, what does a mortgage broker in Exeter do that you can’t? Why can’t you just go to a bank and avoid paying for their services, particularly when there are potentially loads of other costs? Read on to find out the inside scoop on the good, the bad and the ugly!
An important thing to understand is that when you receive advice, your mortgage broker in Exeter has a duty of care to you both morally and more importantly, legally through the very tight regulations set out by the Financial Conduct Authority (FCA). If their advice is not up to scratch you can complain and be compensated.
When it comes to getting a regulated mortgage (residential and some more niche regulated lending – sorry for the technical jargon but it’s important you know!) A firm must recommend the best mortgage and be able to justify why the particular deal was recommended to you. Just in the same way a doctor has to recommend the best medicine.
All of this has to be evidenced and at Barr Financial as part of our drive for more transparency in our industry, where we once gave clients the standard documents required by our regulator i.e. quotes and our recommendation letter. We now go much further and also give all our clients the sourcing results and the full research document that we produce which goes into the granular detail of how we got to our recommendation with workings out’s, notes etc. Interestingly, these additional documents have always been part of our internal process to evidence the correct advice, but now we are going a step further to show and demonstrate this in a transparent way.
Treating customers fairly
The FCA regulates the financial services industry which includes banks, financial advisors, mortgage advisors and others. It is an incredibly rigorous and robust regulatory framework we all have to comply with. At its heart, it is trying to ensure all regulated firms are “treating customers fairly” which has to be demonstrated and evidenced through every aspect of our business models. This is, of course, great and hopefully demonstrates our industry is doing everything possible to put clients front and centre of everything we do. Believe it or not, this is a lot more than just words as we have to implement how we achieve this through our whole business model, which will include things from the way we recruit, our continuous professional development (CPD), the advice we give, plus much more!
There is no doubt the compliance regulations are very onerous, thorough and complex. Not many industries are so tightly regulated, which is both good and bad. Good in so much as you (the consumer) are incredibly well protected from bad advice and shady practices. And thankfully, tough regulation has driven out most of the bad apples in our industry, which no one wants as it only serves to drag down those professionals who are doing a great job for their clients.
However, whenever an industry is tightly regulated there is an extra cost and burden it places on a business to demonstrate we are fulfilling our requirements. It is very easy for someone to say (as indeed we do) that we will always do the best for a client (which we will). The challenge as I’m sure you know is that some people will still say this, but won’t actually do it, and so regulation is there to ensure it is done. Which fundamentally is a good thing, it just costs a business more to operate in this environment.
Some firms and advisors only specialise in non-regulated advise which tends to be for some types of buy to let, and other investment type mortgages, such as bridging loans and development finance. This is fine, however, be aware you don’t have the same consumer protection as if it was a mortgage for your home.
Secondly, firms or indeed advisers who only do these types of unregulated mortgages, might not be qualified! It’s hard to believe right? But it’s true. Because it is unregulated the rules are far more relaxed! And even when they do hold their mortgage qualifications, they might not be used to working in a tightly regulated framework, so are unlikely to have the same internal process and procedures in place which is designed to protect you, your data and the advice you get.
They are qualified professionals
There’s an awful lot to choosing the right deal. It’s not as simple as just looking at a table and finding the cheapest fixed or tracker rate! Although you could be one of the few lucky ones where it is, usually lending criteria has a huge part to play as well. Get it wrong and the difference could mean it costs you thousands of pounds and you might not even realise it! Remember a mortgage is usually someone’s biggest debt they are ever likely to have, so it is critical you get it right.
A helpful way of ensuring you get it right is the fact that a regulated independent mortgage advisor has to be professionally qualified to give you advice.
Using an advisor is not just about getting them to find the cheapest deal, but it's also them advising you of what to do, how to do it and then which is the best mortgage option for you. Click To Tweet
It’s important to be aware, a lot of bank call centre and branch staff aren’t qualified to give advice. That said any bank or building society branch staff should often be able to arrange an appointment with one of their advisers – but remember (and this is really important) those advisers can only advise on their own range of products! Which is clearly only going to limit your options on so many different levels; from the interest rates, the borrowing amount, the term or the mortgage, and ultimately the monthly cost! Why would you only consider one or even two lenders, instead of looking at all, particularly when it’s your biggest debt?
The truth is, more and more people are seeking out the services of professional independent mortgage brokers. Current statistics show about 70% of all mortgages are now done through independent professionals. This may in part be due to the fact lending criteria is getting tighter and consumers are preferring to seek help from professionals who are able to not only find the cheapest deals but who are also able to navigate the complexities of tough lending criteria. Don’t forget every single lender has different rules across just about everything!
A Broker is on your side
If you are looking to get finance for a property in Exeter and you are considering using someone independent, it’s really important you know that they are on your side. I know we work in the financial services industry, but we aren’t at all like the banks. As advisors (and I’m sure I can speak on behalf of all good advisors in our industry) we only ever want to do what’s right, work well with clients and get them the outcomes they want.
As an industry, we are generally not a big corporate body but more often than not most firms dotted up and down the country are small firms with individuals wanting to build a good reputation of providing a good service to their clients, just like most small businesses. And the point is, each and every client is important to an advisor and we all love working with clients who we know trust us and we can work well together. I’ve said this many times before, but we want clients to feel like we are part of their team. When this happens and we all trust and work together well, it really does create a winning formula for clients.
They know the industry
As briefly mentioned earlier, lending criteria has tightened massively in recent years, particularly following the financial crash and the mortgage market review (MMR).
More than ever, it is a compelling reason to use a broker as they are working with lenders on a day-to-day basis. They know which lenders can process your application without unnecessary delays.
They also know the background criteria that a lender has and can bring this experience to bear when advising you and processing your application.
Because a broker might put a lot of business to lenders in a year, they can exert influence and chase things in a way you just can’t do by yourself. They also know who to speak to when things go wrong or become tricky.
It’s not just about the deal
A broker won’t just advise you about your financial arrangements. They will also look at any related life insurance, critical illness cover, income protection and even buildings and contents insurance you have. I know what you are thinking…here comes the sell!! Just to share with you, and unlike some, we don’t push things down peoples throats, we are here to help. If you want our advice, great, if not no problem but at least you are aware of your options.
A good adviser will recommend insurance based on your financial situation to make sure you are fully protected in the event of:
- Critical illness (such as cancer, heart attack or stroke)
- Family Protection
- Business protection
Oh and for those that think they don’t need it, the number of times I’ve heard sad stories of things happening to people who thought they didn’t need it is actually scary. Life has a funny way of punching you in the face when you least expect!
Don’t be put off by a fee
Advice tailored to your situation is a service. In order for the broker in Exeter to be able to offer this service, they need to make money. The cost is by far outweighed by the saving you’ll make by making sure you get the right advice for you. In addition, they will save you a lot of time by helping push the application through successfully and efficiently.
They do this by one or both of the following:
- Charging a fee
- Commission. Lenders and insurers may decide to pay the mortgage broker commission placing the business with them.
Of course, you can look to save this fee by doing it yourself. The critical question is whether you see value in the service. If you do, then it’s worth it, and if you don’t, that’s fine too.
How much does my Exeter mortgage broker make?
Brokers are required to provide you with a Key Facts Illustration document about their services – details of any fees or commission they charge or earn can be found in this document.
You will also be provided with a Key Facts Illustration (KFI) about the specific mortgage being recommended.
Details of your broker’s fee can be found in section 8 of the KFI.
Details of any commission earned by your broker for introducing and recommending your business to the lender can be found in section 13 of the KFI.
The value of advice in Exeter
Arranging finance is a lot more difficult than it may first appear. Knowing what rate, what term, what lender, what features, what insurance are all time-consuming and complex matters.
Comparing finance on a site like moneyfacts.co.uk is a good place to start – it’s great to get an idea of what’s out there. But choosing a deal is a process far more complicated than simply the lowest rate or the best incentives.
And it’s that thorough, professional look at your finances that makes advice well worth paying for where ever you live – not just in Exeter!
If you want to find a mortgage broker in Exeter then feel free to get in touch or just ask a question below:
What’s your experience of trying to get a mortgage in Exeter, share your thoughts and experiences in the comments section below!