This is a common question many people consider when on the verge of acquiring a new property. Some economists and other property experts are predicting an impending rise in interest rates, so it is not unusual to wonder if moving is a smart decision, or whether you are better off just staying in your existing property and re-mortgaging it instead.
Right now, interest rates are highly competitive. The dilemma for most people is whether to act fast and secure new contracts with their mortgagee before it climbs, or wait a bit. The decision to involve a mortgage broker (or not) comes to fore.
To use a mortgage broker or not? That is the question…
This choice of involving a “middle-man” depends on certain factors. It is easy to walk into a bank or building society and speak directly with your mortgage lender. One advantage of this is, you will be entitled to some loyalty benefits such as cheap rates. However, you could be limited to only the products they offer. Suppose you want more? Ensure you have studied the markets to know what is available and what works best for you before making a final decision.
If you have owned a mortgage for a while or are experienced, a direct transaction will be suitable. Especially since there are mortgage calculators online to fast-track your calculations. However, if your transaction is going to be complex, such as, moving to a bigger home that requires a bigger mortgage, or requesting capital for a renovation in addition to re-mortgaging the house, then hiring a mortgage broker is necessary.
Why mortgage brokers are becoming popular
Recently, more mortgagors are turning to brokers because of the increasing tough regulations that have been introduced in the property sector. To ensure their application doesn’t fall short, many mortgage takers, especially newcomers, involve professionals.
According to the Head of Lending at the Mortgage Advice Bureau, Brian Murphy, there has been a marked increase in the number of people using mortgage brokers over the past few years. Consequently, people who go directly through the bank or building society have decreased in number.
Mr. Murphy attributes this to the fact that it takes more time and expertise to complete a mortgage application today than it was a few years ago. Furthermore, more people are refused mortgages because of certain factors including a marred credit history, a gig-style employment or unsuitability with the lender’s affordability profile.
Benefits of using a mortgage lender
There are benefits to using a mortgage broker. For one, these experts know which lenders are best suited for the respective needs of their clients. They also help you organise vital documents your mortgage lender will ask for. This saves time and increases chances of a successful application.
However, you will be expected to pay additional fees for a broker’s services. Before you engage one, make sure you agree on the terms of arrangement. Many people have fallen out with their brokers because they didn’t establish a mutual understanding.
Is your mortgage request straightforward or a bit more complicated? Determine if a broker will make it easier. The decision is entirely up to you.