Using a mortgage to buy a house, improve facilities or change a mortgage is one of the most challenging topics for self-employed. During the year, many self-employed apply to lenders to get the mortgage. They want based on their needs and financial circumstances. But there is an alternative to using the services of a mortgage broker. Each of these two methods has its advantages and disadvantages, which are mentioned in this article.
Do we need a broker to get a mortgage?
Answering these questions will help self-employed choose between going directly to a lender or using the services of a mortgage broker in London.
- Do I know enough about the self-employed mortgages market, and can I get the product and service I need?
- Will I have better access to the product I need by contacting lenders directly?
- Will I save more money by using a mortgage broker in London?
- Do I have enough knowledge about the types of self-employed mortgages and their characteristics?
Advantages of using a broker
A mortgage broker is a professional who can communicate with lenders on behalf of the self-employed. Brokers have access to a wide range of lenders and their products and help self-employed choose the product that suits the self-employed financial situation. A premier mortgage broker in London knows which mortgage is right for the self-employed.
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A better understanding of the needs and conditions of self-employed mortgages
- Higher experience and knowledge of brokers – Mortgage brokers have proven and long-term experience in providing self-employed mortgages. Consulting with many self-employed in the brokers’ records means that they understand their needs and circumstances well and are likely to provide better services to them.
- Borrowers Pre-evaluation – Brokers review self-employed details, carefully assess credit scores, and make recommendations to them.
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More chances to get a mortgage
- Lenders’ ignorance of the borrowers’ type of activity – Direct negotiation with banks and lenders who do not understand the self-employed ‘situation can lead to the rejection of their application or the mortgage that the self-employed get accordingly not with their needs financial potential. Lenders may also offer mortgages at much higher interest rates to them. On the other hand, through the advice of mortgage brokers in London, many become eligible for mortgages at favorable rates and conditions.
- Limiting the choice of lenders – while many lenders prefer to offer self-employed mortgages through mortgage brokers. Because by doing so, they reduce the risk of choosing the right one, and at the same time. They do not accept the legal costs related to lending to. Therefore, they prefer to repay their self-employed mortgages through brokers. If the self-employed refer to it directly, they will probably not find the product they are looking for, and whether the lenders will not offer a reasonable rate and conditions.
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Find specific products
- Extensive knowledge of brokers in different professions – Mortgage brokers have specialized knowledge to advise self-employed mortgages processes. They have worked with different self-employed in various economic sectors who have been seeking mortgages under different circumstances. Brokers, for example, are likely to be familiar with high-wage earners, doctors, lawyers, accountants, and architects. Who have special needs and are looking for specific products. When they are introduced to their status as a professional. Brokers have access to a wealth of information resources and know exactly how to advise self-employed.
- Wide access brokers to different products – A professional mortgage broker has access to a wide range of lenders products and processes various products in the market on behalf of the applicant.
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Get better rates
- Broker Focus on Getting Better Mortgage Rates – They are required to provide advice and search services in the self-employed mortgages market and must be able to justify the reason for the suitability of the selected mortgage. But if self-employed go directly to high street lenders, they will no longer be guaranteed the money and energy they have spent.
- Mass customization – Because brokers work with lenders on a large scale. They can demand the best rates from them, and as a result, the cost of applicants will be lower. Brokers will act as self-employed representatives and work as advisors before and during the mortgage application process.
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Flexibility in providing services
- Pay attention to the special needs and conditions of borrowers – Mortgage brokers in London carefully review the financial condition of their clients and facilitate the process of getting a mortgage according to their terms and needs.
- Familiarity with first time buyer mortgage terms – Brokers better understand lenders criteria and underwriting processes for first time buyers. Brokers are a good choice for first time buyers; because they need help. If house buyers contact a lender, they will only provide information about their products. In this case, self-employed’ access to the rates and conditions of other products on the market will be very limited. But from the wide range of products on the market, brokers can help borrowers find the best options for first time buyers.
- Time and energy for each case – A good broker will take the time to answer self-employed’ questions and make sure you have the right information to make an informed decision. Also, using the services of a broker, self-employed only need to complete only one application form, not to fill out a separate form for each lender.
Disadvantages of using a broker
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Conflict of interest
The fact that brokers will get their income from the lenders is a conflict of interest and calls into question the independence of the brokers. In this case, the broker will be more interested in gaining the lenders’ interest than in seeking the self-employed’ opinions. Therefore, borrowers must be careful in this regard.
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Brokers fees
Brokers may charge a high fee for the services they provide to borrowers. However, each broker gets a different feel from the self-employed. Therefore, before concluding a contract, you must discuss this issue with your broker unambiguously and be informed about your broker costs details.
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Other mortgage costs
In addition to brokerage fees, there are other costs associated with mortgages, including mortgage application fees, processing fees, property valuation, stamp duty, Private Mortgage Insurance (PMI), closing fees, and more. It is also important to know the costs and charges because if these costs are higher than a certain amount. Getting a mortgage will be very costly for the self-employed and will probably affect their decisions.
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Limited access of some brokers
Not all brokers have access to the entire stock market. Therefore, paying attention to broker solutions will limit the options available to the self-employed. However, some brokers may prefer certain lenders. So it would help if you asked them how many lenders they work with and whether they have any specific experience with them.
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Quality
Competence and experience vary greatly between brokers. An unqualified broker may deprive the self-employed of a favorable interest rate or impose a higher cost. Therefore, be sure that you have chosen the best option and the broker provides suitable solutions.
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Negative effects of using a broker in the mortgage process
Brokers may have little effect on lenders underwriting performance. It also usually takes longer for brokers to close their mortgages. So if borrowers have a limited time to buy a house or repay a mortgage. This can be a concern for the self-employed.
Conclusion
There are several advantages and disadvantages to using broker consulting services and direct referral to lenders. The most important advantages and disadvantages of using a mortgage broker in London are mentioned in this article. But depending on the type of activity, needs, conditions and geographical location, these criteria will change.
As a top mortgage broker in London, AWS Mortgage specialist advisors help borrowers have significant access to lenders for advisory services on a wide range of products. With extensive experience and knowledge, AWS Mortgage advisors have full knowledge of the products on the market.
Talk to our advisors to get a better chance of getting a mortgage. AWS Mortgage advisors will help you compare London’s lenders’ products to choose the most suitable rates and conditions from the factors available in the market.