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The Pros and Cons of Using a Mortgage Broker in Lincoln

The Pros and Cons of Using a Mortgage Broker in Lincoln

Why Should I use a Mortgage broker in Lincoln? | MoneymanTV

Deciding to buy your first property is a challenging task. Therefore, you must take your time, look around for various options thoroughly and make an informed decision.

As you might anticipate, we believe there are some excellent reasons to use a mortgage broker in Hull. Whether the brokerage service is online, you can still pay a visit directly to the lender. Even in technological advancement, we find that most people still refer to a mortgage broker. Hence, we will take you through the pros and cons of both methods.

Advantages and Disadvantages

Firstly, a well-versed mortgage broker will take the time to have an initial conversation with the applicant to help him decipher if you are mortgage ready to make an application. When contacting us and gathering the necessary details, one of our mortgage advisors in Lincoln will make sure to shop around and get the best deals possible.

One of the most notable advantages of going with a mortgage broker is valuable expertise in the home buying or refinancing process. Mortgage brokers have ample industry experience to lean on when offering mortgage solutions to their customers.

Similarly, our mortgage broker in Hull also has access to try and find wholesale rates on home loans. These rates can be lower than the retail interest rates, helping borrowers save a substantial amount of money over the life of a home loan.

Most importantly, a Mortgage broker can be your point of contact from the time you first call them right up to when you finally get the keys of your house in your hands, and we will guide you through the entire process.

Bank vs Broker

On the contrary, going to a bank helps save you a broker fee, saving yourself a reasonable amount. In earlier years, another significant advantage of a bank was that the branch manager knows an individual’s finances in and out. However, that all went by the wayside when credit scoring came in and is no longer the factor.

Likewise, some Lenders offer exclusive ‘direct-only’ deals that a broker would not have any access. Lenders do this to attract a wide range of applicants to make a good spread of business from consumers and brokers alike, turning exclusive products on and off when deeming necessary. On the other side, some products may only be available via the broker and not direct with the lender.

From 2014 onwards, lenders got restricted to sell mortgages on a non-advised basis to just anyone. Up until that point, many applicants felt like the non-advisors had been trying to force actual advice on them. They weren’t able to benefit from some consumer protection that goes with mortgage sales conducted by professionally trained mortgage advisors.

Lenders were coming to terms with and hence the issues present in these services led to a significant shift towards more applications getting made via mortgage brokers who are quick enough to offer you same day mortgage service.

You also need to check carefully if a lender is willing to lend you a considerable amount of money. It does not matter how good a lender’s deal might seem, but he should lend a significant amount. For this reason, people opt to go to an apt and professional mortgage broker in Lincoln.

Handling Difficult Cases

Nowadays, mortgage applications are no more straightforward. Many factors make a case more complicated. A few of the examples are as follows:

– Poor credit history
– Too much debt
– Payday loans
Self-Employed Income
– Mixed source of deposit (savings/gift)
– Let to Buy (keeping your current house and buying another)
– Contract workers/zero-hours contracts
– Affordability

In the past years, lenders could stand out from the competition by offering a better deal to the applicants. In the current era, this is different because the lending criteria vary from one lender to another. Some lenders lend more to Self Employed applicants or take a more empathetic view of their credit report’s previous discrepancies.

When you explain your case to an experienced mortgage broker in Hull, there is a possible chance that they have encountered the same thing earlier in the past, allowing them to personalize their service and help you through the process. With extensive experience in the field, your mortgage advisor will hopefully be able to recommend the most suitable lender for you at the lowest rate possible.

More than that, it is not just about getting the Mortgage. Even if the application itself is self-explanatory, we offer extensive experience and knowledge to our clients. For example, we will discuss how much we will deliver on the property they are buying. Our team of mortgage advisors in Hull can recommend other professional services such as Solicitors and explain the different types of protection and survey available.

Responsive Service

Another significant advantage of using a mortgage broker is that the brokers are far more responsive than some lenders. Delivering personalized service is the differentiating factor between the broker and a lender.
Besides, another significant reason for hiring a mortgage broker is that it helps you save time. Most customers prefer a broker because they are too busy nowadays. they might need a mortgage but have no time to get it done so that our advisor will take the weight off for you.

You only need one application with a mortgage broker rather than individually filling out forms for every lender. Your mortgage broker can also provide a comparison of any loans recommended; guiding you to the information that accurately portrays cost differences, with current rates, points, and closing costs for each loan reflected.

Agreement in Principle and Soft Credit Searches

A Mortgage Agreement in Principle is what you are given once you pass the Lenders credit score to qualify for a Mortgage. Often shortened to AIP, this allows you to make an offer on a property you like. It’s can also be helpful when negotiating on house prices, as it shows the seller you’re serious about your offer and are prepared as a First-Time Buyer in Lincoln.

What effect does an AIP have on your credit score?

This is dependant on whether the lender decides to use a Hard Credit Search or a Soft Credit Search. Below are the differences between the two;

Hard Searches:

Hard Searches go more in-depth than Soft Searches. The main difference is that Hard Searches are likely to affect your Credit Score. If you have a good Credit Score however, you don’t need to worry going into this as a First-Time Buyer in Lincoln.

Soft Searches:

The more likely option these days is that a Lender will carry out Soft Searches. These usually needing less information and in most cases leave your Credit Score unaffected.

Does an AIP Guarantee a Mortgage in Lincoln?

Although they can be a game-changer, a mortgage isn’t always guaranteed. The lender will need you to provide them with documents in order for the Underwriter to make a final decision.

There is often small print included on Agreements in Principle that may easily be missed. When customers reach out for assistance with their Agreement In Principle, at times we have found they’ve been turned away at full mortgage application stage.

The documents you will be required to provide can include; Identification, Payslips, Bank Statements and more. As your Mortgage Broker in Lincoln, we take pride in helping our customers, whether they are Moving Home in Lincoln or Self-Employed in Lincoln.

Is My AIP a Necessity When Making an Offer?

You may be able to get away with this, however, most estate agents will want evidence that you are able to proceed.

How Long Will My AIP Last For?

AIP’s usually need renewing after around 30-90 days, although this isn’t a worry. The main reason we recommend getting one so early is to avoid being told your dream home is no longer available for purchase.

Getting your Agreement in Principle sorted also means you don’t always need to buy the first house you see. It’s a simple process, so if it expires you can easily get another.

How Much Deposit Do I Need To Buy A House in Lincoln?

How much deposit you need to buy a property depends on your circumstances and what it is exactly what you are trying to do. Here we explore how much you might need given your own personal situation.

Why Do I Need A Deposit Anyway?

In years gone by 100% mortgages were readily available and indeed before their demise, Northern Rock was offering 125% loan to value mortgages, that is to say, if you were buying a property valued at £100,000 they would lend you up to £125,000 (where did it all go wrong?!).

Lenders need you to put down a deposit simply to reduce their lending risk. If they lend you 100% of the purchase price then for some reason you fall into arrears and they need to take possession of the property then it only takes a small dip in house prices for them to suffer a loss (and they don’t like that).

Also, there is a school of thought that says if you haven’t invested some of yours or your family’s money into your home then you might find it a bit too easy to “walk away” should the going get tough and you were struggling to meet your monthly payments.

If you are not in a position to save up say, 5% of the purchase price yourself then it could be argued that you’re not quite ready to get onto the property ladder.

Will the government assist me?

If you can find 5% from your own resources then you could qualify for the Government’s Help to Buy equity loan scheme. This applies to new properties only.

You put in 5% and the Government loans you up to 20% to make up a 25% deposit. After 5 years you need to look at paying the equity loan back possibly by way of a remortgage or from savings you have been able to make in the meantime.

I’ve Got 5% Deposit – Is That Enough?

At the moment, yes 5% is enough in lots of circumstances. Not all Lenders will accept only a 5% deposit though so your options are more limited and normally you will need a reasonable credit score to qualify.

There are lenders out there that would consider you for a 95% mortgage with an average credit score but the rate of interest would be higher.

My Credit History Is Poor – How Much Do I Need To Put Down?

Many of the specialist Lenders want you to put down at least 15% deposit if you have a poor credit history, once again as above this is simply to reduce their risk in case a repossession occurs.

It is much more difficult to obtain this type of mortgage than it was in the mid-2000s but it’s not impossible.

What About Buy To Let?

You’ve always needed to put down a larger deposit for Buy to Lets and most Lenders at the moment are looking for 25%.

Can I Take Out A Loan For The Deposit?

This could be possible but the vast majority of Lenders won’t let you do this, essentially this would still be 100% lending.

Can Someone Gift Me A Deposit?

Yes, this happens all the time. Generally it’s “Bank of Mum and Dad” gifting or other family members but even family friends can gift you money as long as they can evidence the funds, prove who they are and confirm they are not expecting repayment of the gift.

Are There Any Circumstances At All Where I Don’t Need A Deposit?

If you are buying as a sitting tenant at a discount from the open market value, from a family member or if you qualify for a discount under the Right to Buy scheme then normally you don’t need to put any of your own money in as the equity is already “built-in” to the deal.

Please note that the above information is for reference purposes only and is not to be viewed as personal financial or mortgage advice.

Why get Mortgage Advice in Lincoln?

Most people only arrange a mortgage every few years whereas Mortgage Brokers are working with Lenders on behalf of clients day in day out.

As such we know which Lenders can process your mortgage application offering both a competitive interest rate and avoiding long delays in processing.

Here are the 3 main advantages of seeking mortgage advice?

  1. Compare Mortgages
  2. Criteria Criteria Criteria
  3. Stress Busting

Compare Mortgages

Before the days of the Internet, comparing mortgages was a long and tedious exercise. Saturday mornings would be wasted as customers traipsed from Bank to Building Society looking for the best deal on offer. Of course some of this can be done online now but with so many things to consider it’s still far from a straightforward exercise.

In June 2013 Which? conducted research on 1001 Homebuyers and Homeowners to rank 5 two year fixed rate mortgages in order of total cost over the 2 year period and only 5 (0.05%) ranked them correctly. With all the fees and charges and exit penalties from existing deals, it can be very confusing.

We use daily-updated mortgage sourcing software so at any given time I can recommend the most suitable mortgage for all my clients within just a few clicks. Saves you time, and should save you money.

Criteria Criteria Criteria

It’s all very well sourcing the best mortgage deal, but getting it might be an entirely different story!

There are numerous reason people are declined for a mortgage now, including low credit score, length of time in employment/self-employment, failing the affordability calculator – and the list goes on and on.

Trying different Lenders and then not being able to proceed for whatever reason can also adversely affect your credit rating. Every time you apply the Lender in question will carry out a credit search and too many of these on your file makes it look like you’re continuously being declined – not good!

It’s best to speak with us in the first instance to find a Lender that you meet criteria with, then take things forward from there.

Stress Busting

It has been said that after the death of a close family member and divorce, that moving house is the most stressful experience you can expect to go through, especially if you’re selling a property and trying to complete your new purchase at the same time. My job is to take some of that stress off your shoulders and make sure your mortgage application runs as smoothly as possible.

The best thing you can do is talk to our Mortgage Advisors in Lincoln before you have found a new home. That way you will know that you can borrow enough to be able to proceed and, even more importantly, that you can afford the mortgage payments now and in the future.

There’s a lot to organise what with the legal aspects of the purchase, packing, dealing with Estate Agents etc and the feedback we get regularly from customers is that they were glad to have a Mortgage Advisor in Lincoln on their side right the way through the process. We deal with people in the same situation as you every day – give yourself one less thing to worry about.

Lincolnmoneyman.com & Lincolnmoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is authorised and regulated by the Financial Conduct Authority.
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