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CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
Copyright 2012
www.capitalfortune.com
CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
Introduction
Buying a house or flat is the biggest investment youre ever likely to make, so its important to get all the information you need on mortgages and legal matters before you start. After all, if you choose the wrong mortgage, you could end up paying thousands of pounds more than you need to. All too often, people go to their existing bank or building society for advice, not realising they will probably be shown a limited number of mortgages and could therefore miss out on a deal that would have suited their budget and lifestyle much better. The mortgage you choose is going to have an impact on your monthly finances for many years so its important to shop around for the best mortgage deal. This guide is intended to give you a great introduction to the mortgage market so that by the time you are ready to start looking, youll know the different kinds of mortgages that are available, which kind of mortgage is likely to suit your circumstances and budget, the questions you need to ask a lender or broker, and the fees youre likely to be expected to pay. Youll also discover some handy money and time saving tips as well as some invaluable pointers to help you avoid making the wrong kind of investment. Having a great credit score is hugely important so youll also find plenty of information about what mortgage providers look for, what can affect your credit score and, of course, how to improve and maintain your personal credit score. If youre like many of our clients, you probably dont have the time or expertise to compare all the many mortgage deals that are available so weve also given you plenty of information about why using a mortgage broker makes sound financial sense. Youll find out how to find the very best mortgage broker so that you save time, energy and money and obtain the best possible mortgage. We wish you the very best!
Capital fortune
Copyright 2012
www.capitalfortune.com
CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
b) Types of interest Rates There are two main types of mortgage interest rate deal: fixed or variable. i) Fixed rate With a fixed rate mortgage deal, whatever happens to interest rates, your repayments are fixed for as long as the deal lasts typically two, three or five years. You effectively take out an insurance policy against interest rates going up. If rates fall, your payments will not drop. Most fixes revert to the standard variable rate (SVR) on expiry. ii) Variable rate With a variable interest rate mortgage, your mortgage rate can and usually will change over time. It tends to relate to the countrys economic conditions. There are three categories of variable rates: tracker mortgages, standard variable rates (SVR), and capped rate mortgages. iii) Tracker mortgages The rate of interest and therefore the amount you pay each month can vary depending on the rate the lenders follow. Some lenders track the Bank of England base rate, while others track their own base rate. The base rate is usually set every month. Some trackers only run for a couple of years but you can get one that lasts the life of your loan. iv) Standard Variable Rate (SVR) The Standard Variable Rate (SVR) is typically the rate you will go to at the end of your current mortgage deal. With most lenders, the SVR will follow the lenders base rate anything from a half to a few percent above it. And while your mortgage payments can change along with the base rate, some mortgage lenders dont always pass on the cuts, or set a lower limit on your payments. v) Discounted rate mortgage With a discounted rate mortgage, the lender offers you a lower SVR for an agreed period. So if the banks SVR is usually 5%, you may be offered a rate of 3% for the first two years. The rate will still change with the lenders base rate, but youll benefit from the cut, regardless of whether it goes up or down. With this kind of mortgage, its important to be prepared for the rise in payments when the introductory period ends. If your mortgage carries no penalties for doing so, that might be the time to look for a better deal.
CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
Copyright 2012
www.capitalfortune.com
CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
Copyright 2012
www.capitalfortune.com
CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
k) Close down any credit agreements you no longer use 12) A poor credit score affects your ability to borrow A poor credit score can mean youll be charged higher interest rates, given a smaller credit limit or that your application is rejected. County Court Judgments, defaulted payments and bankruptcy orders leave a black mark against your name when trying to secure credit. Missing credit card payments, direct debits for energy bills, or other commitments, means you could find a mark placed against your name that will cause you problems in the future. The first sign you have a poor credit score can often appear when you apply for credit and get turned down. This then leaves a footprint on your file and if you collect a lot of these, it could make matters worse. A lender doesnt have to give you the interest rate they are advertising or that you see in best buy tables on comparison websites. This is called the representative APR and it only has to be offered to just over half (51%) of people applying for the product. You may be offered a higher interest rate this is called your personal APR. You should check what your personal APR is. Lenders regularly review all of their customers and apply whats known as rate-for-risk pricing policies. If you fall into a certain group based on your credit rating, and the lender decides that group is now a higher risk than previously, they will put up the interest rate for all the people in that group. So even if youve been a good customer and always paid on time, you could suddenly face a hike in rates. Thats why maintaining a good credit score is essential even if youre not looking to borrow any more money. 13) Check you have no missed payments on your mobile phone Your mobile phone contract is a credit agreement and should therefore be treated with the same amount of care. Missed payments, late payments and unpaid accounts will all have a negative impact on your credit rating. On the positive side, paying your mobile phone bill regularly and on time will help you to build a positive credit rating. The longer you remain a good customer, the better your credit history will appear.
CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
Copyright 2012
www.capitalfortune.com
CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
Copyright 2012
www.capitalfortune.com
CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
This will save you valuable time and money. Typically you only need to provide your information to mortgage broker once and theyll be able to use it to find a suitable deal and submit an application. 26) look beyond the initial interest rate and assess pound for pound what the overall cost of the mortgage will be Low rates can mean expensive mortgages, giving high lender arrangement fees or other costs. See if the lender will advise you how much you will actually pay in interest over the initial incentive term and for the rest of the mortgage. 27) The initial interest rate you pay is certainly important, but not the only factor to consider Some schemes that look very appealing have great rates to start with, but may come with huge set-up fees or extended lock-ins to later, much higher, interest rates. Thats why its important to shop around and to weigh up each deal before you commit. 28) Consider the Annual percentage rate (ApR) The APR is a strong indication on the overall cost of the mortgage. You will often see two rates quoted by lenders the applied rate and the annual percentage rate (APR). For example: The applied rate for the term of the mortgage 5.19%. The overall cost for comparison is 6.2% APR. The applied rate is the rate of interest which the lender uses to calculate the amount you actually owe them. It will not be the same as the APR as it does not include all charges. You should use the APR to compare the true overall cost of your loan. For example, if you find two mortgages with the same applied rate and the same mortgage term but with different APRs, then you know the one with the higher APR has higher charges. The lower the APR, the better, so be sure you do your research. 29) Switch if you can to a daily calculated interest rate to save money Interest is calculated daily, monthly or annually. Daily calculated rates save you the most money. Thats because every payment you make reduces your balance, and the lower your balance, the less interest you pay. Mortgages where interest is calculated daily keep track of those monthly payments. If lenders sums are done once a year, they do not factor in all payments so interest is calculated on the balance at the start of the year which will be higher than later in the year.
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CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
38) Consider mixing products between a proportion on fixed or tracker mortgages Mixing products like this will allow you to hedge the risk of interest movements and could save you money or mitigate against you paying more if rates go a certain way. 39) look to mix interest only with repayment mortgages This will save you money on the amount of monthly repayments you will make. 40) Consider full interest-only mortgages to minimise monthly payments The advantage of a full interest-only mortgage is that youll pay less than you would on a repayment mortgage month by month. The disadvantage is that at the end of the mortgage term, you will still owe the capital and you will also end up paying more interest overall. You need to have a way to pay off the capital you owe at the end of the mortgage. Typically, this is done with an investment vehicle or by selling the house. The investment you use to repay your mortgage could be an endowment policy, an ISA, your pension, shares, investment bonds, investment funds or a buy-to-let property, etc. Using an investment to pay for the capital of your mortgage carries risks however. They include the investment not performing enough to repay the mortgage in full and that you end up paying more than you would have done with a full repayment mortgage. If the investment takes longer to reach the amount needed to repay your mortgage, youll be paying more interest and investing longer than you intended. 41) look at possible tax savings through using iSAs or a pension towards your mortgage 42) Consider stamp duty mitigation schemes or offshore trusts when buying the property Recent stamp duty mitigation schemes involve setting up a special purpose vehicle company, onshore or offshore, to buy a property and, once the sale is complete, the freehold is transferred or the company taken over. Its important to realise however that the HMRC is studying schemes like these with the intention of clamping down on them. 43) Consider your current and future domicile and whether this can potentially be used now or in the future when both buying and selling the property
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CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
50) Ensure you have all your paperwork together to avoid any delay in submitting the application to quickly secure the best deal whilst available After going to all the effort of finding a great deal and choosing a property, the last thing you want is to lose the mortgage deal because you dont have the necessary paperwork ready. Get everything that a lender will want to see ready before you start applying for mortgages. 51) Obtain rental valuations from ARlA estate agents for Buy To let properties Once you have valuations from a number of estate agents, you can use them to challenge the lenders valuation. 52) Shop around for your solicitors to save money A good service for this can be found at www.capitalfortune. com/purchase/solicitor-quote 53) Speak to mortgage advisers from Which? The Which? mortgage advisers look at every mortgage from every available lender (even the ones consumers can only get direct from banks and building societies). Its advisers are also paid a salary rather than commission so you can be assured the advice they give is impartial and independent. 54) Reduce the term of your mortgage By reducing the repayment period of your loan, the less interest you will pay. Whats more, loans with faster payoffs carry less risk, so lenders are willing to offer lower rates for shorter term loans. If youre in the market to take advantage of todays low rates and refinance an existing loan, consider taking out a shorter-term loan, such as a 15-year or 10-year fixed. The payment is higher than a 30-year fixed loan, but youll save thousands of pounds long term. 55) Consider offset mortgages which may also save you money if you use the offset facility and combine it with your current account An offset mortgage can pool your finances including your current account, savings and mortgage, into one. It adds up your pooled assets, savings and money in your current account, and offsets them against your mortgage on a daily basis. It offsets your savings against the total debt of your mortgage, so rather than earning interest on your savings, you pay less on your mortgage debt. Lets say you have 15,000 in savings and an outstanding mortgage of 100,000, youll only pay interest on 85,000. Since you wont be earning interest on your savings, you wont pay tax on it.
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CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
Copyright 2012
www.capitalfortune.com
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CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
Copyright 2012
www.capitalfortune.com
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CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
Copyright 2012
www.capitalfortune.com
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CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
Copyright 2012
www.capitalfortune.com
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CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
Copyright 2012
www.capitalfortune.com
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CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
Copyright 2012
www.capitalfortune.com
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CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
Copyright 2012
www.capitalfortune.com
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CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
Copyright 2012
www.capitalfortune.com
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CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
Capital Fortune
Mortgage broker Capital Fortune is an award-winning whole of market mortgage broker based in the City of London. Since we are not tied to any one lender, we are able to search the entire market on your behalf. We have the experience and in-depth knowledge of this complex market and use it to find you the very best mortgage to suit your budget and current and future lifestyle. With our help, youll save money, time and effort and have the best available mortgage. We offer all the standard mainstream mortgage products most brokers offer but, more importantly, typically assist those with more complex and specialist finance needs. Clients regularly tell us they appreciate us not only finding but securing the right product, from the right lender and always at the right time. In the past few years, Capital Fortunes commitment to its clients has been recognised by and it has won the following awards and commendations: Money Marketing Financial Services Award 2011 - Adviser Award Finalist Best Mortgage Adviser Mortgage Finance Gazette Awards 2011 - Winner Excellence Treating Customers Fairly Pink Home Loans Service Award 2009 & 2010 The British Mortgage Awards 2011 - Highly Commended Broker People Prime.
Our Guarantee
Your Capital Fortune Adviser is always on hand to answer any questions you may have regarding your proposed application and will ensure that the administrative process is carried out in a smooth, speedy and efficient manner. Our after care support team will be available to you long after completion of your application. Given that our aim is to build long term, trusting and knowledgeable relationships with our clients, you will get to know your Capital Fortune Adviser on a professional and personal one-to-one basis. At Capital Fortune we guarantee: To work at all times, in your sole best interest by supplying information and advice on the mortgage and/or insurance product tailored to your exact individual needs and circumstances. To answer any query you may have within a period of one working day. To cut out the jargon in all dealings with you. To make ourselves available throughout the application process and at any further time post-application always giving you the most accurate, current information and advice on our products.
Copyright 2012
www.capitalfortune.com
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CApiTAl FORTunE 101 Mortgage Broker Secrets To Get The Best Mortgage
Copyright 2012
www.capitalfortune.com