Mortgage Broker London

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Manus Bonner-Tymms introduces Pia Financial Solutions London-based branch, and explains the key role of a Mortgage Broker.

What is the role of a Mortgage Broker?

Otherwise known as an intermediary, a Mortgage Broker is essentially the go-between, between a client and a lender. We advise clients about various mortgages and tell them what they can and can’t achieve with regards to home finance.

What are the key differences between going to a Mortgage Broker versus your local high street bank?

If you go into your local high street bank, they’re likely to have their own in-house broker. An in-house broker will be tied to that bank’s products, so they are only able to advise and offer products that that bank offers. 

By choosing this option, you’re losing out on quite a bit of choice compared to going to a broker like myself, who operates with a large panel of lenders. That means we have a wide ranging list of lenders in the UK to recommend, and consumer choice is therefore increased.

Using a broker saves a lot of time, because they know which lenders will consider you based on your given circumstances. This avoids you, as the customer, approaching lots of different banks that may refuse your application, whereas I’d do my utmost to prevent that from happening by pointing in the right direction from day one.

What sort of services does a Mortgage Broker offer?

In terms of dealing with solicitors and estate agents, we give the client the choice of whether they want us to deal with them on their behalf, or they would prefer to do it themselves. It’s often easier if I deal with solicitors, because they often assume prior knowledge of terminology that people outside of the industry might not have.

Estate agents usually call the client for an update, and then call me, as the broker, again. By allowing the broker to take on this role, we can keep them informed on your behalf, again, saving you time.

How can you help First Time Buyers?

What I often suggest is that First Time Buyers sit down with a broker prior to looking at Zoopla or Rightmove, because we can give them an idea of their budget. This gives them an idea of  search parameters when looking for a property. There’s no point in looking at places that are going to be unaffordable, so go and see a broker first.

What are the best locations in London for First Time Buyers, and is it difficult to get onto the property ladder in London?

In London itself, you’ve got to manage expectations. It’s unlikely that a First Time Buyer is going to be able to live in zone one. However, there are plenty of places in zone two that I would deem affordable. 

The vast majority of deals I broke tend to be in zone two, and it’s all about transport in London really, and being well connected. Areas like Greenwich might be more affordable similarly in Lewisham or South West London. 

What sort of schemes are there to help First Time Buyers?

There are two main schemes, Shared Ownership and the Help to Buy Equity Loan Scheme. Shared ownership is essentially you purchasing a portion of the property and paying rent on the rest. Help to Buy is the government lending you your deposit.

In London you can borrow up to 40% as a deposit with the Help to Buy Equity Loan Scheme,  compared to 20% in the rest of the UK. The loan is interest free for five years, but you do have to pay it back.

It depends on your personal circumstances which one’s the most suitable. With Shared Ownership in Northern Ireland, the rent you pay on the portion of the property that you don’t own is actually regulated. Whereas property developers building Shared Ownership properties in England can charge what they like. You also need to consider staircasing fees with Shared Ownership. Staircasing is where you incrementally increase your ownership of a  Shared Ownership property. 

The choice of scheme will depend on what the clients are looking to do with their first purchase, which we can discuss at the initial appointment, where I would explain all the pros and cons of both schemes.

What is an Agreement in Principle?

An Agreement in Principle is a really important stage in any house purchasing process. It’s essentially a lender agreeing to lend you a theoretical amount based on your declared income and outgoings without those figures being verified. 

The lender also does a credit check, with the vast majority of lenders doing what’s called a soft search at the stage of the Agreement in Principle. That means whether your mortgage goes on to be accepted or declined, a mark won’t appear on your credit report.

You’re not committed to that lender at that point, and the Agreement in Principle is usually  valid for one to three months. Throughout this period it enables you to make offers on property, and gives a bit more weight to the offers you make as a buyer, because you can show that you have, in principle, got the financial backing for the purchase.

Have you got any saving tips to budget for a deposit and all the moving costs associated with buying a home?

The most obvious scheme for First Time Buyers is the lifetime ISA. You have to have had it for a year in order to get any sort of government bonus. In London particularly, that 25% government bonus helps with accumulating a deposit. 

Joint Borrower Sole Proprietor is also becoming more popular. This is where a client might have a parent who lives in an unencumbered property and therefore has a lot of spare income, would be jointly on the mortgage with the applicant, but wouldn’t be an owner. Their income is used for affordability calculation, but they’re not actually an owner of the property. This can be particularly popular in London, where overall mortgage affordability is more likely to be the issue than deposit availability. It is a limited term, so if your parents are in their 60s, you’re going to be quite limited by the length of the mortgage term. 

Do you find First Time Buyers come back to you time after time if they need to remortgage?

Absolutely. I usually contact people who’ve taken out their first mortgage with me at a  two-year fixed rate, about four months before the end of the deal. I’ll arrange a quick catchup to see what they are looking to do with the property and to help them avoid going on to the lender’s Standard Variable Rate when their initial deal expires.

The vast majority of business I get from First Time Buyers is them referring friends and family to me, which is rewarding, because it means I’ve done a good job and garnered trust.

Can you advise on Mortgage Protection?

In the vast majority of people’s lives, their mortgage is the biggest debt, so it’s quite important to put policies in place to ensure that you know you’re protecting it. It depends on the client’s circumstances. A First Time Buyer on their own, for example, may not need to put anything in place to ensure the mortgage is paid off if they die, because they’ve got no dependants. Taking out some kind of income protection policy that protects you in the event that you’re unable to work, however, will be helpful for people buying independently.

When should I see a Mortgage Broker?

As early as possible is ideal, but I get people approach me at all stages. People even approach me when they have already put in a mortgage application but don’t like their current broker.

You are based in London, but can you help somebody if they’re based elsewhere in the UK?

Even people in London will always be offered the opportunity to consult with us over video link if they prefer to. It means you don’t have to make your way across London and sit in a room with me for an hour. But with technology, we can obviously reach clients anywhere.

When was the London branch of Pia Financial Solutions founded and how long have you been in your role as an adviser?

I’ve been at Pia since 2018 and the central London office has been there for three years now.

Does it cost for an initial consultation with Pia?

No, it doesn’t. In fact, we at the London branch based in Cannon Street, don’t actually charge any advice fees at all. So there’s absolutely no harm in sitting down with us for a chat.

Think carefully before securing other debts against your home. Your property may be repossessed if you do not keep up with your mortgage repayments. The Financial Conduct Authority does not regulate some Buy to Let Mortgages.

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