If you’re reading this article, then you are probably the sort of person who likes to be informed before you make a decision. You may understandably, therefore, be wondering if you need an adviser at all for your mortgage. Notwithstanding the fact that you’re a first time buyer, and this is your first mortgage, you’re thinking you should be able to pull it all together yourself and not have to pay for the services of someone to do it for you. And that’s very possibly the case, but it’s worth being aware of what benefits you get if you go through an adviser.
An adviser affords you a level of protection
Any advisers providing advice on mortgages have to be qualified to do so. Other than the fact that this means they understand the complexities of the mortgage market, an adviser who is regulated by the FCA (Financial Conduct Authority) also has a duty of care to you. They have access to the whole of the market and, because of this duty of care, have to recommend a mortgage that is suitable to your circumstances. If they fail to do this, you are protected and have the right to complain and be compensated.
An adviser is on your side
Because advisers have access to the whole of the market, they really are looking for the best mortgage for you. They aren’t on the lender’s side, and their advice is unbiased. If one lender doesn’t offer the right sort of product for your circumstances, other lenders will. An adviser will seek those products out.
They have experience and knowledge – things that take time to build up
Submitting an application for a mortgage these days isn’t as simple as just filling in a form. There are a lot of hoops to jump through to prove that you can actually afford a mortgage, and it’s easy to make a mistake. With this in mind, it’s worth knowing that each lender has its own preferred criteria. An adviser understands what these are and can therefore save you a lot of time and heartache.
An adviser is mindful that it’s worth borrowers being aware of other financial products available when they have a mortgage. Life insurance, for example, to ensure the mortgage is paid off in the event of the mortgagee’s death. And of course, there’s buildings and contents insurance too.
A good adviser, who has experience and knowledge, will also be able to provide you with advice on other types of protection too with respect to your mortgage arrangements. Examples would be:
- Death cover
- Critical illness
- Long term illness
- Payment protection
But how does an adviser make their money?
There are two ways an adviser can earn their crust:
- By charging you a fee
- By receiving a commission from the lender – for putting business their way
Either way, however, it’s important to note that your adviser has to provide you with a Key Facts document that details any fees or commissions they make.
Only you can decide if the benefits of using an adviser are right for you. It’s true that they will either charge a fee or make a commission for their services. However, in return for that, as a first time buyer you are working with someone who not only has knowledge, experience and access to the whole of the market but is also helping you find the best mortgage for your circumstances.
Other articles in this series written for first time buyers…