May 20, 2015
Knowledge vs. Wisdom
If wisdom is said to be knowledge coupled with experience then first time buyers who do not seek the advice of a mortgage broker, by definition, enter into mortgage agreements with no wisdom what-so-ever. I am not meaning to insult any first time buyers out there. Rather, I am attempting to make plain the reality and situation a first time buyer is in to emphasise how vulnerable being in that position leaves them.
The best way to avoid joining the unfortunate first time mortgage lenders described in the Business Financial Post article ‘Horror Stories from First- Time Home Buyers: 7 Frightening Pitfalls to Watch for Before You Buy’, is not to simply read the article, but act upon it. I mention the article only to further expound how easy it is to allow yourself to become a victim of a first-time mortgage lending nightmare; if you are reading this it is safe to assume you are someone who is at least attempting to do their research.
My advice to you, as a first time buyer, will always be that no amount of online, independent research or advice from family and friends (however informative and kindly given) will ever be as valuable as that provided by a professional and expert mortgage broker. Despite this fact (and it is a fact), thousands of us enter into mortgage agreements every day with little to no real understanding of our rights or the position we are stepping into. Whilst it may ‘work out’ just fine for many of us, a home is usually the most expensive purchase a person will make in their lifetime, hence it is not a purchase with which to gamble.
A Mortgage Broker vs. A Mortgage Lender
A mortgage broke cannot offer you a mortgage. Meanwhile, a mortgage lender can offer mortgage advice. So, why seek the advice of an independent broker? We spoke with one of the UK’s most experienced mortgage brokers, Andrew Craddock, who stated on the subject, “quite simply, because the advice of a mortgage broker is given without bias; their advice can prove both invaluable and is given without an attached agenda. You are paying for nothing but their advice and because they rely on people doing exactly that, you can ensure a mortgage broker will always give their best advice and do their best to advise you – their livelihood depends upon it, quite literally.
Completing Mortgage Applications
Before you even get to the stage of negotiating the terms of your mortgage, you must submit an application...and that application must be accepted by a potential lender. In February of this year (2015) alone, mortgage providers approved 21,900 loans which collectively totalled £4.1bn, according to the Counsel of Mortgage Lenders’ website. Suffice to say, mortgages are big business and consequently banks and lenders often have strict criteria about who they will lend to. Your job and or career security, income and location are three of the major factors in a bank or lender’s decision as to whether to consider lending to you.
A poorly completed application can very realistically damage your chances or even alter the terms upon which a lender is willing to consider you for a mortgage. Even worse, it is not uncommon for a rejected application to impact negatively upon your credit rating which could in-turn further damage any future or subsequent attempts to secure a mortgage. The best way to avoid being turned down or experiencing ‘hitches’ even before you have secured a mortgage is to let an impartial expert review your application before it reaches potential lenders.
For free, impartial advice and the latest statistics on mortgages and first time lending, continue your research by visiting the UK Government’s Official website.