Posted: 21.07.21 at 09:38 by James Wyman
Hitchin Nub News is delighted to provide a platform for expert financial commentary through our innovative partnership with Lyndhurst Financial Management, who support our coverage of the local community by being our headline sponsor.
Founded in 1992 operating from Harpenden and having acquired an office in Hitchin in 2015, the firm has supported the local community for many years.
They value the contribution their staff make to helping Hitchin, Harpenden and the surrounding areas such a thriving place to live and work.
So, read on for expert financial commentary from Lyndhurst financial advisor James Wyman.
Comparison Website or Mortgage Advisor?
For most of us a mortgage will be the biggest financial commitment during our lifetime. When it comes to arranging a mortgage, you have two options:
1) Finding your own mortgage product and then apply direct
2) Or use a mortgage broker
The rise of comparison websites has meant that we are able to shop around for the best deal on the market with surprising ease.
Many financial products lend themselves to using comparison sites, such as searching for the best savings rate on a Cash ISA or finding the cheapest car insurance quote.
However, when it comes to more complex financial products such as mortgages, going to a comparison website and then direct to a lender could easily end up costing you more than using a mortgage adviser.
Due to the size of the commitment it is important that you get the mortgage which is right for your personal circumstances.
It is easy to use a comparison site to find the cheapest current rate on the market, but there are more factors which need to be considered when choosing a mortgage such as introductory offers, the rate beyond the fixed period, and potential product fees.
You may apply for a particularly attractive mortgage without realising that there is specific criteria which you do not meet resulting in a higher interest rate than you first thought.
Using a specialist with in-depth knowledge of the complexities of mortgages means that you will apply for the product which best suits your needs.
There are three main types of mortgage adviser:
1) Tied Adviser – they are only able to offer products from a specific lender
2) Multi Tied Adviser – they can look at deals from a limited number of lenders
3) Whole of Market Adviser - they are able to scour the marketplace for the most suitable product and lender
You should be aware that even Whole of Market Advisers don’t cover everything as they are unable to advise on mortgages which are only available if you go to the lender directly.
All mortgage advisers must offer you advice when recommending the most suitable mortgage.
This means you are protected and can complain to the Financial Ombudsman if anything goes wrong.
The main advantages of using a mortgage adviser over a comparison website are:
• They’ll check your finances to make sure you can afford a mortgage
• They’ll help you take all the costs and features of the mortgage into account, beyond the interest rate,
• They might have exclusive deals with lenders, not otherwise available,
• They should only recommend a mortgage that is suitable for you and will tell you which ones you’re likely to get,
• They often complete the paperwork for you, so your application should be dealt with faster,
• They will give you advice and guidance on different surveys available, legal work, and insurance requirements,
• They’ll chase up and answer any queries the mortgage provider may have,
• Through follow up communication they can ensure you keep to the best deals throughout the mortgage term,
• You have more rights if the mortgage sold to you ends up being unsuitable,
Using a comparison website is a good starting point if you’re trying to see what sort of deals are available on the market.
However, you should be aware that comparison websites will not all give you the same results, so it is important to use more than one site before making a decision.
It is also important to do some research into the type of product and what features you need before applying for a mortgage.
Mortgage advisers might charge a fee for their services depending on the product you choose or the value of the mortgage.
Others will be free, but they’ll receive commission from the lender.
They should tell you up-front how much you will pay for their services and if they are paid commission.
James Wyman is a financial advisor with Lyndhurst Financial Management
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