Getting mortgage advice from an IFA

These days getting a mortgage can be a confusing and frustrating process. If you are a first time buyer or you have little knowledge of the mortgage market and the products available it is all too easy to end up taking on a mortgage that is unsuitable and could prove unnecessarily costly over the long term. A mortgage is a long term, serious financial commitment and it is therefore important that you get the right mortgage for your needs and circumstances. You may have special circumstances such as being self employed or having damaged credit in which case finding the right mortgage may prove even more difficult.

The choice of mortgage products on the market today can also add to the confusion of finding the right mortgage product and can make it difficult to determine which mortgage will prove the most beneficial. When you are planning to take on such a huge commitment as a mortgage you therefore need to ensure that you get the right advice from an experienced expert in the field. Many estate agents offer financial advice on mortgages, but in some cases you may find yourself being purchased towards a mortgage that is not best suited to your needs, and the estate agent adviser may not be able to deal with specialist needs such as bad credit.

This is why many people decide to turn to an independent financial adviser in order to learn more about the mortgages available to them, and to get advice on which mortgage might best suit their needs. Independent financial advisers are not tied to any one company, and can therefore offer valuable, independent advice on which mortgage might best suit your needs. These advisers have access to a wide pool of lenders, and will know from the details that you provide which lender and mortgage type is best suited to your needs.

However, it is also important to remember that these advisers work on a commission basis in many cases, and this means that they are paid commission from the lenders after referring clients to them. Many consumers worry that their independent financial adviser may therefore recommend the lender or mortgage that pays the highest level of commission rather than working in the client’s best interests. There is one way around this, and this is to opt for an independent financial adviser that charges you, as the customer, for the advice rather than working on a commission basis through the lender. Although this means that you have to pay for your financial advice it also means that there is not reason for the adviser to recommend any particular lender or mortgage, and therefore you can be sure that the adviser is working in your best interests. This could save you a lot of money in the long run, as you are more likely to end up with the mortgage that best suits your needs.

An independent financial adviser can offer an invaluable service to anyone that is looking to get a mortgage and is unsure as to which mortgage will best suit them. Those with bad credit or other special circumstances can also benefit, as the adviser will do much of the legwork when it comes to finding the right mortgage, and this can reduce the risk of further damaging your credit through applications to inappropriate lenders who may end up rejecting your application. You should look for an experienced and reputable independent financial adviser, and request that you make payment for the advice rather than the adviser working on a commission basis.

The large choice of mortgage products available are designed to suit different needs and circumstances, and even if you are going to seek financial advice it is a good idea to familiarize yourself with the different mortgage products on offer so that you have an idea of the type of mortgage that you want to go for. Amongst the different mortgage types available are:

Variable rate mortgages where the interest rate goes up or down in line with the Bank of England base rate. You can get some good deals on variable rate mortgages but interest rates are higher at present because of the series of Bank of England base rate hikes over the past year. One of the major benefits of this type of mortgage is that you can get some good deals and when the base rate falls your interest rate and repayment will fall. The downside, as has been seen over recent months, is that rising interest rates mean that your repayments could shoot up.

Fixed rate mortgages where the interest rate on the loan is fixed for a certain period of time, which is commonly two, three, or five years. Recently many lenders have started offering longer term fixed rates of ten years or more. The major benefit to this type of mortgage is that it allows greater financial stability because your repayments will remain the same through the fixed term no matter what happens with the base rate. On the downside, your repayments will remain the same even if the base rate falls, and the initial interest rate is higher than the rate charged on variable rate mortgages.

The above are two of the most common mortgage types, but others include discounted mortgages, base tracker mortgages, offset mortgages, capped rate mortgages, and others. You also need to bear in mind that you will have to choose between an interest only and a repayment mortgage