Why an online broker could be the key to a stress-free mortgage
Taking out a mortgage is a big commitment. For many of us, it’s the largest financial commitment we’ll ever make.
In fact, tough new affordability rules introduced in 2014 – as part of the Mortgage Market Review– mean borrowers face many more detailed questions before being offered a deal. This could include having to give information about your income, as well as your spending habits, even down to the amount you spend on haircuts in some cases.
Getting a mortgage isn’t something we do very often either, so understanding how to go about it can feel like a complete mystery without prior experience.
In addition, applying for a mortgage can involve a vast amount of paperwork if you use a traditional broker or lender.
Our own research of 2,000 people has shown that:
40% of home owners recall their previous mortgage experience negatively.
two in five homeowners found the mortgage experience stressful (that’s equivalent to 625,000 home owners every year!)
one in five said the vast amount of paperwork needed for their initial application caused the most stress.
15% blamed the industry’s widespread use of jargon for adding stress.
For a long time, using high-street brokers, going directly to lenders, or trawling through comparison sites were the most common ways to get a mortgage. But in the last couple of years a new online breed of broker came to the market offering a different kind of service.
So could online mortgage brokers be the key to a stress-free mortgage experience?
One person who experienced the stress of getting a mortgage via traditional methods was first-time buyer Ben.
Ben, who’s 38, found his dream home - a lovely three-bed end-of-terrace house in Harrogate – in August last year. But he felt uncertain and apprehensive going into the mortgage application process for the first time.
“I didn’t really know where to start,” says Ben, a Director of Outreach at technology company Digital Science.
“Until then, I’d always lived in rental accommodation, so hadn’t given any thought to trying to get a mortgage. At the outset, I tried calling a few of the banks myself to see what they could offer, but in each case, the mortgage application process seemed very complicated and confusing.”
“It was difficult and stressful trying to get my head around the different rates and deals – especially as those deals kept changing. I was worried I’d miss out on a more competitive rate. I was also concerned I’d end up signed up to products that I didn’t want.”
After a bad experience with the banks, Ben asked his estate agent how best to proceed.
“The estate agent directed me to its in-house broker who was based in an office inside the estate agent offices,” he says.
“The broker quoted me fees of a few hundred pounds – which did seem a bit pricey. On top of that, when I got close to putting in an offer, the broker suddenly informed me that he was going to be on holiday for 10 working days – leaving me really stuck. This brought home just how scary it can be putting your faith in someone else for one of the biggest decisions of your life.”
At this point, Ben decided to get in touch with us.
“Straight away, the mortgage application process felt less stressful, as my adviser, Prakash, took a really proactive approach,” says Ben.
“I’d been worried about a vast pile of paperwork, but Trussle helped with all of this and ensured the application was filled out correctly – meaning I didn’t have to worry about a thing.”
“Prakash also helped me get a fixed-rate deal of 2.09% with Nationwide which was far better than any deal I’d heard about from other brokers – or the banks. On top of this, there were no fees to pay.”
“While buying my first home was a pretty stressful process, getting a mortgage with Trussle was definitely the un-stressful bit.”
Ben moved into the home in Harrogate in October last year with his girlfriend Zuzana. We’re told they’re both very happy and settled in their new home!
What does an online mortgage broker do differently?
Any good mortgage broker should be able to help you plot a path through the mortgage maze, and guide you through the application process from start to finish.
Unlike a member of staff at a bank or building society who can only talk about the limited range of products they themselves provide, a mortgage broker can compare deals across a wide range of lenders. Do be sure to ask how wide their coverage is, however, since - confusingly - not all brokers will consider the same range of lenders.
With an online mortgage broker, you’ll typically be able to see your mortgage options without having to book a meeting or phone call. If you have any questions, you can simply speak with a mortgage expert using the online broker’s web-chat. Best of all, there’s no paperwork to fill in.
That said, it can still be stressful putting your faith in someone else to guide you through one of the biggest financial decisions of your life.
After all, if that person makes a mistake and applies to the wrong lender, you could end up paying way over the odds. Worse, you could end up getting rejected which could lose your dream home if you then have to start another mortgage application.
A good way to check whether a broker is reputable and trustworthy is to look at the reviews left by their customers. You’ll find many of our customers reviews on Trustpilot, for example. Google Reviews is another great place to look.
Tips for a stress-free mortgage experience:
Get your finances in order ahead of applying for a mortgage. It’s worth doing this at least three months before submitting an application, though it may be worth changing your spending habits up to a year in advance, as lenders will go through your bank statements with a fine-tooth comb.
Take steps to improve your credit rating. This includes registering on the electoral roll, checking your credit record for any blemishes or mistakes, paying off debts, and closing unused accounts. If you don’t have a credit history, consider using your credit card often and pay it off each month.
Gather your paperwork. Almost all banks will let you download your statements online, so get started by getting hold of your first 12 months’ statements. You’ll also want to gather your payslips from the last few months. If you’re self-employed, collect together three years of accounts or SA302s tax returns.
Make sure you have an estate agent, a solicitor, and a mortgage broker that you trust. You’re putting your faith in these individuals to manage one of the biggest decisions of your life. You need to be able to rely on these people, as they’re the ones who will ensure the transaction goes through as smoothly as possible.
Consider an online mortgage broker. An online mortgage broker offers a convenient hassle-free way to get a mortgage. They’ll help you find a deal from a wide selection of lenders, without any paperwork. And, as they receive a fee from the lender when you complete the mortgage, you don’t have to pay a fee for their services.
This article was written by Esther Shaw, an award-winning financial and property journalist who’s written for The Independent, The Mail on Sunday, The Telegraph, and Good Housekeeping.