This may seem like a strange post for a mortgage broker to be publishing but I’m going to give you a little DIY advice.
Due to the wonders of the world wide web, you no longer have to trawl the high street and talk to each bank and building society you can to find out who has the best mortgage deal.
There are loads of comparison sites you can access now, from the convenience of your sofa, and you’ll largely get to see the same deals that I can on my system (so why would you need me? Answer here).
How To Compare Mortgage Products
When inputting your details I would try and put as much information in as possible so the data returned is more accurate. Often on the comparison sites when the deals are shown there may be “sponsored” deals at the top. This is a bit like a Google search where the sponsored links are at the top of the page, so make sure you check the deals lower down to ensure you are getting the full picture.
Another thing to look out for are the fees. All the lowest interest rate deals on the market have lender arrangement fees; on average £999. Paying a fee isn’t necessarily always appropriate, depends on how much you are borrowing really.
Valuation fees usually are payable when you are purchasing a property, the amount is dependent on the value of the property so watch out for this as well.
Often overlooked are the cost of legal fees. This is mainly when you are seeking a remortgage. Many lenders offer “free legals” which basically means the lender will pick up the cost of a standard remortgage. In my experience the comparison sites are not very clear on this so often the deals that appear to be the cheapest might not include the costs of legal fees. This can be around £500 so it is often more cost effective to have a deal where the lender pays for this.
You need to be financially confident that you understand the jargon and you know your circumstances so you can narrow down the right deal. Ideally if you are confident then you can apply direct via a lender’s website thus bypassing the wait for their adviser to call you.
The lender will perform their own affordability calculation to establish if you can afford the mortgage so you’ll need to disclose all your financial information to them. As a rule you’ll need to give them details of what comes in (income) and what goes out; personal loans, credit cards, school/nursery fees etc. etc..
Make sure you are prepared to send in your paperwork. They may ask you to email or upload your documents to a secure portal. If this is the case it is probably best to have all your documents scanned in ready before you apply. You will need:
- Copy of your Passport or Driving Licence
- Address ID – utility bill or Mortgage Statement or Council Tax bill (not mobile phone bill)
- Latest P60
- Last 3 months payslips
- Last 3 years accounts if self employed and last 3 years SA302 Tax Calculations with corresponding Tax Year Overviews (from HMRC Website)
- Last 3 months personal bank statements
- Evidence of Deposit/Savings
Once the application is underway the lender may come back and ask for more stuff, depending on how the credit score pans out, and some lenders also ask for clarification on items they see on your bank statements.
All in all it is about being confident that you can understand all the terminology and you have the time to complete the application yourself. It is certainly getting easier these days with all the technology.
The final thing to be aware of though is that if you decide to do it all yourself then you will not be deemed as having received advice. This means there is no comeback on the lender, you can’t have been mis-sold if you sold it to yourself.
You should also bear in mind that if your mortgage application is refused it can affect your credit score. This in turn may affect your ability to secure another mortgage product. Therefore it is important to make sure that your figures add up, you have all the documentation needed, and that you’re confident that your application should be straightforward. One of the advantages of using a mortgage broker or adviser, is that they’re expertise increases the chances of being offered a Mortgage Agreement in Principle and that also helps protect your credit score.
However I wouldn’t let these factors put you off, as I said it’s all about your own confidence to carry out the legwork.
If you decide it is not for you, you know where I am!