An adviser considers all your circumstances and makes a recommendation based on your individual requirements, not just offers the “cheapest” rate. This is the real benefit of a full advice and recommendation service. Consider using a best buy table to select the cheapest 5 year fixed rate. You are planning to move house in 3 years time but when you approach your lender at that time, you find out that you chose a product that doesn’t offer portability (the ability to move the mortgage to another property without penalty) and to move house you are being hit with a £5k early repayment penalty. How cheap is that “best buy” product now?
Under Financial Services Authority (FSA) regulations when you go see a Bank for a mortgage or any mortgage adviser whether they be in an Estate Agent or an independent mortgage adviser, you must be provided with an “Initial Disclosure Document” which confirms the level of service that you are being offered by that particular organisation. It is an extremely important document and you will discover whether you are actually being offered “advice” or as in the case with most Banks, information only on their own mortgage products so that you can decide which scheme is most appropriate for you.
Unfortunately, the FSA has made the level of advice being offered to consumers extremely confusing by breaking “advice” into 3 sub-sections:
- Whole of market
- Limited panel
- One single product or lender
If you were to select a whole of market adviser (supposedly the best level of service available), you would expect to have access to every single mortgage product currently on the market but unfortunately this is not always the case. A whole of market adviser only has to offer products that offer a fair analysis of the market so you are unlikely to be offered some of the smaller regional Building Societies that have some excellent products and criteria.
To be sure that you are getting a true whole of market service, you need to use a mortgage adviser that is independent which means that they will use all lenders and give you the option of paying a fee and rebating any commission back to you that they receive from the lender.
Mosaic Mortgages will offer you the option of Independent advice but we acknowledge that not everyone is willing to pay for that advice. (The typical earnings from a lender introductory fee is 0.35% of the loan amount so on an average £100,000 mortgage, we would receive £350. However not all lenders pay an introducer fee so would you be willing to pay out £350 for the advice?) To ensure that everyone has access to independent advice, we have decided to charge only a £99 fee for receiving a recommendation & Key Facts Illustration should a “Lender Direct” product be more beneficial for you. We will also allow you to choose whether you want to be offered schemes from lenders that wouldn’t pay us a fee & advise you at the outset if we feel that a “Lender Direct” product is more appropriate for you. We are working on your behalf to get you the best deal and are not working under any sales target that you will see in the banks or Estate Agents.
Whilst these publications provide useful information on the cheapest rates on the market, how can you be expected to choose the most appropriate product for your circumstances without any real understanding of how the different mortgage products work? Furthermore, when a mortgage product is quoted as a best buy, typically the service standards of that lender are abysmal as they are inundated with applications. To combat application backlogs, lenders tend to cherry pick the applicants that they want to attract and they may take 2-3 weeks to initially assess an application before declining without giving any reason. Whilst we cannot second guess lender’s credit scoring models, we will make an informed assessment based on your credit history and discuss your purchase / remortgage timeframe as it is usually pointless recommending a lender with the best rate if you have a 4 week deadline to secure your dream property or your credit history will preclude you from applying for the product. A best buy table or comparison site does not have the inside knowledge to provide advice on either credit score acceptance or processing service standards and backlogs.
Your Bank may well have the best product for you but how can you be sure without speaking with an Independent Mortgage Adviser? Banks can only offer their own mortgage products & the majority of Banks only offer an information only service meaning that they need you to choose your own deal from the products they have available. They are not offering advice even if your interview is with a Bank “Mortgage Advisor”! We will compare what you have been offered with what is available in the rest of the mortgage market and we will tell you if we are unable to find a better deal. We are working on your behalf not for the lender.
I've been to the Bank for a mortgage & felt pressured by them into taking associated general insurance & protection products, do I have to take them?
The short answer is no, but as with mortgage advice, we are able to offer independent advice from the whole of the market on protection and general insurance and will discuss your needs & particular circumstances as well as considering the available budget that you are willing to commit to protecting your mortgage and family before making a recommendation as to the most appropriate products. We will explain what the various products on offer will do for you and as we are not target driven like your Bank sales staff, we are considering your specific needs and requirements in making the recommendation. As we have access to the whole of the market, I would be surprised if we were unable to find more cost effective as well as more comprehensive cover than offered by the Bank “Adviser”. We will continually review your circumstances to ensure that any chosen products meet your needs and as affordability improves, you may be able to upgrade your cover as oppose to feeling forced to take everything from the Bank on day one.
We understand that you work during the day as well and do not need the hassle of going into the Bank to arrange your mortgage. We offer a telephone based advisory service and can speak with you at your convenience with advisors available until 8pm during the week. Our telephone interview typically takes 30 minutes to take all the relevant information that we need in order to make our formal recommendations but we will take as much time as you need to explain how the various product work so that you fully understand why the chosen product meets your particular requirements.