The risks of going direct to a lender WITHOUT independent mortgage advice.

We may be a little bit biased, but independent mortgage advice really does matter! Whether it’s your very first home or you’re selling up and moving on, we understand just how tempting it is to go directly to your bank and keep things simple. Yet things may not be as simple as you think…

There are actually many, many advantages to doing the opposite, with those seeking independent mortgage advice to compare deals based on their circumstances having A LOT to gain. In this blog post, we explore the risks of going direct to just one lender and the rewards of going independent when seeking mortgage advice to support your upcoming property purchase.

You’ll be restricted with just one lender

Despite the UK mortgage market being very well regulated, it is important to recognise that there isn’t one set of rules governing how lenders work. In fact, each UK lender has its own mortgage affordability model, income multiples, approach to self-employment and credit history, and property valuation criteria. This means not every mortgage application is assessed in the same way.

By applying with just one lender, you could be limiting yourself, accepting their criteria rather than benefiting from the flexibility of another lender. With help from an independent mortgage advisor, you can find a lender that’s the best fit for your circumstances and get an even better deal in the process.

You risk missing out on a property you love

With differing affordability rules, you may find that calculations on what you can afford to borrow vary when comparing mortgage deals. This can be restrictive, especially if the only lender you approach informs you that the property you’ve set your heart on is financially out of reach.

It’s common for first time buyers, upsizing families and self-employed applicants to be told they can’t afford the properties they want, which can be disheartening and set your property buying plans back a few steps. Taking a whole market view however could help you find criteria that works better for your individual circumstances, so you can get the “yes” you need to go ahead with the purchase.

You could unwittingly put future plans on hold

Equally dangerous is being approved for more than is comfortable for your circumstances. A lender may approve you at their maximum, and while this sounds like a positive, long term the story may be very different. Footing the bill for a bigger mortgage may become unmanageable, which means future plans might need to change to accommodate steeper repayments.

By borrowing a more realistic amount, you have the option to consider overpaying on your mortgage later down the line, which – as The Independent describes – can save a significant amount of money and time:

“Overpaying your mortgage could result in saving thousands of pounds over the term of the loan. For example, if you had a £300,000 repayment mortgage with 20 years left to go with an interest rate of 4 per cent, your normal monthly payment would be £1,818. If you increased your monthly payment to £2,000 (an overpayment of £182), you’d pay off your mortgage two years and seven months quicker. You’d also reduce the total amount of interest you paid by £19,690.”

You may not receive the specialist help you need

The property buying process can be filled with complexities, from long, drawn-out property chains to complicated income and adverse credit. With this, staying loyal to an existing lender or your preferred high street bank can sometimes cost far more than you realise.

Again, the secret is independent mortgage advice that’s based on your circumstances, and yours alone. Here at The Mortgage Bureau, we understand that one size doesn’t fit all, and scour the market on your behalf to find you the very best deal. Speak to our independent advisors today to get the ball rolling!