Home loan: Independent Mortgage Advice

The credit crunch and the downturn of the country’s economy has brought the situation to such a condition that mortgages are being given out only if eligibility criteria are being satisfied. Even though the new administration has injected billions of dollars into the mortgage market the financial institutions and banks are skeptical about giving loan to anyone and anybody. They do not want to repeat their mistakes. Thus mortgage advice has become invaluable.

Lenders even now want to give loans, they still are heavily sales oriented. Thus it makes it very difficult to determine if you are in front of a sales person or an advisor. To make sure that their sales pitch does not take you for a ride it is very important to ask a couple of relevant questions an also make sure that the documentations are read very carefully and understood.

An independent mortgage advisor is the need of the hour. They would be able to suggest a greater range of options and as it is seen very often more options automatically implies more competition among lenders and better rates. An independent mortgage advisor is more resourceful and would be having access to the whole market. This means that they would be in connections with more than hundred lenders. They might have more connections that this but the Initial Disclosure Document which is regulated would refer to them having the whole market at their disposal.

To make sure that you are actually dealing with an independent mortgage advisor you just have to check the mode of payment they prefer. Most independent mortgage advisors prefer to give payment options of a fee or commission. Thus you can verify if the lender was suggested in greed of a higher commission or not. Whatever the mode of payment chosen by you, the advisor is required to give the reasons for suggesting a particular lender and its justifications in a written form to you.

Some advisors work within a panel of lenders while there are others who have a panel so big that FSA, industry regulators all consider him to be independent. Thus it is good if you are able to ask and ascertain the method which is adopted by the adviser you are consulting. This is made clear in the disclosure document initially under normal circumstances.

There are two types of independent mortgage advisors, the multi tied or restricted to a panel advisor and the tied advisor. Many advisors found in the market are multi- tied advisors and have a panel of lender they usually would recommend. The panel of lenders would range from ten to thirty lenders. These include famous high street names also. Corporate estate agents have advisors working for them exclusively. Multi tied advisors work on a strict commission basis which they get from the lender.

Tied advisors recommend their own mortgages and usually do not ask many questions. Examples are banks and building societies. The choice of advisor to approach is completely yours. It would be beneficial to approach an advisor who can recommend high street banks also.