UK mortgage expert: the key things you need to know
Big picture stuff
Anthony Emmerson is a mortgage broker at Trinity Financial. If you have questions, you can email him on hello@trinityfinancial.co.uk.
A mortgage in principle isn’t worth the paper it’s written on because the lender gives them out without doing a credit search. This means you don’t know if you’d actually be able to get the mortgage.
Different lenders value income in different ways. A mortgage broker (sometimes called a mortgage advisor) can help you understand what you can get from each.
If you go to your bank, you can only get the bank’s mortgage products, not from the rest of the market.
This is where a broker can be useful - they can search the market for the best deal for you.
But, some brokers aren’t ‘whole of market’, so please check that first.
Anthony says most mortgage brokers do a similar job, with similar software - so find someone who you like.
Oh and be warned, some mortgage brokers double charge. They get paid by the lender (all mortgage advisors do) and then they charge a fee on top to the borrower.
It’s worth speaking to your broker when you’re considering big life decisions, like a new job, starting a business etc.
Anthony finds most people don’t overpay their mortgage, whatever their intentions before.
You pay off most of the capital (money you’ve borrowed) later in a mortgage; you pay more of the interest earlier on (if you're doing a repayment mortgage).
The interest rate that banks charge isn’t just derived from the Bank of England base rate. For instance, banks lend to each other - and those swap rates are key to the rates on mortgages.
The top six mortgage lenders are really competitive with each other, fighting for market share. They control their deals and revenue through their rates. If one has a quiet month, then you might find them cutting their interest rates the next month to drive new customers and revenue.
First time buyers
Anthony says the big problem for first time buyers is not being organised enough on the money side of things.
He suggests getting your finance ducks in a row first, before searching, because you don’t want to fall in love with a property only to learn later that you can’t afford it.
It’s also sometimes not clear how to arrange your finances because it can depend on the property, e.g. for one property you might need a chunk in cash, so you can do some build works.
This is why it’s useful speaking with a broker who can guide you through the process.
Full disclosure, I know this because Anthony is my mortgage broker (Will, the guy writing this - Damo’s Co-Founder) and he’s helped me and quite a few friends over the years which is why we got him on the podcast.
Btw it’s my house where the podcast is recorded, so you could say Anthony sorted out the mortgage for the podcast.
The average first time buyer is in their property for 3.5 years… surprisingly low.
We also learnt about a ‘joint borrower, sole proprietor’ deal. It means someone can be the sole owner of a property but with multiple borrowers, like a parent. This means they can leverage their parent’s finances, effectively like a guarantor (but not called a guarantor).
You need to know these things before getting a mortgage
Your credit score. Lots of people don’t know they have something on their record from years ago. You can go onto ClearScore and get your credit report for free.
Your debts. How much do you owe and to whom?
Your income, in all forms.
Your expenses.
If you’re self employed
You need to be able to show two years of signed accounts, and show your business is solvent (not broke).
If you expense a lot of things through your business (rather than paying for stuff from your income) it can look like you earn a lot less money because you’re not paying yourself loads.
It’s important to make good decisions before each tax year ends, with your mortgage in mind, e.g. if you’re just about to remortgage, perhaps you want to pay yourself more in the tax year so you can borrow more.
Remortgaging
When you’re 6 months before your deal ends, Anthony suggests getting in touch with your broker because you can get a deal from them on (and properly start assessing the market anyway).
A broker needs about 6 weeks to switch your mortgage from your current lender. Whereas if you stick with your current lender, you can remortgage up to about the 20th of the month your current deal expires. This is because the bank needs to set up a new Direct Debit.
The guidance is to always review your remortgage options from across the market (when a deal is ending) so you can find the best deal.
If you have questions, you can email Anthony on hello@trinityfinancialgroup.co.uk.
If you purchase a mortgage product through Trinity Financial, we will receive a small commission from them. There will be no additional charge for you.
