Mortgage Information

Many experts have been demanding that banks and other lending
institutions provide more accurate and clear information on the costs of
their mortgage advice. The current regulations can mean that a bank can
appear to have much lower costs associated with a mortgage loan than,
say, a mortgage broker, who is obliged by law to declare all of their
fees and charges. This puts mortgage brokers at a disadvantage when
trying to secure business as they are bound by different rules regarding
fee disclosure.

And for the consumer it makes it difficult to compare the cost of a
large mortgage between a deal offered through an intermediary such as a
broker and one offered directly by a bank or building society. Anyone
borrowing for a home loan should make sure to obtain all the information
they need to make a true comparison of products; brokers can sometimes
seem expensive when compared to banks but this is not necessarily the
case.

Under the present UK regulations, mortgage brokers are
obliged to provide a Key Facts Illustration, which declaresthe upfront
advice fee and reveals the cost of the fee paid to procure a home loan
i.e. the fee the broker receives from a bank for arranging the home
loanon their behalf. But mortgage advisers at banks and building
societies have to state only minimal information of this kind and the
cost of the financial advice can seem to the customer to be completely
free, when this may not be the case.

Experts would like to see
more transparency from mainstream lenders about the true cost of any
mortgage advice that is offered to a customer because at the moment it
is hidden by the interest rate and by underlying banking costs such as
salaries and bonuses.

This issue could worsen in the coming months because in April 2014 new
rules are coming into force in the UK so that all mortgage product sales
will have to be arranged to include advice. So mortgage advisers will
have to include the full cost of their advice clearly on each Key Facts
Illustration, which may make any differences between the cost of advice
directly from a bank and via a broker seem even greater.

Bank
quotes for home loans typically indicate either no fees or very low fees
so brokers are likely to seem expensive in comparison. It will,
therefore, be more important than ever that mortgage brokers can prove
their worth, particularly to high net worth customers. They will need to
show that their advice is worth the fee and that customers are getting a
better deal from a broker who can advise on a range of products from a
range of lenders rather than just the mainstream lenders.

Clearer cost of sale information on mainstream bank illustrations could
actually be beneficial to the banks in improving efficiency as they
would then, themselves, have a clearer view of the real cost of
providing mortgage advice. If banks had this clearer view of the cost of
providing mortgage advice in terms of salaries, branch costs, bonuses
etc. then they might think it worth selling their mortgage deals through
brokers. Indeed many mainstream lenders are starting to believe that
acquiring large mortgage customers would be less expensive through
intermediaries such as mortgage brokers than it is through their own
high street branches.

The credit crunch forced lenders to revisit their mortgage policy
and, over the last few years, there have been some seismic changes to
the large mortgage industry in the UK. One of the major repercussions of
changes to lending policy and mortgage rules has been that there are
now far fewer mortgageoptions for older borrowers or those wanting to
borrow into their retirement.

Mortgage Strategy reports that older people are
facing a rapidly shrinking market as providers cut the maximum age on
their standard mortgage ranges. But, should lenders restrict high value
mortgage lending to older clients? And what options do you have
available if you’re an older person looking for a mortgage? We look at
the issues next.

Cuts in maximum age limits make it harder for older borrowers to get a mortgage

Before the global financial crisis, most banks and building societies
would lend up to the age of 85, making it relatively easy for borrowers
in their 60s and 70s to get a home loan. Today, however, the choice of
mortgage options has shrunk significantly with many lenders slashing
their maximum age to just 65 or 70.

Even in the last few months
lenders including the Skipton, Leeds and Newcastle building societies
have cut their maximum lending age to 75. But, have lenders gone too far
in restricting high value mortgage finance to older borrowers?

Is it time for lenders to change their policy towards older borrowers?

Mortgage Strategy’s recent poll found that 68 per cent of respondents
believed banks and building societies are too strict when it comes to
lending to the over 60s.

And, earlier this year, several high profile industry experts said that
lending into retirement must become easier. In a panel discussion in
early 2013, Sesame chief executive George Higginson said current
restrictions are ‘not right’ and failed to reflect the needs of a
workforce which is being asked to work for a larger proportion of life.

In his opinion it is not right to expect people to pay off their
mortgage before retirement. Hardly anyone will retire at 65, and many
will probably have to work into retirement. If that is the case now, the
nature of products available will also have to change and there need to
be new designs and products coming to the market in the near future.

Islay Robinson, CEO of London mortgage broker Enness Private Clients,
agrees that there are still lenders out there who will consider
approving a large mortgage for older clients but they are harder to
find. However, brokers such as Enness have access to a wide range of
lenders, many of whom have the underwriting flexibility to look at
individual cases on their merits and make a sensible lending decision.

The industry does need to take a hard look at the options for older
borrowers. If someone in their 60’s has guaranteed pension or investment
income and the ability to service a loan, why should they be treated
differently to someone much younger?

Mr Robinson, the London
mortgage adviser and million pound mortgage expert believes it has
become more difficult for older borrowers to secure a large mortgage.
Many High Street lenders have reduced their maximum age limit and it
means that older borrowers who want to save money by re-mortgaging or
who want to move home are finding that their options are very limited.

A mortgage broker is a specialist who is trained to help you choose the
best deal in the market. Their services do not come for free, but the
fee is worth the money because your mortgage is more than likely to
outlast much of your furniture! So how does one choose a good broker?
Here are a few tips to help you;

a) Do you need a broker: Unlike the good old days of yore, mortgage
calculation isn’t simply about choosing between variable and fixed
interest. Almost every borrower has laid claim to a special type of
loan- you can now choose from a self-certification mortgage, an offset
mortgage or some other type. A broker can make sense of the different
types and help you choose one that suits your circumstances. If you are
one of the those who can’t be really bothered about shopping for the
best financial package, and would rather prefer someone else do it for
you, a mortgage broker is just right for you.

b) Choosing
between a tied or independent brokers: Tied brokers work for a
particular service provider and offer you loan options related to his
employers. They usually work for free, but are not always reliable.
Independent mortgage brokers however, do not work for anybody. They
charge you a onetime commission, but in return give you different
options offered by other borrowers. He or she can suggest you a loan
scheme that best matches your condition.

c) Credentials: In the
UK, mortgage brokers should be authorized by the Financial Service
Authority or FSA to give you advice on financial matters. You can always
check if your broker is registered with the FSA through the agency
website. The Mortgage Code Compliance Board or MCCB is also an authority
on this issue.

d) Get everything in writing: Mortgage brokers
in most cases promise you a lot, but when it comes to enforcing them,
almost all of them disappear into thin air! Make sure that these
promises, including details about their fees in writing.

e) Open Communication: The mortgage broker should openly communicate about the process.

f) When things go wrong: If things turn sour between you and the
broker, you can always lodge a complaint or ask the MCCB to address your
grievances. If the broker is tied to the Mortgage Code and does not
offer a satisfactory reply, the MCCB can initiate disciplinary action
against the broker.

These are just some of the points to be considered to help you find a mortgage broker.

If you are attempting to purchase a highly desirable home that is
attracting interest from other potential buyers then receiving your
mortgage offer as quickly as possible could make the difference between a
successful bid or not. If you can prove to a vendor that your mortgage
is in place this could put you in an advantageous position to buy the
property; buyers always want to get their mortgage offer as soon as
possible.

But new EU regulations introduced in Autumn 2013 may result in
increasing the time it takes lenders to issue mortgage offers. The new
European directive is intended to ensure that mortgage offers are
binding and for that very reason some mortgage experts believe it will
also take longer for offers to be produced.

This new EU mortgage
directive which introduces changes to the way that interest rates and
APRs are displayed will also make mortgage offers binding. Some experts
believe the changes will simply make the details of a mortgage more
confusing for the borrower and, consequently, make the process of
selecting the best mortgage harder than it has been.

Whilst the
initiative is intended to give borrowers certainty that their mortgage
offer will be binding, it will also add time to the whole application
process and cause delays in issuing home loan offers. It is hoped that
the directive will prevent mortgage offers from being withdrawn because
of a lack of information supplied by the borrower but, of course, this
means the lender will have to seek all relevant information from the
borrower before issuing the offer and that will naturally result in
extending the time taken to get the offer issued.

And it is not just the banks and building societies that will have to
ensure they have all necessary information prior to the offer being
made, mortgage brokers will also be affected and will be required to
gather more information than previously.

In theory, this
directive seems to be a good idea that will give borrowers surety that
once they receive their mortgage offer it is binding and cannot be
withdrawn.However, the practicalities of ensuring a mortgage offer is
binding means that lenders must be completely certain that they have
requested every piece of data that they need to make an informed
decision. Borrowers and brokers may have to become more involved in the
application process in order to provide all the information that a
lender will need.

Lenders already request more information than
ever due to the impact of the financial crisis as they aim to ensure
they make responsible lending decisions with the minimum of risk to
themselves. The EU directive simply adds to this burden but hopefully
the EU directive change will not adversely affect the time that it takes
to produce a mortgage offer. However, the reality is that many banks
and building societies are already swamped with increasing numbers of
large mortgage applications from individuals as well as buy to let
mortgage applications from investors so we have to anticipate some
additional delays.

Providing Mortgage loan is known to be an old policy of lending of
loan across all sectors. However, it is essential that Mortgage
Compliance is always considered for this purpose. Different financial
sectors deal with loans. The procedure of processing this loan is easy,
by which it can be easily availed. But, you should definitely keep in
mind that many loan applications need to be processed and there are many
administrative works as well that are associated with it. compliance
has become a mandatory requirement these days when taking such loans.

How does the mortgage document get processed?

There are various outsourcing companies that provide with such
services, by which it is clear that efficient services are provided by
them. It leads to great customer satisfaction as well. The service
patterns are in fact improved by following a lot of ways. By this
efficiency in processing of documents is ensured. Documents needs to be
maintained in the right way so that it can be analysed in a fine way. In
fact the outsourcing companies are getting strict with the
documentation aspect.

Different kinds of mortgage loans

Mortgage loan can be divided into different types. The idea behind this
loan is that you get money in exchange of a particular thing as a loan.
Such things could be gold or such other valuable assets. But, it is
essential that Mortgage Compliance should be in place. For the purpose
of avoiding any kind of legal problems, the debtor will have to sign
various legal papers before discharging of the loan.

What is a mortgage document? few tips

Mortgage documents are basically legal documents. However, it is
sincerely advised that every legal document of needs to be gone through
in detail before you sign the same. If at all money is not returned
within a certain period of time, the company can sell the products that
are on Mortgage. Before getting the loan, the customer should make sure
to read the documents and deal with the customer care. By getting in
touch with customer service executive, you can easily solve all kinds of
related problems.

This is in fact known to be one of the
easiest modes of availing loan. The legal process is less and loan can
be got within a short period of time. For setting up of any kind of
business, you can definitely make use of such a loan.