Once someone has made a decision to purchase a property, a number of things generally need to be implemented.
As such, people often seek the advice and support of a qualified mortgage adviser, initially to obtain a decision in principle, so that they know how much they can borrow, in order to begin house hunting.
Once they have found their dream property that falls within the amount agreed, they can place an offer and hope that it is accepted by the vendor. If it is, the buyer can push forward with a mortgage application.
However, with the increased regulation implied by the Financial Conduct Authority, most mortgage providers now prefer customers to take the fully advised route. This is beneficial to both parties, as the lender can be satisfied that they have fully assessed their customers’ needs and requirements, and that they have correctly recommend the most appropriate mortgage solution, while the customer feels reassured that they are getting the best deal.
As part of the advised process, there are a few matters that advisers must cover:
Things to tell your client
During the initial meeting, the adviser must inform their customer about any charges that may be levied, as well as information about the range of mortgages that they can advise you on. If the client has applied on the telephone or online, this information must be provided in writing through the post before any mortgage agreement can be signed.
How much will it cost?
It is important to be upfront and honest, ensuring that your customer knows how the charging structure will be applied. The tariffs may vary considerably between advisers, but generally mortgage specialists in paid employment with a high street lender are salaried, so do not pass a charge for their service. However, there may be associated mortgage fees, such as a booking charge for a specific fixed rate.
Other fees may be applicable with mortgage brokers or financial advisers that are not normally tied to one specific lender, including an hourly rate and a commission from the lender the mortgage is referred to.
Some lenders allow the arrangement fee to be added to the mortgage. If this is the case, you must make sure that you advise the customer that interest will be accrued on this amount for the duration of the mortgage, in the same way as the main loan itself.
What if advice is not required?
Following the Mortgage https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpget Review, most lenders will be looking to provide the agreement on an advised basis, to ensure that their customer is aware of exactly how their mortgage will work. This will also ensure that their needs are correctly assessed and identified, with the most suitable recommendation being made at the end.
In certain circumstances, a lender may accept an application where the client feels that they have conducted sufficient research to make their own informed choice, and do not want further advice from a mortgage adviser. It is typical in this situation for the customer to be steered towards placing an application online or through the post.