Mortgage Broker Pros and Cons

There is always the question of whether to go with a mortgage broker, or directly through the bank, when you are applying for a mortgage. There are of course pros and cons for both, but ultimately it is the individual’s decision. Read on to find out more about your options.

Mortgage Brokers

Starting with the basics, mortgage brokers are there to guide you through your mortgage application, acting as a middle man between yourself and the bank you are/want to lend from. They will help to put together your application, get your documents in order and so on. Banks do this too, however mortgage brokers are not bound to one bank. They can shop around to find the best deal for you and your situation. Especially if you are someone with adverse credit, or who has been turned away by mainstream banks – a broker can help to find a lender who will accept your circumstances.

Pros of Mortgage Brokers:

Individual Voluntary Arrangement (IVA) - Mortgages

Individual Voluntary Arrangement (IVA)
What is an IVA?
An individual voluntary arrangement is a legally binding, formal agreement between yourself and your lender to pay off your debts over a period of time. As it is legally binding, it is approved by the court and you must stick to it, and so must your creditors. 

An IVA must be set up by an insolvency practitioner, for example a lawyer or an accountant, who needs to be fully qualified. Said person will charge for the set up of the IVA; fees that can be high, corresponding with the amount you are paying back through the IVA – bear this is mind. The insolvency practitioner will be the person who deals with your creditor, throughout the term of the IVA. 

Debt Management companies:
If you decide to go through a debt management company, the fees will most likely be higher so make sure you are well aware and have looked around for the best route for you before you go ahead with anything. 

Contractor and CIS - Mortgages

And the Construction Industry Scheme (CIS)
A contractor is somebody who provides services/goods to a specific client, under specific terms. As a contractor, you can either be classed as:
self-employed – if you work as a sole trader/have your own ltd company 
an employee/worker – if you work through an agency or a large ‘Umbrella Company’, who pays your wages/taxes. 

How to prepare for getting a mortgage as a contractor
Here are some helpful tips that can aid you when apply for a mortgage. Having a riskier employment status and lacking a secure income can sometimes be unattractive to lenders. However, if you take some of the following advice, your chances with even the strictest lenders may increase. 
•    Aim to get a good deposit together (at least 10%) – this is a tip for anybody looking for a mortgage, though perhaps weighs heavier upon contractors who are applying. If you can produce a solid deposit, lenders will be pleased. Plus, the higher your deposit, the less your mortgage will be.

AS A MORTGAGE IS SECURED AGAINST YOUR HOME OR PROPERTY, IT COULD BE REPOSSESSED IF YOU DO NOT KEEP UP THE MORTGAGE REPAYMENTS.  THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. View Finance Ltd is an Appointed Representative of Finance Advice Group Ltd, which is authorised and regulated by the Financial Conduct Authority under number 624517 in respect of mortgage, insurance and consumer credit mediation activities only. The Financial Conduct Authority does not regulate some form of mortgages and loans, including most types of Buy to let mortgages and also Limited Company lending. The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK. Registered office address: 42 Friar Gate, Derby, DE1 1DA. Registered in England and Wales, company number 11265177.

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