How to Get the Best Mortgage Quote
Online Mortgage Comparison Service Vs. Mortgage Broker
Apr 16, 2009
An affordable mortgage quote and lower monthly repayments are the principle objectives of all homeowners approaching the end of their loan agreement. However, additional fees tend to complicate the figures provided by a mortgage broker as the savings realised require further investigation.
In order to avoid paying inflated mortgage fees, many homeowners prefer to source their own mortgage quotes by visiting local banks on the high street. Other homeowners are prepared to pay a commission in order to benefit from the help and assistance of a seasoned financial professional.
Online Mortgage Comparison Services
High street banks represent a tiny fraction of the total lending community, yet very few homeowners explore all of the opportunities out there. It is important for homeowners to trawl the entire market if they wish to reduce monthly repayments. An online mortgage comparison site, such as fool.co.uk, can help a homeowner secure the cheapest mortgage quote.
Does a Mortgage Broker Help to Reduce Monthly Repayments?
A mortgage broker is a financial professional who trawls the entire market for the cheapest mortgage quote. They have access to the latest deals and useful industry contacts that can help homeowners reduce monthly repayments.
The services of an adviser aren't free; they generally charge a mortgage fee of up to 1 per cent of the loans value. This isn't an up-front payment and can be added to the overall loan. It is still necessary to factor-in the cost of a broker when determining whether the mortgage quote genuinely saves the homeowner money.
Working Example of how a Mortgage Broker can Save Homeowners Money
Mr and Mrs Stephens have an £150,000 standard variable rate (SVR) loan at 7.2% APR. They are currently paying £1198.32 pcm. They consult a mortgage broker who states that he is able to get them a fixed-rate deal at 5.5% APR over 2 years at £1045.99 pcm.
Whilst monthly repayments have been reduced by £152.33 pcm, this doesn't represent the true saving. The use of an adviser has created an additional mortgage fee of 1 per cent of the loans value; this is equivalent to £1,500. This means that the net saving in monthly repayments is actually £89.83 pcm.
Which Service Achieves the Most Competitive Mortgage Quote?
Although there isn't the same help and support, a mortgage comparison service fulfills a similar function to the professional adviser. Whilst a first-time buyer will benefit from the wise counsel of a mortgage broker, homeowners that are seeking a home loan are likely to have the necessary experience to determine how any fees affect monthly repayments.
It is advisable to consult a mortgage broker or obtain up-to-date borrowing figures from an online mortgage comparison site. Calculate the savings and deduct any fees in order to determine the real savings that will be made from the new loan agreement. Getting the very best mortgage quote can be the difference between balancing household bills and crippling money problems.
Homeowners seeking to minimise mortgage repayments may wish to read about tracker mortgages, fixed-rate mortgages and discount rate mortgages.
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