Brokers - what are your clients confused about?

Education is a key part of the role of a mortgage broker. Purchasing a property and applying for a mortgage has many twists and turns, and approaching this yourself, especially as a first time buyer, is a real live minefield! Understanding the process, the correct timing of each stage, is vital to ensure things progress quickly and smoothly. In the current climate we are seeing estate agents delving deeper in the clients circumstances, with one agent recently even requesting the clients payslips as they felt it unlikely he could obtain the mortgage he requires given his young age! Having your ducks in a row aligned, even before you start browsing properties online, puts you in the best position to view properties and make offers, and this is regardless of whether your a first time buyer, mover or investor. Many clients we speak with are surprised at the length of time the process takes, both from a mortgage and legal perspective. With the potential bumps in the road and stress purchasing a house brings, seeking the right advice and guidance on one of the biggest, if not the biggest purchase of your life, as early as possible is imperative!

This is an area that needs visiting whilst children are in education. What a way to show them how to plan for when that time comes, look at all the options that are available and how to prepare for it. Whether it is the rental options, mortgages, living with parents, how to manage their credit and other financial choices has got to be more important than some of the nonsense on the current curriculum. I walk my first time buyers through the whole journey and do not use acronyms, abbreviations or other bullshit jargon that the industry uses. We cover off mortgages, estate agents and conditional selling, conveyancing, all insurance types, surveys and what they are good for. As well as utilities and removal fees. I always remind my clients that there are no stupid questions as you don't know what you don't know. This process is daunting enough for anyone let alone first time buyers and I try to make it a smooth as my head for them.

It's no surprise that many first-time buyers are completely in the dark about the mortgage process because it is complicated. Buying a property with the help of a mortgage is not something that first-time buyers do every day, so they are not used to the various protocols that mortgage advisers and solicitors follow. It is definitely a case of educate & help! I see myself as a professional mortgage adviser and guide to help clients navigate through the sometimes stormy seas of buying a property. Estate agents are also quite often helpful to buyers that need a little guidance along the way.

We find many first-time buyers are confused about the house buying and mortgage process. It's entirely understandable with so many moving parts, both financial and legal. As financial professionals, it's our job to help clients understand how it all works. And with self-employed clients, there's the added complexity of income assessment. For example, whether net profit can be used, how many years' accounts are required and whether the lender will consider just the latest year's trading history.

This is one of the many things that goes in the draw labelled "things that a good mortgage broker does for their clients, that no one realises"; I send a good portion of my first meeting with first-time buyer going through all their questions, not just around the mortgage, but the entire house buying process; how best to look for a house, how to make an offer, what's an approval in principle, how do a choose a solicitor, etc, etc Helping to give clients the confidence and support to make some massive financial decisions is all in a day's work for your friendly neighborhood mortgage broker. One other thing to remember is that this doesn't just apply to first-time buyers, with people only moving house every decade or so, even someone with a few moves under their belt often finds the whole landscape has changed since they last went through the process. So, it's really important to me that I ensure any potential clients know they can ask me anything, there's no such thing as a silly question in our meeting. Be it a first-time buyer, home mover, landlord, or self-builder I always make sure they know I'm only at the end of the phone through the whole process, meaning if anything does come up they don't understand they're completely comfortable to get in touch with me to check they're understanding. All of this is part of the service, being a mortgage broker is so much more than just finding people a great interest rate.

A large majority of first time buyers we speak to need our guidance on various aspects of the house buying process and that is understandable considering there is no previous experience. Most of the time a lack of knowledge is not a problem as we can simply guide the buyer through what they need to know, such as getting a mortgage in principle or instructing a solicitor but there are some occasions where it can be a problem. The most common problem is when someone has all their financial and identification documents registered to a different address to the one they live in, usually a parents address. This can result in a lower credit score as the lender will be using their current address to credit check them. If they haven't lived at the address where the documentation is registered for over 3 years then it is even more of a problem so my advice would be to get everything registered to your current address as soon as possible and then speak to a fee free broker for guidance on everything else.

It really doesn't surprise us that there is such a big knowledge gap for potential house buyers. Our education system completely overlooks all aspects of finance and doesn't prepare future generations for real-life events. Us brokers really have to take a hand-holding approach with first-time buyers as many fear the unknown and don't want to get caught out along the way. So many areas take clients by surprise such as the process, additional costs, timescales, and handling obstacles along the way. Which if these aren't accounted for early in the process can lead to additional stress, delays, and potentially a greater cost to the customer.

This is a story very close to my heart and the exact reason I became a mortgage broker. I has been saving my whole life for a mortgage and at the age of 19 as my deposit size was getting reasonable I started asking around to my fellow colleagues (I was working in catering at the time) what a mortgage was and how I would get one and how much it would cost. No-one seemed to have any idea, I was asking people of all ages, my parents, others with mortgages and was getting nowhere. I googled it to very little avail and felt so lost and at 19 a broker fee seemed something I couldn’t afford especially as I didn’t even know if I could get a mortgage and all I wanted was some information. I decided I wanted to get into this taboo world of mortgages so that I could be that person people could come to with their questions and hopefully I could help them out. As a broker now I understand that you have to know where to look on lenders websites to get information but its still very much unobtainable to your average joe even if you can find the information in the first place due to the jargon and piece meal way it's presented. What I find clients are most in the dark about is the process as a whole, what does the mortgage do, who instructs the solicitors, why do they need solicitors, who arranges and pays for the valuation, what part does the estate agent and the broker play. It's like knowing you need to get from Scotland to London using public transport but you don’t have a map and do not know where the bus stops are. I think brokers can really help by creating a simple guide to say here this is the process e.g go to a broker, see how much you can borrow, go to the estate agents make an offer, chose a solicitor you want to work with. Then show the client the detailed steps of each process e.g. offer in principle, application to the lender, valuation, offer issued, solicitors work begins, they will do searches, raise enquiries etc. It’s a very quick and easy job for a broker to do this, mine took around 10 minutes to create but it's such a valuable tool to have and for clients to refer back to through the process.