For six letters, the word change masks a massive subject; Much too big to bore you with just hours before a sunny Easter weekend (Finance Planning takes no responsibility if my optimism in British weather condemns us to four days of rain). Accepting that not all changes are for the best (reality TV). Something happened yesterday in our long-established industry that grabbed my attention along with countless others.
A tale of two halves, with very different endings
Yesterday, someone somewhere would have walked into their bank and asked for a mortgage. Let’s call it a [popular high street bank], for example. If they were lucky enough to get an immediate appointment, they would have been seen by a Mortgage Adviser who would only have been able to discuss their mortgages. Don’t get me wrong, we love this lender and they have some great mortgage deals, but there are literally thousand’s of mortgages available, why limit yourself? Anyway, back to the story. He or she probably, left happy to have got it sorted, oblivious to how different the experience could have been…
Yesterday, Mr. A from Crawley spoke to one of our Mortgage and Protection Advisers. He didn’t have to wait and could have chosen to have a telephone call, home visit or an office meeting. During that conversation, our Adviser was able to discuss Mr. A’s requirements and match them with a mortgage from over 60 different lenders. No surprise, the earlier referenced lender was one of them, yet Mr. A didn’t end up with them.
You see, yesterday a new lender (the change I mentioned earlier) called Digital Mortgages launched a five-year fixed rate at 1.29%. Digital mortgages do not deal directly with the public, instead, they choose to offer their mortgages through a limited number of Mortgage Brokers of whom we are one. This is why, when it comes to taking out a new mortgage, you should always speak to a whole of market Mortgage Broker like Finance Planning. We have an extensive panel which includes lenders that many do not have access to.
Let’s finish up by looking at the difference between the two customers outcomes. We will call the first client Mr limited, he borrowed £240,000 and is paying £1031 per month.
Mr. A is who is actually, Mr ‘Very happy he has the very best deal on the market’, also borrowed £240,000 but is only paying £936 per month.
The fees are the same, so it’s easy to work out the difference. £1031 – £936 = a £95 per month saving multiplied by 60 months. The net benefit of speaking to our broker over going direct to a bank in this instance is £5700.
Do you think the first customer would of gone ahead if he knew? What if the lender said “by taking this mortgage you will be paying £5700 more than you need to over the first 5 years”? And this is why the Mortgage Broker is your friend.
Clearly, somebody is going to have a happier Easter than the other (in fact, the next five will be just as good), and everyone at Finance Planning wishes you the same.