The search for a mortgage is, for most people, among the most financially consequential things they will ever do. The difference between the right mortgage and the wrong one — the rate that is a quarter of a percent lower, the arrangement fee that is absent rather than £999, the term that is twenty-five years rather than thirty, the lender who will accept the income declaration of the person who has been self-employed for two years rather than the one who will not — compounds, across the life of the debt, into figures that are not trivial. And yet the person who is about to take on this obligation arrives at the decision-making process with, in most cases, no particular education in the landscape they are navigating. They have been told by a parent or a colleague to “just go to a broker”, but they do not know what makes one broker better than another, whether a broker found on a comparison website is genuinely independent, what it means for an adviser to be whole-of-market, or why that distinction matters as much as it does when the thing being decided will sit on the household finances for the next two or five or twenty-five years.
What makes the independent, whole-of-market mortgage broker worth finding is not simply that they have access to more products than the person going directly to a bank — though the difference, in a market with several thousand products from dozens of lenders including building societies, specialist lenders, and institutions that do not accept direct applications at all, is significant. It is that they have the accumulated knowledge of which lenders will look at a specific situation favourably, and why, and how to present an application in a way that is accurate and that also meets the specific underwriting criteria of the lender who is most likely to approve it. This knowledge is not available from a comparison website, which compares products but does not advise on which product is appropriate for a specific person in specific circumstances. It is also not available from the tied or multi-tied adviser who may have access to a reasonable panel of lenders but who is not searching the whole market and who may not know about the product from the specialist lender or the mutual building society that would be the best solution for this particular person’s particular situation.
On the Specific Problem of the Self-Employed Mortgage
The growth of self-employment in the United Kingdom — there are, at any given time, somewhere in the region of four and a half million self-employed people in the country — has not been matched by a corresponding willingness on the part of mainstream lenders to accommodate the income patterns that self-employment produces. The person who left a salaried position three years ago, who has built a limited company whose accounts show a pattern of retained profit and director’s salary that is entirely rational as a business and tax structure, and whose net income is comfortably sufficient to service the mortgage they are seeking, will find that the automated underwriting systems of many high street lenders cannot process their situation without generating a decline. The lenders who can and will consider this application — who will look at two years of accounts, who will consider SA302 tax returns and tax year overviews, who understand the difference between a contractor on a consistent day rate and someone whose income is genuinely volatile — exist, but finding them without an adviser who knows the landscape requires a process of trial and expensive error. Each declined application leaves a footprint on a credit file. Each footprint narrows the options for what comes next.
The remortgage moment is a different kind of anxiety from the original purchase, but it is not a smaller one. The person who fixed their mortgage at a historically low rate two or five years ago and who is now looking at renewal in a higher-rate environment is facing a material increase in their monthly outgoings and a set of decisions — whether to fix again and for how long, whether to take a tracker product that bets on rates falling, whether to switch lender or stay with the existing one, whether the cost of exit fees and arrangement fees makes a better headline rate genuinely better in total — that require, if they are to be made well, the kind of market knowledge that takes years to accumulate. The independent mortgage broker who advises at this moment is doing something that has real and quantifiable value and that is genuinely difficult to replicate through automated means. The person who finds them online and books a conversation has made a decision that is likely to save them money that runs into the thousands over the next several years. The person who cannot find them goes, in most cases, directly back to their existing lender and accepts whatever rate is offered at renewal, because the alternative — navigating the market alone — is too bewildering to attempt.
The most expensive mortgage is the one taken without advice, from the first lender who will say yes, by the person who did not know a better option existed.
At GitFoundry, we build websites for FCA-authorised mortgage brokers that make your whole-of-market status and FCA registration number clear from the first page and explain, in plain English, what those things mean for the person who does not yet understand the difference between tied and independent advice, that describe the specific client situations you have most experience with — the self-employed applicant, the first-time buyer, the remortgage, the buy-to-let investor, the borrower with adverse credit history, the later life lending situation — in the language of the person searching rather than the language of the mortgage industry, that give the person whose situation is complicated some confidence that you have successfully navigated similar complications before, and that provide a clear and simple way to begin a conversation without requiring the person to understand anything they do not yet understand. One payment, no monthly fee, yours outright.