By Ross Martin, Accountancy Director at Hive Business

Thinking about getting a mortgage? Almost every week we are advising clients on obtaining finance at a stage before the broker, and we’re finding that, as long as it’s early enough, even if it’s just a 10 minute chat, it usually saves them an awful lot of wasted time and energy.

Many of our clients don’t realise we are a resource they can use, so to clarify: if we are serving you in a financial advisory role, one of the many advantages is that we can provide this support because we know your circumstances.

Many people are fixated on the cheapest rate that Google spits out, however that does not factor in:

• The size of their deposit
• Whether they are self-employed or have a limited company
• Their tax strategy

In some circumstances, often the best course of action for a client is to stay with their existing lender (who may not need to review their circumstances) and this, of course, may not provide any work for a broker.

But the main problem is that lenders these days simply do not understand the varying complexity of people’s finances, and while many brokers do, unfortunately half of them don’t approach the issue from your perspective and give you what you actually need: a strategic overview of your options and potential blockers so you face the difficult questions first, not last. The other half will ask how much you earn, then dart off in the wrong direction, producing a useless whirlwind of paperwork.

I’ll leave you with an account from our very own strategic director Jonathan Fine, who’s broker led him on a nine week goose chase before asking the question he should have asked on day one. My question is why, oh why, didn’t Jonathan have a proper chat with me first?

Jonathan: “We started on the back foot because being the age I am [59], despite my reasonable level of wealth, I wasn’t able to instantly get a mortgage. It was going to have to be repaid by the time the oldest partner was 70, and my wife Janet was 63 – don’t tell her I said that.

“We had to get an old person’s mortgage – there are specialist companies that lend to old people – but the criteria seemed to be the same, other than that they’re very concerned about you dying. 

“We fulfilled all the criteria according to the broker, who wasn’t particularly helpful. He kept asking us for more and more information and hardly a few days would go by without him asking for something additional that wasn’t on the original application.

“The difficulty was that I am self employed and own my own companies. This necessitated them seeing the books of the companies I own with my wife and eventually they agreed that all the financial criteria were met.

“Stupidly we said we were probably going to rent our old house after we bought the new one, and at the last moment they asked us if we had permission from the bank to rent it out. We checked and the answer was no, even though there was only a tiny outstanding mortgage. 

“If they’d asked me at the start it would have saved everyone a lot of wasted energy. All the time the broker told me I wouldn’t have any difficulty whatsoever. It was nine weeks in total. Meanwhile, the people we were trying to buy the house off were getting more and more agitated, and you can’t blame them. 

“I don’t blame the mortgage provider if that’s their rules. The bit that really irritated me was that I wasn’t asked that question at the beginning. The kind of detail they went into was excruciating too: they wouldn’t accept Hive’s statement of my tax affairs and a photocopy of my tax return, they had to have the original from HMRC. Have you ever tried asking HMRC for anything? Be patient…”

Don’t let this be you, contact me at ross.martin@hivebusiness.co.uk or call 01872 300232 before talking to a broker.