Maxwell Moore Limited - Interview

Interview

On search for the mortgage market

16/08/2017

A mortgage broker is a specialist advisor whose job is to search the mortgage market and find you the best deal.When a mortgage broker makes a product recommendation to a client, he or she gives financial advice. This means that mortgage brokers must have qualifications in order to operate within their field - and that they have a duty of care to their clients to give the best advice possible.

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Cylex: How can a mortgage adviser be helpful? What mortgage cases apply?

Maxwell Moore Limited: The mortgage market has become much more regulated since the financial crash and virtually all residential borrowers must now receive advice, although this can be received directly from the lender.  A mortgage advisor in a specialist firm is ideally placed to carry out this advice process as they will be able to quickly proceed with the most appropriate lender, using their expert knowledge to help their client to make the right judgements, and they will not have to recommend the products of just one firm, as would generally happen if the lender gives you the advice. Mortgage Advisors can be especially helpful for clients who have more complex income scenarios, perhaps some credit blips or need to consider lending into retirement.  These are just a few examples of where we excel at knowing which lenders are likely to consider an application. In the event that an application is unsuccessful, a mortgage advisor has already undertaken the advice process with the client and will have prepared all of the documentation, so this doesn't have to be repeated in order to approach another lender.  Maxwell Moore has access to deals from a comprehensive range of lenders and can help clients with just about any scenario, for example first time buyers, buy to let investors and those already retired, including those who might be purchasing under Right to Buy rules.

 

Cylex: What benefits and advantages does the partnership with Maxwell Moore Limited bring?

Maxwell Moore Limited: Clients who sign up with Maxwell Moore get more than just a process driven mortgage recommendation.  We provide a service tailored to each individual client, learning about their circumstances and requirements.  We are on hand to help guide them through the whole property buying process, for example, ensuring they have considered associated costs such as stamp duty and legal fees, explaining the buying process and for buy to let, the taxation considerations.  We have our own portfolio of buy to let properties and are very familiar with the house buying process and what it is like to be a landlord.  Prior to launching Maxwell Moore, Jonathan spent almost a quarter of a century working in mortgage lending, so understands what lenders are looking for when they assess an application.  This means we can submit strong applications on behalf of our clients.

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Cylex: From what you see, how many people take it seriously in making insurance arrangements? Is this quite a good rate for UK?

Maxwell Moore Limited: The population as a whole has a significant protection gap; there are lots of people who have too little or no protection insurance at all.  This unfortunately means the property they have worked hard to make into their home could be at risk if they lose their income, die or are no longer able to work.  Depending on age, life insurance can start from just a few pounds a month.  Premiums are determined by a number of factors including age, amount of cover and health. Many people do take out life insurance thinking this protects them.  However, they are statistically far more likely to contract a critical illness such as cancer or have a heart attack, or maybe fracture a bone and have to be off work for a period of time.  Some employers are generous in their sick pay offering, but many aren't.  We encourage clients to think about how they would make their mortgage payments if they had a reduced, or no income.  Thankfully, many understand this risk and choose to take out an income protection policy which will pay them an income if they are unable to work. There are a variety of options available for all the different types of protection insurance and we work with our clients to understand what budget they are comfortable with.  We will then recommend a package for them that helps to protect their home, and fits within their budget.

Cylex: Please tell us what are the top three policies people close with Maxwell Moore Limited? Why is that?

Maxwell Moore Limited: Whilst not a policy, mortgages are by far the most common product that we help our clients with.  Insurance wise, we have a fairly even spread of life insurance (with or without critical illness cover) and income protection.  Life insurance and critical illness cover are usually combined in a single policy and the policy pays out on the first event.  We can arrange a Defaqto five star rated buildings and contents policy for residential owners and landlords.  Whilst clients often feel they can obtain cover more cheaply through popular comparison sites, it is worth noting that the cover provided on some of the cheaper policies is not always that comprehensive; not all insurance is the same.

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Cylex: How are interest rates determined?

Maxwell Moore Limited: There are three main interest rates used in the UK, Bank of England Base Rate (BBR), London Interbank Offered Rates (LIBOR) and something called Standard Variable Rate (SVR).  BBR is set by the Bank of England Monetary Policy Committee which meets eight times a year.  LIBOR is the average rate at which financial institutions would lend money to each other and it changes daily, although lenders will often only implement changes monthly.  Every lender sets its own SVR and it is usually higher than BBR.  Mortgage products are generally based on one of these three main rates.  You can read more about the different type of rates by visiting our terminology guide at https://maxwellmoore.co.uk/mortgages.php.

Cylex: What kind of insurance is required to take out with a mortgage?

Maxwell Moore Limited: The only compulsory requirement that a lender will have is for buildings insurance to be in place.  This must be for at least the rebuild cost specified by the valuer.  It is wise for homeowners to also take out contents insurance and the two are generally sold together as a single policy.  For flats/apartments there is usually a block buildings insurance policy held by the management company on behalf of leaseholders, so the borrower would then only need to take out their own contents insurance. Whilst not a requirement of the mortgage lender, we always talk to our clients about protection products such as life insurance, critical illness cover and income protection. Our role is to ensure that our clients home is protected in the event they lose their income temporarily or permanently, or if they die and leave loved ones behind. Protection is often undervalued until it is needed, but if the worst happens, it can transform an otherwise dreadful situation.

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Most mortgage brokers have relationships with several local, regional and even national lenders, and they can tap those connections to get some loan fees waived for you. A mortgage broker will give you accessibility and one-on-one attention you likely won’t find when working directly with a loan officer at a large bank.