Skip to main content

Arranging a mortgage: Is a financial advisor or mortgage advisor better?

The question of whether to ask an independent financial advisor or mortgage advisor for help when arranging a mortgage does not have a clear-cut answer. Either might be suitable, depending on their circumstances and yours.

If you are looking to take out a mortgage, you could seek advice from either a mortgage advisor or an independent financial advisor. Either might be appropriate in different circumstances. The most important thing is to check what their affiliations are, and whether this might affect the advice they give you.

Independent financial advisors and mortgage advisors
One first and obvious difference between independent financial advisors and mortgage advisors is that IFAs are more general in their approach and will offer advice on a wide range of financial topics – tax, pensions, insurance, investments, mortgages, inheritance and other areas. Mortgage advisors will only be able to provide information about mortgages.

This difference may inform who you approach first. If you need just a mortgage, then you may only want to speak to a mortgage advisor. If the help you need is more far-reaching and encompasses other areas of you finances, then an independent financial advisor will be able to serve you better. It is best to decide this in advance, because you may get better deals if you are looking for several products at once than just one of your own.

Is Tied or Independent?
Additionally, as the name suggests, independent financial advisors have to be independent. This means they will offer you advice from across the market. They are not ‘tied’ to one or other financial institution, such as a bank or mortgage provider. That means the range of advice they can give you is much broader, and more likely to suit your needs.

A mortgage provider may or may not be tied. If they work independently, or for an estate agent or mortgage broker, they might offer advice from the whole of the market. But if they work for a bank, for example, they would sell only that bank’s mortgages. Unlike the independent financial advisors, they are usually paid solely by commission: when they sell a mortgage, they are paid by the company involved. This might seem good for you, because you’re not paying a fee up-front. Of course, there’s no such thing as a free lunch, and you may end up paying for it over the long term, with slightly worse rates over the course of the mortgage. Alternatively, it may not be the best product for you, because the advisor is only looking at one provider.

Independent financial advisors have to offer the option to pay by a flat fee. This may hurt more in the short term, because it could be several hundred pounds. However, you know that you are getting impartial advice, and that you should recoup that investment in the long run.

When a mortgage advisor might be better than an independent financial advisor
If you have a good idea of the mortgage you want, or the bank you want to go with, then it may make sense to bypass the independent financial advisor and go straight to the institution in question. This makes some sense if you do not have any other needs that an IFA could help with. Make sure you do your research and make the relevant comparisons, to check that you really are getting the best deal.

In the end, though, a tied advisor is only going to give you information about products from a small section of the market. Since they are also paid by commission, it is also hard to regard their advice as impartial since there is an element of self-interest in the decision. If you are in any doubt, a good independent financial advisor should be able to provide the advice you need without these concerns coming into it.

Comments

Popular posts from this blog

Low interest credit cards - how to make them work for you

Credit cards are borrowing instruments, unlike debit cards where you already have the money. Banks are there to make money too. Just like high street stores, they hope to maximise their profits within the rules. So it’s important to understand the basics and find a credit card that’s right for you – you can compare low APR credit cards here . Now you know the rules, let’s find out how to play the game. The financial services industry charges interest on the money that it lends out. Let us assume you borrow £100 on your credit card and keep it for exactly one year before you pay it back. For the purposes of this article, we will assume your loan attracts 8% interest per year, which is the Annual Percentage Rate, or APR for that particular transaction. Practical example

Why it’s important to save for retirement

While retirement may seem far off in the distance for some, financial experts say you’re never too young to begin saving.  In fact, the earlier you calculate your retirement needs and start building your nest egg, the easier it will be to create a viable plan for the future. Many experts advise you begin saving a percentage of your income for retirement as soon as possible, no matter how little the contribution may be, as it’s possible the Social Security benefits millions of people currently depend on may be in jeopardy.

How does a Prepaid Credit Card work?

Can They Really Be a Solution to Avoiding Credit Card Debt? When it comes to plastic, there are a lot of choices out there. Not only do you have the choice of credit card , debit card, or prepaid credit card, but you also get to decide which financial company you want to use as your card provider. Credit cards and debit cards are both risky. Credit cards can help put you deeper into debt, while debit cards give thieves and collectors access to your entire bank account. A growing number of people are finding that prepaid credit cards are becoming the best option. What Are Prepaid Credit Cards? Prepaid credit cards look and act just like a credit or debit card, except you put the money on the card before you make any purchases. You are only allowed to spend as much money as you have pre-loaded on the card, which means that you are not at risk of going into credit card debt from overspending. These cards also keep your money safe, because thieves will be limited to the amount that is on t

What are the Consequences of Overspending in Life?

How overspending can ruin your financial life? With today’s expenses and their prices, it can be very hard not to overspend. Still, that isn’t an excuse to stray out of your budget. You know why? It is because overspending can only lead to more problems than you think. Overspending can affect your whole life. With all the possible consequences, it may jump from one problem to another. Unpaid bills All the excessive shopping with your credit card can cause steep bills at the end of the month. If you keep on using your credit but don’t have enough money to pay for it in the end, then you’re surely in for a huge financial disaster. This will turn out to be missed payments, and missed payments will ruin your credit report. Missing out on payments will get your credit report marked for 7 years or more. And you can’t get rid of them by finishing them off. Credit report Overspending can cause a chain reaction of events. Once you get your bills due to overspending, it’s possible for you to mi

How to Make Your Title Loans Safe and Sound

Although title loans are tagged as risky, innumerable folks still use them for fulfilling their different financial obligations. Therefore, such loans are not completely bad because their significant use despite the risk factor says a lot of their pros. This makes it vital to discuss how these loans should be used so that the risk factor can be minimized up to a great extent. For those who are not aware of, the risk of title loans crop up in the form of consequences when you fail to pay back the loan. With such a failure, you are surely going to lose your car as well as decrease your credit score further.

Money Moves: Imagine Playing Your Financial Life like a Chess Game

To say chess is a popular game would be a gross understatement. Chess, for at least 1500 years, has been considered to be not just a game, but a true test of intellect and character. One can learn a great many things about chess that can be applied to one’s life, not the least of which is one’s personal finance. Chess is a game that requires patience, foresight, and an ability to understand your opponent. Much like your personal finance, these qualities are required for you to come out on top in the end. Here are a few things you can take away from playing chess and use to improve your financial life:

The Financial Implications of Wills and Probate

Despite the stress and sadness that surrounds the passing of a person, death is synonymous with money. If the deceased has left behind anything of value, the family of that person is forced to deal with the access and distribution of such assets. This may entail the payment of inheritance tax, analysis of the will, and the application for probate. Probate is basically the process involved in establishing who can distribute the assets tied up in a will. In most cases, the deceased should have named an executor in their will – this is the person responsible for obtaining probate and dealing with any other financial implications of the death. The amount payable in inheritance tax is declared by the government or state, and the desired distribution of any monies and other assets should be clearly laid out in the will. However, the cost of obtaining probate is a further financial implication of death and one that can vary wildly should it not be carefully monitored. Whilst probate is