Dwell delighted to welcome mortgage adviser Sadaf Malik to the team.
We get her views on the current mortgage market…
It’s always exciting when someone new buys into our vision to make mortgages simple, fast and convenient online. Today is one of those days as we welcome a new-joiner, Sadaf Malik into the Dwell team.
Born and bred in West Yorkshire, Sadaf is an experienced mortgage broker with six years of experience working within the financial industry. She started her mortgage career as an adviser at Countrywide and later went on to work for Coreco, based in London. She’s a pro at guiding customers through the mortgage application process and advising them on how to make ‘smart’ decisions.
Given her experience of the mortgage market, we thought it would be great to sit down with Sadaf and get her views on a few things. So here we go…
How do you differentiate yourself from other brokers?
I am extremely passionate in helping my clients. Having been a first time buyer years ago myself, I understand how daunting it can be to trust someone you don’t know to help you buy a property. I didn’t have a good experience myself with the broker I originally used and I always have it in the back of my mind — that’s not how I would want my clients to feel about me.
For me, it isn’t just about comparing products for you or giving advice, it’s about working with you to make sure you actually move into your dream home. I can safely say I believe in doing a good job first time around.
I’ve never had a case declined at the mortgage application stage and I want to keep it that way!
What are your main challenges as a broker?
I guess in my role there are many challenges, the main one for me is ensuring I place my clients with the correct lender. I always put myself in my client’s shoes. There is nothing more frustrating than you finding a property and then being told by a broker, “sorry I didn’t place the case correctly and now you cannot afford this property”. So yeah, I would say the main challenge is keeping on top of criteria and accuracy of a case.
The other thing is paperwork. To do a mortgage we have to collect and check so many documents before sending them on to the lender. For example, if a client has more than one bank account, I would need 3 months’ statements from each so I can check their expenditure and keep this on file. Before I know it I’ve got mountains of paperwork on my desk!
How will Dwell help you solve some of these challenges?
Dwell is well equipped in the fact that the system is a lot more intelligent. For example, I can input the client’s situation and it “smartly” gives me mortgage options that I can then advise on. That helps save time and provide a better service to clients.
There has obviously been a lot of chat surrounding Brexit — what have you observed since the vote?
There was some fallout in the aftermath to Brexit, mainly due to the huge amount of uncertainty in the market. I don’t think anyone really had any idea what would happen to property prices. So the initial reaction from buyers was to either renegotiate a lower price or pull out. Moving forward now, things have definitely settled and it seems confidence has been restored.
The Bank of England recently reduced interest rates — will that mean rates could fall for existing borrowers?
Quite possibly yes. So as we saw last week, for the first time in seven years the Bank of England lowered interest rates, halving it to 0.25% to help keep the economy in balance post-Brexit. That’s good news for the 1.5 million borrowers across the country on tracker rates who’s monthly mortgage payments will now fall providing they don’t have a “collar” or “floor” attached to their mortgage. Obviously those on fixed products within their initial term will not benefit from a rate fall.
Governor Mark Carney also stated how banks had “no excuse” not to pass on the lower rates to their mortgage customers. Encouraging this led to a quick reaction from the likes of Santander, Barclays, Coventry, Nationwide, Lloyds and Virgin Money who all announced plans to reduce rates on both their Standard Variable Rate and Tracker products.
After reducing the Base Rate, the Deputy Governor of the Bank of England confirmed another rate reduction was possible by the end of the year, possibly to 0.1%, so it’s possible rates and monthly payments could continue to go down for some.
So what does that mean for new borrowers?
For new borrowers — my worry is that the banks don’t make enough margin on lending as it is. Although rate cuts may allow existing borrowers the opportunity to save money on their mortgage payments, the banks may decide to leave rates unchanged for new borrowers to make up the fall in revenue. The cheapest product on the market for new borrowers is currently 0.99% which is incredibly low. Will rates go lower? I think we will have to wait and see.
A number of lenders have launched five and ten year fixed products — what makes these products viable options for customers?
It’s mainly the stability of not having to worry about interest rate rises or having to redo a mortgage application in a short period of time.
Last year, the Bank of England base rate suggested interest rates could increase gradually to 2.5%. On that basis many borrowers took advantage of all-time low rates on 5-year fixes (around 2.3%) so they weren’t exposed to a rate rise if they fixed for two years.
Ten year fixed products on the other hand vary from 3% to 3.5%. They’re great if you’re re-mortgaging at the end of your mortgage term and don’t want to worry about buying another mortgage again, or going onto the Standard Variable Rate. Where they’re not good is if you need to sell your home within ten years as early repayment charges can be severe. Ten years is a long time and people’s circumstances can change. Buyers need to be really sure they want to stay in their home for the long-term. If they’re not sure where they’ll be in five years, a ten year fixed is not the right product for them.
What tips would you give any first-time buyers looking to get a mortgage and get on the housing ladder?
Two things definitely. Most importantly speak to someone regarding your financial situation. You need to know how much you can afford, how much you need to budget on fees and be credit checked before you go out looking at properties. Second, I come across this a lot with first-time buyers who have a 5% deposit and money to cover fees but then decide they want to spend another year saving up to get a 10% deposit. Yes, you’ll save money on interest rates but you’re paying an extra year of rent and in all likelihood by the time you look again, prices could have increased. If you have a 5% deposit my advice would be, it’s better to take the hit on rates and then re-mortgage onto a better deal after your initial period has ended.
A lot of people are saying it’s a good time to re-mortgage, why is this?
Rates are at an all-time low. A few years ago a typical mortgage cost 5–6% especially if you only had 5% deposit. It’s now half of that. It makes sense if you were on a high rate before or are on a Standard Variable Rate to re-mortgage onto a cheaper rate, lowering your payment on a monthly basis and reducing the interest due.
Why did you decide to join Dwell?
The opportunity came at about at the right time for me. I met the founder Pradeep to talk about his new venture setting up Dwell. I loved the concept and I believe technology has taken over our day to day lives. People are so busy and just don’t have the time to meet a broker face-to-face or spend endless hours talking to a broker over the phone.
Dwell is something new, something different. There are so many ways this market can be disrupted and I wanted to help build the business and put our ideas into play. I think Dwell is what the future of broking will be; advanced; quick; and reliable. It’s all very exciting for me.
And finally, what do you like doing outside of work?
Has to be shopping! If you’ve seen Confessions of a Shopaholic that’s basically me without the debt. Apart from that I love dining in London’s hottest restaurants, travelling, socialising, and learning about new cultures.
