A mortgage is probably the biggest financial commitment you will ever take on but where should you go for advice? How do you start looking and how can you be sure that you made the right choice when there are thousands of options available? Pete Coombes has some answers.
Your bank or building society?
Lots of people think that speaking to their bank or building society directly is the best or even, only option, not just for a mortgage but other loans too. I believe people do this out of loyalty. They believe that because their bank already knows them and their income and expenditure patterns, the bank will be more likely to lend to them. And better the devil you know, right? Wrong! Your bank (or building society) can only offer you one of their own products. Whilst this may well be the best borrowing option, you won’t know if it is if you haven’t checked out all the other mortgages on the market. And what if the bank won’t lend to you at all or won’t lend you the amount you want to borrow?
Your current mortgage lender?
A bit like above! Your existing lender knows you as a customer and knows how well you can deal with financial commitments. However, they will have a limited number of products that they can offer you as they will only be able to provide products from their own range.
Most people start searching for a mortgage online. Using the comparison shopping sites is a very good way of getting a flavour of what rates to expect but even though these sites throw up a variety of products, they don’t actually tell you if you are suited to any of the rates – they just make a guess based on the very limited criteria you give them. And do you really have time to check each one in depth? Also bear in mind that the mortgage market has really changed over the last 10-15 years. Gone are the times of self-cert mortgages and execution-only mortgages. And interest-only terms are very limited.
Estate agents’ “in-house” broker?
A lot of the time the estate agent will ask you to be “financially qualified” to give their vendor peace of mind that you are in a buying position and that you are good for your money. Many ask you to speak to their broker based within the estate agents. You do not have to speak with them! The estate agent wants you to use the in-house broker so that they can earn a referral commission. Plus, they want control over both the buyer and the seller. In-house estate agents are sometimes tied to certain lenders, so make sure you check before proceeding. It’s really important that the mortgage you choose is the most suitable option for you. Tied agents won’t be able to make that assessment based on the whole market. And they are likely to want a face-to-face meeting (sometimes two or three meetings), which is all very well, if you have the time.
Having said that, it’s worth bearing in mind that many, many mortgages are only available via mortgage brokers. Yes, that right, a lot of the UK lenders require business to be submitted via a qualified adviser. They do this as a sort of quality control filter. Lenders trust mortgage brokers to get all the administration in order before submitting an application. That means guiding the customer through the entire process, liaising with all parties and keeping things on track.
Here on the Residential Desk at Mortgages for Business, we regularly speak with clients who have been dealing with their bank, their current lender, have looked online, or even talked to other brokers who have been unable to help them. They come to us to see if we can help. And can we help? We can always help! We are very good at getting our customers the mortgages they need. And in the unfortunate event we discover that you can’t get a mortgage straight away, we will happily share our knowledge to help you get a mortgage in future. We love a challenge and take great satisfaction when we can help and make a difference to our client’s lives. Why not give us a call???
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