Our guide to mortgages covers every stage of the process to ensure you come out with the product that’s right for you. If you’ve never had a mortgage before – or it’s been some time – you might want to brush up on the basics. Understanding the options will help you make an informed choice when it comes to picking a product.
CHOOSING YOUR LENDER
The following kinds of financial institutions all offer mortgages. You should base your final choice not only on the competitiveness of the lender’s rates but also on its fees, penalties, customer service and reputation.
Building societies are mortgage experts. National societies have a branch on most high streets, while smaller lenders have few outlets and might offer preferential rates to local borrowers. Building society interest rates are very competitive – thanks, in part, to mutuality – and they can also offer specialist advice.
Banks are the most obvious competitors to building societies. The traditional high street banks have years of lending experience and greater national coverage. Also, their standard variable rates have tended to be higher in the past but greater competitiveness from both building societies and direct, internet-only banks has changed this for the better.
These lenders provide mortgages for borrowers who, for whatever reason, can’t get a conventional mortgage. Holiday homes, buy-to-let and adverse credit mortgages all fall into this category. Many mainstream lenders have established specialist arms under different names for this kind of borrowing. Specialist lenders might not be names you’ve heard of as most don’t deal directly with the public but operate through intermediaries.
A mortgage adviser or mortgage broker may offer deals not available directly from lenders and can do the work of searching for the best product for you. Some are whole of market or independent while others are tied to certain lenders, which can be good if you have specific requirements, but they should clarify this.
Mortgages are now available from a wider range of sources than ever and are even being offered by supermarkets and insurance companies. These companies may not offer the most competitive rates but good deals can be found.