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Mortgage basics
Getting started
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
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
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.
Specialist lenders
These lenders provide mortgages for borrowers who, for whatever reason, can’t
get a conventional mortgage. Self-certification,
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.
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 independent while others are
tied to certain lenders, which can be good if you have specific requirements,
but they should clarify this.
Others
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.
Source: Mortgage Advisor & Home Buyer magazine
