Mortgages – get an expert on your side

There are many routes to finding a mortgage. But which one is the best and why? When I took my first mortgage it seemed like a minefield, and there is every temptation to cling on to the first reasonable mortgage adviser we find, whether that be at the first building society we walk into, or our own bank. But hold fire! You could be making an expensive mistake. I will explain why.

The fees and rate
If you simply walk into your local high street building society, you might be lucky and stumble across the best deal, but more often than not, there will be better deals out there. Your local society will have a range of fixed and variable rate deals, and yes, they will give the best advice according to their own range, but you could end up paying a higher rate, or fees that other lenders simply don’t charge.

The lending policy
Every lender is very different in how they lend. Their lending policies have evolved over the years, and all have their quirks. One main difference is the calculation for the amount they will lend you. Most lenders base the loan amount on ‘affordability’ rather than a simple multiple of income, the older method. The affordability calculation is normally done online. It takes into account many factors such as the term of the loan, how many children and other dependents you have, and several other factors. It is surprising how different they all are. Some lenders restrict the loan amount if you are paying it over a shorter term, others don’t. Some take into account bonuses, overtime and other payments, others don’t. If you have income from Tax Credits some will take that into account, some will only take a proportion. Having experience of all these quirks means that we normally know which lender is likely to suit your situation.

Moving goalposts
Quite often, especially now, lenders will agree a case, then when the case is being processed, they will come across something which makes them turn the mortgage down. Sometimes this can be weeks after you have applied. If you have applied direct to your lender, this can be difficult to handle. You probably won’t have knowledge of their lending criteria. You could find yourself high and dry. If you have an independent adviser acting for you, they can often get past these obstacles by speaking to the lender on your behalf, and perhaps making adjustments.

In Summary
A good independent adviser, one who specialises in mortgages, will know the lending criteria of all the lenders out there. If your case is simple they will search for the best rate for your situation. If your case is more complex, for example if you have a buy to let in the background, they will know exactly which lenders to recommend.

At Talk Money we offer a free initial consultation. So if you would like advice on any financial issue please call me, Claire Cook, on 01273 224667. I would be very happy to help.