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Guide for Buyers and Sellers | 5
Where to find a
Other lenders
If you just go to your local high street for a mort-
mortgage
gage, you will miss out on other lenders who
may have the mortgage for you. For instance
Traditionally if you wanted a mortgage you some insurance companies offer mortgages -
just went to your local building society. But either through their own banking divisions or
mortgages are also available from banks, insur- through financial advisers.
ance companies, direct lenders and specialist Others do not offer their own mortgages but
mortgage providers. At the moment finding a sell the products of a selected panel of lenders
lender who will give you a mortgage is much through their salesforce. And then there are the
more difficult because of the ‘credit crunch’ but supermarkets which also offer mortgages as part
they are still out there, particularly if you have of their determination to be one-stop-shops.
saved a bigger deposit.
Mortgage advisers
Building societies and banks If you really don't know where to start when
Building societies and banks are very similar choosing your mortgage, you could get help
as far as mortgages are concerned; they offer from a mortgage adviser. Many borrowers go for
similar products and compete against each this option as the adviser will help trawl through
other for business. Both rely on their branch all the fixed rates, discounts and trackers to find
networks to sell their products, although they out the best deal for your personal circum-
do sell through mortgage advisers as well. stances. Certainly, in the current environment
Building societies have traditionally been where not many lenders are lending, mortgage
cheaper than banks, but this is not always the advisers will be able to consider those who are
case. still lending to see what is suitable for your needs
and what sort of criteria the lender is looking for.
Specialist lenders Those with special circumstances, such as those
Specialist lenders do not have a high street who have had previous financial problems, or
presence and tend to lend mainly to those who those who are self-employed, may find this
have special needs financially, for instance option particularly useful. Mortgage advisers
those who‘ve had credit problems in the past, may also have access to deals not available on the
those who are self-employed, or those who are open market.
looking to buy a non-standard property. The There are three main types of adviser which
main difference between these specialist lenders you should be aware of as it affects the quality of
and banks and building societies is that special- advice and the number of mortgage products
ist lenders generally run their operation from a a
single location and use mortgage brokers to sell circle6
vailable to you.
Tied or multi-tied agents can recommend most competitive products and how different
their mortgages. They may consider a mortgage products only from specific lenders - this mortgages compare.
application which banks or building societies could be just one lender or a number of them. Also a great many mortgage products are
may reject. It is this type of lender which has This obviously limits the number of products never advertised to the general public, for
been hardest hit by the credit crunch and most, open to you. They tend not to give you advice instance those offered by specialist lenders; you
if not all have disappeared for now. Some may tailored to your needs either, just giving you only hear about them through an adviser. The
still consider you if you have not had any previ- information about what is on offer. They may bigger mortgage brokers are often in a position
ous problems with credit and if you have saved
up a large deposit. circle6
not offer mortgages so check before you go. to obtain special deals and put together special
Mortgage brokers can advise on mortgage mortgage packages.
products across the whole market (the pre- One of the most effective ways to make sure
Direct lenders ferred option) or from a number of lenders you get good advice is to go to a broker or IFA
A recent development has been the internet or (so they are more like tied agents). They’ll who has been recommended to you by a friend
telephone-based mortgage lender. These direct either charge you a fee or receive commission or relative. This is the best way to find a broker
services vary. Some are just an additional distri- from the lender you choose - some may com- or adviser who is diligent, will keep you up-to-
bution channel for the lender, offering exactly bine the two. You should find out upfront how date on new products, and who is happy to
the same products over the phone or internet
that are available in branches. Others are sepa- circle6
the broker you are considering charges. explain things to you clearly and will answer all
Independent financial advisers (IFAs) are not your questions, no matter how many times you
rate companies or subsidiaries, offering a com- limited to mortgages and can give you advice ask them. Bear in mind that most people quickly
pletely different range of mortgages usually at a on a range of financial products. They are not find that the relationship they have with their
lower interest rate because they don't have to limited to specific lenders and can search the adviser is as important - if not more so - than
support a branch network.Just pick up the whole of the market for the best mortgage for whether or not they are tied to a particular life
phone or go online and many direct lenders you. An IFA will offer you an option of paying company or whether or not they charge a fee.
will give you an in-principle decision on the a fee, commission paid to the IFA by the All this may seem like a great deal of effort just
loan there and then and then send you a mort- lender or a combination of both. to receive advice, when you could just go into a
gage application to complete; some allow the Typically, the great advantage of using one of local bank or building society branch.
mortgage application form to be completed these sources for a mortgage rather than Nevertheless, you must remember that going to
over the phone or online and this is then sent approaching a lender direct, is that they have a an adviser means that you will probably get a
to you to be signed and returned with any wider knowledge of all the mortgages available. good overall picture of exactly what is available -
necessary documents. They will know which lenders are offering the and what would suit your circumstances.
www.homebuying.co.uk Homebuying The Complete Guide
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