Applying for a residential mortgage is a complicated process and its not just simply going on the Internet finding the cheapest price and hoping for any easy ride. The mortgage market has fundamentally changed since the start of the credit crunch (next month the credit crunch is officially 5 years old).
Lender criteria has changed dramatically and lenders change criteria on a regular basis so that is where it is best to speak to a whole of market mortgage broker. It is important you dont just speak to the banks own adviser because all they can sell you is a product from their own product range; you have no idea if this is the best product for you as a customer.
Richard Alton is a whole of market mortgage broker and helps people find residential mortgages through his company, Alton Mortgages, he says:
Finding the right mortgage and applying for a mortgage once found is key. A repayment mortgage is the most suitable type of mortgage for most people and to be honest banks have pretty must closed the loophole on interest mortgages for your main residence. One of senior managers of the main banks said this to me recently you have 10,000 customers coming to the end of their mortgage term, they are on interest only and their house prices have dropped and they have very little equity in their property what do they do? There is such a blame culture in this country, which is why banks are being very careful.
With interest only mortgages the key question to ask can you guarantee to pay off the mortgage at the end of the mortgage term. If you cant answer this with confidence you need to go onto a repayment mortgage because the only other option will be to sell the house at the end of the mortgage term.
I get many enquiries about endowments (something I am glad I have never sold and cant advise on them) but most of the time customers have a shortfall, which they need to address. One possible solution is to convert the shortfall onto a repayment mortgage.
Variable rate/discount rate mortgages these can be very
dangerous as there are no set rules on what rate the lender can set and they can change the rates at any time, as we have seen recently by Halifax, Bank of Scotland and the Coop to name a few. Fixed rates are like paying rent and give you some security but once the deal ends you are likely to go onto a tracker or a fixed rate.
Tracker rates that follow the Bank of England are also popular as they only change when the Bank of England changes their rates and this hasnt happened for a long time, they can also be cheaper than a fixed rate.
Cash back deals - watch the catch there is usually no such thing as a free lunch
The Key fact document this is meant to show that the products can be compared and I describe this to my customer as apples against apples and to be fait the FSA have done a good job. After a quick glance you can see the costs, total cost to pay, the interest rate, monthly costs and any redemption penalties.
It is no longer sensible to buy a mortgage just on price from the Internet, its important to get advice from a qualified whole of market mortgage broker. The whole of market broker will navigate you through the mortgage maize as this is what they do every day of their lives and have the relationships with the banks.
About Alton Mortgages
Alton Mortgages is an established Whole of Market Mortgage Broker based in Maidenhead, Berkshire. Established in 2005, customer service is at the heart of what we do, and we recognize that our clients are individuals with very unique requirements. We have access to lenders that you cant find by simply walking down the High Street and offer a fast, hassle free individual assessment whether you want a residential, commercial or buy-to-let mortgage.
We will walk you through the entire application process ensuring that your mortgage offer is returned as soon as possible. We also offer advice on Insurance policies, whether this is for Life Cover, Critical Illness, Income Protection or Buildings Insurance.