Choosing the Best Mortgage

For most of us, buying a home is the biggest purchase we will ever make. Few of us are lucky enough to have the cash available to buy a house outright, so that means getting a mortgage to fund the purchase. With such a major financial decision, it is imperative that we take time to ensure that we get the best mortgage possible to meet our needs and circumstances. Clearly, this requires a little homework to be done, but with a little planning this shouldn’t be too arduous.

The mortgage market is vast, and there are literally thousands of options available. This can look confusing at first, but it also means that it is extremely competitive and there are good deals available. There is more good news in that there is plenty of advice out there, and a quick search will reveal a number of mortgage advisors who can help you.

You should also make an appointment to go along and see your bank or building society to see what they have on offer. Remember, though, to also do your own research and learn as much as you can about the sorts of mortgages on offer and the pros and cons of each one.

Thankfully, there is legislation in place to help make sure that you benefit from good-quality advice. The government brought in new rules in April 2014 which set out guidelines for brokers and lenders. This means that they must offer you the most suitable mortgage for your aims and circumstances.

They will need to assess your income and expenditure in order to make sure that the mortgage you are applying for is one that you can afford. You are not duty bound, however, to accept any advice, and you may choose a mortgage based on your own research. If you choose to do so, this is known as an ‘execution-only’ mortgage application.

Although you can choose your own mortgage, there are good reasons for taking the advice of an advisor. In doing so, you provide yourself with more protection should something go wrong. If it turns out that the mortgage recommended is not the right one for you, you will have more rights when it comes to making a complaint.

Making an ‘execution-only’ application could also lead to a rejection if you haven’t properly understood some of the conditions of the mortgage. Even if you are accepted, it could result in you being tied into an expensive and unsuitable deal.

It is also important to be aware of the different type of advice you can obtain. Your bank and building society will probably offer mortgages, and they will be more aware than most of your financial circumstances. You may even have some existing financial products with them, such as home improvement loans. The advice you get here will most probably be free, but it will concern only the bank’s own products. That is not to say that it will be unsuitable, and they are certainly worth considering against other offerings on the market.

Other sources of advice include mortgage advisors. These independent brokers are experts on the market and can look at a wider range of mortgage products. It is important to know that some advisors are tied to one lender and will only advise on their products. Others will advise on a wider but still limited range of lenders and products.

To get the widest possible choice, you should select a broker who is ‘whole market’, but it is worth noting that even those brokers may not be able to offer products that are sold directly by a particular lender. Once you have got your loan, a whole new range of financial products are open to you, such as homeowner loans, which can often be secured at very competitive rates.