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Choosing a Mortgage Company

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Just as there are many types of mortgages and mortgage deals to choose from, there are also many sources where you can go to get a mortgage. Your key choices are to use a mortgage broker, a more general financial adviser, or shop around yourself and go direct to the mortgage company. For many people, choosing a mortgage company means finding a mortgage company offering the lowest APR rate.

If you decide to use an adviser you can choose between a specialist mortgage broker and a general financial adviser. A general adviser will look at all your financial affairs if you want, not just your mortgage. As opposed to mortgage companys who can only offer their own products, an adviser can look at the whole market for you and

consider mortgages from a number of mortgage companys. Advisers can also offer you advice and information tailored to your needs. In the UK, All firms or Individuals arranging or advising on mortgages must be authorised to do so by the Financial Services Authority (FSA). If you are unhappy with advice from an authorised firm you usually have the right to complain and may be able to claim compensation.

As an alternative to using a financial adviser, you can arrange a mortgage directly with a mortgage company – like a building society, bank or specialist mortgage company. A mortgage company will only recommend their own mortgage products although they may have several you can choose from.

When choosing a mortgage company, you should consider the competitiveness of the mortgage company’s rates, their fees and penalties, their customer service and their reputation. You’ll also want a mortgage company you can trust, and someone you can work with effectively. Remember you’ll have to deal with this company for many years to come.

1. Building Societies
Building societies are mortgage experts, they offer specialist advice and they usually offer very competitive rates. Many national ones have a branch in most major towns and cities while the smaller ones tend to specialise in catering for home buyers in particular areas. For example, the Cambridge Building Society specializes in helping people who live in Cambridgeshire.

2. High Street Banks
Banks usually have years of lending experience and they have more branches and greater coverage across the United Kingdom. Their standard rates tend to be higher than those of building societies but they often offer the best introductory offers on mortgage deals. Some of the big banks now have special arrangements with building societies where the building society is the one that handles all the mortgage business for the bank.

3. Specialist Mortgage Lending Companies
Specialist mortgage companys lend to a particular type of niche market. Many of these specialise in providing mortgages for people in special circumstances who would not normally be offered a loan by their bank or building society. This includes people with adverse credit, the self-employed, part-time employed and those purchasing overseas properties. Many mainstream mortgage companys have established specialist subsidiaries for non-standard mortgages such as these. You may have to deal with them over the phone, by mail or over the internet as most of them do not have a wide network of branches across the country.

4. Insurance Companies
Some insurance companies offer mortgages and other financial products together with their range of insurance products. They may sometimes offer certain deals in association with other financial institutions such as banks but they do not specialise in this area and they may not necessarily offer the best rates.

5. Intermediaries and Mortgage Brokers
Instead of going directly to the mortgage company for a mortgage, you can approach an advisor or broker to search the market for the best mortgage deal for you. Some intermediaries are tied to particular mortgage companys and they may only offer products from their mortgage company. Others are independent so they have a much wider market to choose from. A credit broker is a firm or person who introduces you to a mortgage company for the purpose of borrowing money. The task of the credit broker is to obtain the loan you require on terms that are acceptable to you.

Whatever you decide, it’s important to understand how mortgages are regulated and sold in the United Kingdom. Buying with advice puts you in a stronger position to complain and get compensation if you later discover that the mortgage is unsuitable. You can read some more articles about mortgages at: http://www.commercial-mortgage- guide.org.uk/mortgages/

© Copyright 2005, Bwalya Mwaba writes for the The Commercial Mortgage Guide. Visit our website for mortgage related news, articles, tools and more: http://www.commercial-mortgage- guide.org.uk/. This article may be reprinted as long as all the above links are active and clickable and this author box (byline) is not edited.

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Choosing a Mortgage Company

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