Uk Mortgage Loan

Written by Jeremy Horelick
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If you've never owned a home before, securing a mortgage loan can be more challenging than you might expect. Just as certain jobs require prior experience of their applicants, many of whom can't get experience for this reason, home mortgages usually require a track record of strong credit. The problem is, if you've never owned a home, how can you possibly convince a bank or other lender that your credit is good enough to qualify you for a home mortgage loan?

This paradox means that first-time buyers often face exorbitant interest rates and other unfavourable terms on their mortgages. Yet plenty of first-time homebuyers enter the market each day, so there must be some institution out there that's willing to take the risk. As it turns out, there are lots of mortgages designed specifically for first-timers, with terms and rates that are manageable enough. The trick is finding one of these mortgages.

Wandering Aimlessly in Search of a Mortgage Loan

You could simply start knocking on doors of major lenders and inquiring about their fixed low-rate mortgages, but you might as well just by a lottery ticket. A far more sensible strategy involves finding a third party to help you broker the deal. Of course, just as there are literally hundreds of different mortgages to choose from, so too are there hundreds of mortgage brokers. So how can you be sure you've found a good one?

Lots of mortgage brokers make their money by working in cahoots with the lenders themselves. If you think about it, this makes perfect sense, as the bigger your mortgage, the more money your mortgage company stands to make. There are, however, independent brokers who are not in service of lenders, but of borrowers. It's their job to help newcomers such as yourself find low rates and ensure that they stay that way.

How Do Independent Mortgage Brokers Do This?

Even if your independent broker isn't working for a lender, it's still in that company's best interests to maintain a good working relationship with all lenders. A successful brokerage should be able to survey the market at a glance and know which lenders offer which terms--that's the job of any reputable broker. At the same time, it's in lenders' interests to keep on good terms with brokers, as they're a key revenue source. What you get, then, is a symbiotic system that is almost self-regulating.

Once you find a broker with good relationships throughout the market, it's possible to secure special rates on all types of mortgages from fixed rates to stepped discounts and offset mortgages. What's more, when it comes time to remortgage, you can lock in a much more favourable rate through a broker than through your current lender. After all, your broker has access to the entire UK market, unlike your present lender, who is only interested in profiting from your ignorance when it comes to the best available rates.

Everything You Need To Know About Your Mortgage Loan

Securing a mortgage loan is an inexact science. Market shifts, changing consumer behaviour, and other variables all mean that the landscape is constantly changing. To stay on top of all that movement would require a full-time investment in the UK real estate market, and most people don't have that time. The best way to stay informed is to have an independent mortgage broker working for you to find the terms that best suit your financial picture.

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