Get The Best Mortgage Advice

When you want a mortgage, you take advice, arm yourself with a lot of information and are in a position to choose a lender and the mortgage product which best suits you.

Or are you? Where do you start?

There are literally thousands of different mortgage products available at any one time. Where do you start to look for the one that is right for you? Of course you could walk down the high street calling in at the various bank or building society branches and ask for their advice. Do remember that this may not necessarily be completely unbiased advice as there just may be a vested interest in steering you towards one of their own products, even if the advisory service appears to be separate from the prime lending function. Also it may be surprising to learn that not all the lenders’ products will necessarily be mentioned as many are only made available through an accredited network of ‘introducers’.

There are companies advertising details of mortgages on the net with their own web site and you can trawl through these to check terms and rates. It can be a pretty time consuming task, however, not only to find the right rate but also to establish the conditions relating to any particular product. Conditions which you now realise are of some importance in making your decision but which may not be immediately apparent from the publicity material of the proposed lender. After all, most people would not know what is relevant and, therefore, what to look for. Assuming you are lucky enough to land on the ideal product for you, you have to be aware that you may be charged a fee for actually placing the business. This is not unreasonable, after all, a service is being provided. The normal fee would be to a maximum of 1% of the loan facility but may vary according to how much work is carried out on their behalf.

You may feel, if you are going to pay for a service, you might just as well engage an adviser or introducer to trawl the data for you. In this context we are not talking of the adviser employed by the lender. Broadly speaking, advisers may be divided into two categories, the I.F.A. (Independent Financial Adviser) and the independent mortgage adviser or broker.

The Independent Financial Adviser

Controlled under the Financial Services Act 1986 and also under the conduct rules of 1987 they are compelled, when giving investment advice to disclose the capacity in which they act, for example, for an insurance company. They are empowered to give advice on and sell, regulated products such as endowments, pensions, investments etc. and many link this with advice on mortgages. They will be registered with the Mortgage Code.

Independent Mortgage Adviser

At the present time the independent mortgage adviser is under no statutory regulation, but by far the majority subscribe to the Mortgage Code. This lays down certain procedures relating to conduct and advice which must be adhered to. Many lenders will only accept introduced business from those who are registered on the Mortgage Code Register of Intermediaries. In order to be registered the adviser (or firm of advisers) must have a current consumer credit licence from the Office of Fair Trading, professional indemnity insurance and they must also give an undertaking to abide by the mortgage code in their dealings with the client. This is designed to protect the borrower as it sets out minimum standards which both mortgage lenders and intermediaries have to meet.

Arthur Venables has worked as an independant mortgage adviser and in 2002 he was the author of ‘Mortgagegen’, a layman’s guide to choosing the right mortgage. Visit http://www.debt-consolidation-loans-uk.com and http://www.debtconsolidationloans.org.uk

This entry was posted on Wednesday, January 31st, 2007 and is filed under Home Mortgages, Mortgage Refinance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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How Credit Scores Affect Mortgage Applications

With a good credit score an applicant will receive prompt response from many lenders, all of them offering low interest rates and low down payment options. The loan amount offered also may be high. On the contrary a low credit score would result in a lot of rejection from various mortgage financers. Because creditors wouldn’t come forward easily to give credit to individuals that have a history of difficulty in repaying existing loans. After all, creditors take risk when they finance mortgages against the credit history of a debtor. Naturally, they will wish to remain on the safe side and pick up less risky ones that have good credit histories. A good credit score means less chance of missing on payments and therefore less risky.

But there are some real risk takers that will come forward to finance mortgages for individuals with bad credit scores. They would charge high down payments and always high interest rates though. They may also fix additional charges for every little paper work and may charge high closing rates. The loan amount offered will also be considerably less. The individual with poor credit scores will not have much choice but to accept the terms and conditions as there are no other alternatives. This is a tight situation and to avoid this you must have a good credit score.

People with bad credit may fall in to the trap of ’secured loans’. Secured loans are the ones where the loan applicant offers an asset as collateral security. The lender becomes secure about the repayment of the loan and not the borrower. Securing a loan with bad credit score becomes easy only when the applicant is willing to offer some asset as collateral security. This again is a very dangerous situation where an individual runs the risk of losing his entire collateral asset in case of failing to pay the loan installments in time. An individual should always avoid such type of a loan.

Resort properties normally require large amounts of finance which a person with bad credit may find it difficult to obtain. So it is always advisable to keep your credit score high. Incase the credit score becomes low due to unavoidable financial reasons it can be improved upon. There is no need to lose hope simply because a person has a low credit score. If the property that he intends to buy has good equity he should go out and try to obtain finances for it. There are many sub prime lenders willing to offer their services.

For a review of your credit report as it relates to a mortgage loan and a consultation on the best loans available to you, give us a confidential, no obligation and no cost call.