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Mortgages

General Advice

Choosing a mortgage carefully in the first place can save you a lot of heartache and money. Surprisingly few people however take the time and effort to research what is probably the biggest loan they will ever take out.

The reason for this is put down to people not wanting to spend hours on end filling in forms, phoning people who always ask the same questions over and over again or having to go to the building society or bank and queue for ages.

People prefer to enjoy themselves in their time off, choosing a mortgage does not fall into this category, so they often pick the first mortgage, even if it’s the wrong one for them.

A building society survey has shown that 50% of us do this. It also showed that even searching out the best deal when moving home for a second time was too much for over a third of people. They just continued with their original lender. An estimate has been made, based on Council of Mortgage lenders data, that 5 million homeowners could be better of to the tune of £2000 by switching their lender.

Some useful information from the Teachers' Building Society

Ray of Light for First Time Buyers - September 2008

Checklist

If you are a first time buyer there are a number of issues that you must address if you are going to get a reasonable deal.

1. Do you really need a 25-year loan?

2. Do the special offers lock you into the lenders insurance etc, making them rip offs over the longer term?

3. How long am I locked in with the lender? Is there a penalty for early paybacks?

4. What is the best type of mortgage to get to suit your career pattern? (There are several types- see below)

5. What support will the lender provide if things go wrong a few years down the line?

Types of Mortgage

There are 5 main types of mortgage, along with 2 principal repayment methods.

1. Variable Rate
Is the "Starting Point" when you are considering a mortgage. Normally you will enjoy a lower rate than the Variable Rate for some time, depending upon the specific deal. When the deal "Expires" your mortgage would normally revert to the lenders Variable Rate.

2. Fixed Rate
The interest rate is GUARANTEED not to increase (or decrease) over the period of the "Fix". These deals normally offer you savings initially but beware if the "Variable Rate" falls below the "Fixed Rate" you will not enjoy the benefit of lower payments.

3. Discounted Rate
You get a GUARANTEED discount off the "Variable Rate" for a fixed period, for example 2% off for 3 years. As the "Variable Rate" goes up/down so do your payments albeit with the discount.

4. Capped Rate (and Cap & Collar)
The rate at which the cap is fixed is the highest rate of interest you will pay for the duration of the deal, however if the "Variable Rate" falls below the Cap you will benefit from lower payments. Sometimes there is also a "Collar" that sets the lowest the rate can fall to, therefore, the rate can fluctuate but only between the "Cap & Collar".

5. Cash Back
On completion you will receive a cheque from the lender for a pre-agreed sum (Normally a percentage of the mortgage). These deals are usually based upon the "Variable Rate" but sometimes there are other benefits, perhaps a "Fixed rate" or "Discount" etc.

The above details can only summarise the different types of deal available. Occasionally Lenders mix & match deals, for example, a 7% Capped Rate with a 2% discount for 2 years. Whichever type you opt for at the end of the Fixed, Discounted, Capped or Capped & Collared period your mortgage will revert to the Variable Rate applicable at the time.

Methods of Repayment

1. Normal Repayment Mortgage (Capital &Interest)
This type of mortgage is like a "Traditional Loan" whereby you are repaying the amount borrowed over a specified period (Typically 25 years) along with interest to the lender. 2.Interest Only Mortgage
All you pay to the lender each month is interest (No capital). It is up to you to put in place a suitable vehicle for repaying the loan within the agreed term (Again, typically 25 years). The most common vehicles are Endowment policies, Personal Pensions, and Personal Equity Plans (PEP's).

Insurance

Some lenders insist on a policy, or sometimes it is advisable given your circumstances.

These are just a few of the questions you should ask before taking the plunge. In this section you can find a wide selection of mortgage brokers and providers, some of whom will submit your details to a number of lenders saving you the trouble of filling in numerous individual forms. Good luck.

Mortgage lenders

Want to get more information from a mortgage lender? Here are a few to choose from:

Alliance & Leicester
Offers mortgages etc.
Avoncourt Mortgages
Give free on-line quotes service.
Beacroft Young and Puplett Estate Agents
Mortgages and financial services in Sussex.
Bradford & Bingley Building Society
Offers mortgages and loans, savings and investments, pensions, and life insurance products.
Commercial Mortgages
Finding individuals and businesses the best commercial mortgage deals in the market. Looking for that buy to let property, expand your investment portfolio, finance that factory move or simply looking to expand then you won't find these Commercial Mortgages on any price comparison site!
County Financial Management
Mortgages, pensions, investments, life assurance, business finance
Egg
Gives mortgages, online savings, an Internet credit card, and shopping links.
Elite
British independent mortgage brokers.
Emfinance.com
Mortgages online.
Financial Management Bureau
For investments, pensions, mortgages, life assurance and inheritance tax planning.
First Active
Mortgage, car loan, or advice on investments.
Firstmortgage
Free mortgage advice on all mortgage products across the UK.
First Peoples Mortgage
Gives independent mortgage advice in the UK.
FT Your Money
Interactive guides, and news to assist with mortgages, investments, and retirement planning.
General Finance Centre (GFC)
Whether you are buying a business, raising money to pay off debts, looking for a cheaper interest rate or expanding your business GFC can offer commercial mortgages and business finance.
Homeloans Direct
UK mortgage lender.
Independent Advice
Pensions, mortgages, insurance, and any other financial requirements.
Interactive Investor
Mortgages and pension funds.
John Charcol Ltd.
Gives independent financial advice.
Just Mortgages
Mortgages
Lambeth
UK mortgages and investments.
Legal & General
Gives information about mortgages, pensions etc.
Manchester Building Society
Offers investment accounts and flexible, fixed, and commercial mortgages.
Money Extra
Gives independent comparisons of mortgages, ISAs, and banking services.
Moneynet
Gives independent advice on mortgages, investment products, credit cards and personal loans.
Moneyweb
For pensions, mortgages, investments, house buying, life insurance and taxes.
Mortgage Clinic
Gives independent mortgage advice to UK residents.
Mortgages For Business
UK commercial mortgage brokerage.
Mortgages Direct
Offers comparison data using total overall cost and lender's interest rates.
Mortgage Help
Advice for people with past or present financial problems.
Mortgage Intelligence
Independent mortgage advice.
Mortgages Online
Independent Mortgage Advice on the net.
Mortgage Point
Mortgage advice.
Mortgage Source Direct
Independent mortgage and insurance advice.
Newcastle Building Society
A building society offering a range of mortgages, investments and other financial services.
Nottingham Building Society
Mortgages and investments.
Paragon Mortgages
Interactive tools and calculators, including Mortgage Wizard with Spreadsheets to help.
Promise
Specialises in re-mortgages.
Teachers Building Society
Dedicated mortgage service for the UK teaching profession with savings products available to everyone.
TMC Development Finance
Loans for construction, development, investment.
Trustguard Homeloans
Mortgages and re-mortgages to all homeowners in the UK.
UK Commercial Mortgages
Buy property for business with a UK commercial mortgage, lending available from £50,000 up to £2 million, terms available up to 30 years and normally up to 85% loan to value.

Conveyancing

Conveyancing Marketing Services
Get your conveyancing solicitors' quotes here.
Fidler
Online conveyancing service.