Arranging a mortgage or buying baked beans

Arranging a mortgage or buying baked beans?

can you shop for mortgages?There seems to be a growing mentality in some business sectors that mortgage lending is a commodity product and can be treated and sold as such. This seems a strange line to take with a regulated product, sales of which are due to undergo major changes as part of the FSA’s Mortgage Market Review.

We have all seen the impact of treating financial services arrangements as a merely a profit centre and the British taxpayer is still paying for it.

Can you really select a mortgage off of the shelf and put it in your basket with your beans? In theory this would be perfectly feasible. Your beans carry a label that tells you what you are buying, and what the ingredients are – your mortgage could carry similar labelling. This would make the process simple and by definition more cost effective and less expensive – or would it?

Ingredients

When you check the label on your beans you may be surprised to see that beans are only half of the contents. You can expect to be eating tomatoes, salt, sugar, and modified cornflour. How much salt or sugar is not clearly defined, nor are we told how the cornflour is ‘modified’.

Although there are still question marks from the side of the tin, the ingredients of beans are still very simple compared to those of your mortgage – rate type, pay rate, arrangement fee, valuation fee, redemption fee, portability, overpayments, underpayments, initial product term, revert rate.

Can you really buy your mortgage like your beans?

Turn up at your local supermarket with cash and you can walk out with your beans.

Imagine the frustration if you put the beans in your basket and turned up at the till having to produce a clean credit file, your wage slips and P60, your bank statements, a list of monthly incomings and outgoings, details of your dependants, and even details of what you intend to do with the beans.

Now wait weeks to be told ‘we don’t want to sell you our beans and no, we don’t have to tell you why – put them back on the shelf’.

That is the reality for thousands of mortgage customers every week who waste time and money going direct to Lenders advertising a direct to consumer ‘off the shelf’ mortgage proposition.

Knowing the shelf

Contact A Mortgage NowThe reality of the mortgage market is that mortgage products involve the lending of large sums of cash by big businesses who are in it to generate maximum profit out of a borrower. Not surprisingly the staff holding the cash for these multi-nationals are very careful who they ‘sell’ to. You will also find they do not make a habit to telling you of a better mortgage product available elsewhere.

Obtaining a residential mortgage is not about being told that that fixed rates are on aisle 9 and trackers on aisle 11. The key element is finding someone who knows all the products on the shelves in depth and can help you to find the best one for you right now.

Choosing a brand

Contact A Mortgage NowHow often in the high street do you consider a single brand when making a purchase – particularly for a high value item? If you were looking to buy a digital camera would you only consider Nikon products? Would you part with your cash and leave the store without knowing exactly what you were buying, how it compared to other products, and most importantly, if it will do the job you need it to do? – of course not.

Obtaining your mortgage from your supermarket is a nice idea until you start to think about the implications. Your biggest ever financial commitment will be put on the shelf and sold to you next to your baked beans. If your mortgage is past its ‘best before date’ when you get it home, will you be able to get a refund next week?

Understanding the mortgage market

Contact A Mortgage NowWe estimate that less than 10% of borrowers are successful when applying for directly offered mortgages.

It does not take much for you to trip on one of the hurdles lenders put before you. Deposit or income too modest, credit score not quite there, other debts, other mortgages, maternity, temporary employment, self-employment – the list is endless.

Your independent mortgage broker understands the mortgage market and can fit your situation to the right product. This reduces your risk, your cost, and your stress. Think of your mortgage broker as a personal shopper who can point you in the right direction first time.

If you require independent mortgage advice please complete our secure online mortgage request form or call our team now on 020 8979 9684

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