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4th September 2017

Mortgages – The Mystery Explained From The Start

Obtaining a mortgage can sometimes seem like an uphill struggle – with all the jargon and processes involved it can feel like a very daunting experience indeed. If you are feeling baffled by terminology then please read this article and help us to help you understand more.

When you first talk to a mortgage adviser or lender ask them to explain their service to you in writing. The “key messages” about the mortgage service must be there –

  • Whose mortgage you are being offered? A lender will offer their own mortgages whereas a broker might arrange mortgages across the whole of the market. They must be clear about the choices on offer for you
  • Do you need to pay for their services and is the adviser due any commission?
  • If mortgage details are being provided on an information-only basis this should be made clear; though brokers and financial advisers must offer advice

Double check whether you are getting advice as there are exceptions and if you choose to go it alone there is no recourse should the mortgage you have chosen turns out to be unsuitable for your needs

Please note too that you don’t always have to pay for advice – some brokers offer a free service and take a commission from the lender.

When a mortgage is recommended, you must always be issued with an illustration of key facts which is tailored to your needs and should contain

  • Your monthly repayments
  • Fees or charges made upfront
  • Overall cost of the mortgage including interest over the full term
  • The rate of interest and type (fixed or variable)
  • What happens is interest rates rise and how your payments will be affected
  • Special features – such as the ability to overpay/underpay and if there are penalties for early redemption
  • The length of your “cooling off period”

This document enables you to quickly compare monthly repayments and what happens at the end of any introductory deal. Read the small print.

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