Buying a new home is exciting, but I often meet people who have not yet got all the best advice on board and are set to either lose out on properties they thought they could not afford or be paying a lot more than they have to, meaning that they could be adding YEARS to their mortgage term.
Most people start by finding out what they can borrow, which is the right thing to do. However, most people also go straight to the company they bank with, as they think they will get the best deal from them.
The problem with going to your bank is that they will only talk to you about their products and their lending criteria, and it may not be as good as one of their competitors.
An example of how you can go wrong…
I recently met Natalie, a first-time buyer who had visited her bank, in this case, Natwest. Natwest had told her she was eligible for a mortgage of up to £75,000 on an interest rate of 3.14% on the basis that she was able to provide a 5% deposit. Natalie was disappointed with the amount of loan offered to her as she felt she could comfortably afford more. She thought that was it and started looking for properties in that price range.
She saw a property with WeLocate and booked a viewing. The office manager, Pauline, suggested that she chat with me to see if I could find a better mortgage deal for her. It turned out to be a very productive hour. Not only was I able to source a mortgage with better payment terms, but I was also able to secure her borrowing of up to £90,000 – £15,000 MORE than what her bank had quoted her! This completely changed the type of property Natalie was looking for and the area she was looking in, so she was delighted.
Should I still talk to my bank?
There is no harm in talking to your bank if, for nothing else, peace of mind, knowing that you listened to what they had to say. However, do not expect loyalty just because you have been with them for a long time. The reality is that mortgage lending is a competitive market, and the banks and building societies want your business. There are fantastic deals out there, some from lenders you may never even have heard of. But a good broker will be able to compare a range of lenders for you and ensure you get the very best deal. Better still, it can usually be done quickly and without the need for trailing around from bank to bank as brokers have all the information on one screen. It is also likely that your bank will be on their panel of lenders anyway.
The next steps
The lesson here is clear; speak to a broker who can search a range of lenders for you. Not all banks offer the same terms, so you could be losing out significantly if you only talk to your bank. Brokers will also do most of the legwork for you, and if you ever do come unstuck, they can get involved in the process for you and even help to negotiate with estate agents. It is a very personal service rather than you being just a number in a large corporate establishment.
I have been a mortgage broker for over 15 years and have arranged thousands of mortgages for happy clients. I would be delighted to help you find the best deal for your circumstances and, with the help of my support team, get you moving on to the next chapter of your life.
Mortgage Advisor CeMAP
T: 0161 696 0777 – option 2