An easy way to choose the right mortgage

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The number of mortgages has doubled in the last two years, according to financial information provider Moneyfacts. This is great news for borrowers as it means they have a lot more to choose from.

But with increased choice comes more scope for confusion. And despite the increased number of deals, it’s still difficult for many to find a suitable mortgage because lending criteria remain tight.

Double the deals

Two years ago the number of prime residential mortgages fell to an all-time low of 1,097 during the credit crunch. Lenders had both limited funds and a severely curtailed appetite to lend to anyone other than the lowest risk borrowers.

Today, the number of mortgages available has more than doubled to 2,447 says Moneyfacts, and those borrowers with a 20% deposit have seen a threefold increase in the number of deals on offer.

The number of 90% loan-to-value mortgages (for those with a 10% deposit) has risen by 128% in the last two years, and the number of 75% deals has increased by 102%. Impressive numbers!

Research by mortgage sourcing firm, Mortgage Brain confirms that there are now far more mortgages on the market. It reckons that the number of deals available through mortgage brokers shot up in January alone.

It said that the total number of available mortgages to intermediaries rose 21% last month to almost 10,000 – the highest level since September 2008. This is compared to just 4,457 at the beginning of February 2010 (nb.Mortgage Brain and Moneyfacts have different ways of counting deals, hence the large discrepancy in their figures, though they have both recorded a massive increase).

This increasing availability is brilliant for consumers, although it still isn’t easy for everyone to secure a homeloan.

Still strict

For example, the latest figures from the Bank of England show a fall in mortgage approvals as lenders continue to be strict about their affordability criteria. Rising household costs are also reducing the disposable income of many families and this affects their ability to get a mortgage.

Now more than ever, borrowers need the help of a professional mortgage broker to guide them through the process. A huge increase in products brings more mortgage choice, but making a decision isn’t always easy if you don’t know lots about the different types of mortgage deals, or you would simply like the opinion of an expert when it comes to choosing your mortgage.

In addition, with many lenders still imposing strict criteria, it can be invaluable to get help from somebody who knows which lenders are likely to accept your mortgage application, saving you time and hassle on rejected applications.

Plus a broker can offer you so much more.

Personal and proper advice

Mortgage Brokers have to pass professional mortgage qualifications, as well as being fully regulated and authorised by the Financial Services Authority, in order to give advice.

The great thing about this ‘full advice’ is that it is tailored to your specific circumstances and is the broker’s professional opinion based on listening to your needs and searching the market for appropriate products.

If you want personal and proper advice, a mortgage broker can offer you that. Many high street lenders will only offer you information about their products (though a few offer advice).

Quick and easy

Your mortgage is likely to go through more quickly with a broker than if you deal directly with a lender. Brokers work with lenders day in day out, and they know which are currently experiencing delays and which are providing speedy service. They also know how to make sure your application is accepted first time and have a hotline to the decision-makers if your application needs any explanation or chivvying along.

On your side

If a better deal comes along in the future your mortgage broker will tell you about it. Your lender is never going to inform you that a competitor has launched a mortgage that could save you money.

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Plus many mortgage advisers specialise in other areas of personal finance so it’s not just your mortgage they can help you with. When it comes to insurance a broker can tell you what you really need to take out and find the best deal for you from the whole market -- brokers also have to be fully regulated to advise on insurance, so their advice can be trusted.

Access the whole of the market

A mortgage broker will scour the market for the right deal for you, searching the products ranges of many lenders. This includes some ‘broker-only’ lenders that consumers simply cannot access direct. In addition, the best brokers will also advise you if a direct-only deal is the most suitable for your circumstances.

Out of the box

Not all borrowers are the same and if you have unusual needs or circumstances, high street mortgage lenders are not always well equipped to help you. But there are niche mortgage lenders that operate in specialist markets, and many do not offer their products direct to consumers, so you have to access them through a mortgage broker.

Open all hours

Mortgage advisers know that borrowers cannot always take a day off work to discuss their homeloan. Your bank branch may close at 5pm sharp but your broker will most likely work evenings and weekends. They will even come to see you at your home or office if that suits you better. Plus most brokers now operate over the phone and email if that is a better way for you to deal with them. They work around you and your needs.

Right of redress

If you receive ‘full advice’ you have access to the Financial Ombudsman Service which can look into the advice you were given and order redress or compensation if appropriate. All mortgage brokers are covered by this scheme for residential mortgage advice. If you receive ‘information only’ from a high street bank, you don't have the same comeback if you later believe the product you took to have been inappropriate.

lovemoney.com’s mortgage service

The lovemoney.com mortgage service can help you to find the best mortgage for your needs. Our qualified advisers are all fully regulated by the Financial Services Authority, have passed professional qualifications and have access to thousands of mortgages from across the market. If you want personal, free, expert mortgage advice, simply fill in your details here and we will call you back at a time that suits you.

Use lovemoney.com's innovative new mortgage tool now to find the best mortgage for you online

At lovemoney.com, you can research all the best deals yourself using our online mortgage service, or speak directly to a whole-of-market, fee-free lovemoney.com broker. Call 0800 804 8045 or email mortgages@lovemoney.com for more help.

This article aims to give information, not advice. Always do your own research and/or seek out advice from an FSA-regulated broker (such as one of our brokers here at lovemoney.com), before acting on anything contained in this article. 

Finally, we tend to only give the initial rate of a deal in our articles, but any deal which lasts for a shorter period than your mortgage term may revert to the lender's standard variable rate or a tracker rate when the deal ends. Before you take out a deal, you should always try to find out from your lender what its standard variable rate is and how it will be determined in the future. Make sure you take all this information into account when comparing different deals.

Your home or property may be repossessed if you do not keep up repayments on your mortgage.

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