Although the recent rise in interest rates has flattened growth in house prices, it has not reduced the competition in the mortgage markets. Part of the reason for this is that the number of financial institutions and organisations outside of the banks and remaining building societies has rocketed over the past few years. The other reason is, of course, that even a small slump in the housing market can leave organisations with surplus mortgage funds in their hands which they are anxious to lend out.
So whether you are a first time buyer, moving home or thinking of remortgaging for any other reason, now is a good time to be looking.
Today, hunting for the best bargain has become much easier now that organisations have started to realise the benefits of online marketing which allows them to cut out the middle men in making credit agreements and offer cheaper deals to their customers. This theme is carried over into allowing customers to manage their own accounts, particularly where the mortgages come with additional features, such as a flexible loan or flexible payment scheme, payment holidays or is associated with an Intelligent Finance deal, allowing the customer to operate mortgages, loans, savings, credit cards and current accounts through one web interface.
For the customer, online offerings have the advantage of making it easy to compare and contrast interest rates, charges and features. It also allows them to look at the products of companies that they would not normally have heard of, nevermind consider. The internet also makes it easier for first time buyers with bad credit to find a company that can help.
Applying online is straightforward and a preliminary offer can be obtained within minutes, in contrast to the delays you normally experience on the High Street. A certain amount of preparation will make the process easier –
1. Work out how much you can borrow. Most companies provide a borrowing calculator in which you can enter the amount you are interested in , plus the different interest rates available.
2. Look at the mortgage offers available. If possible, find an Internet site which has a database of offers and features from several different companies. Get a quick quote on any mortgages you are interested in.
3. Produce your personal Key Facts Illustration (KFI) – your personalised KFI contains all the information you need to make a decision about a mortgage, and because all lenders produce KFIs in the same format, you’ll find them easy to compare.
4. At that point you can either apply online, by phone or through your local branch or financial advisor (if you feel you need further information on the mortgage before proceeding).
5. You can also check out deals with mortgage and home insurance online and decide whether to opt for the products offered by the mortgage provider or to make alternative arrangements.
The information given online by your mortgage lender is covered under the applicable financial legislation and you have redress should any of the information turn out to be inaccurate or misleading.
Some people are also worried about security online. However, provided you follow a few common sense procedures, your information should be as safe as it is in the High Street. Read our online security tips and refer to the following government site for further advice www.getsafeonline.org.
Finally, remember that the information you provide to the mortgage company is covered under the Data Protection Act and must not be misused by the company. For example, if you opt out of direct marketing and find your information has been used for this you can sue for damages easily through the Small Claims courts.