Factors when choosing mortgage provider

NotAGolf

NotAGolf

NotAGolf

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When looking for a mortgage provider, what would you look for/avoid in a lender? Or would you go for which ever is the cheapest?

I'm in that boat now and was wondering whether my thoughts were shared by others or if I'm just being stupid!

For example,
- I'm put off Northern Rock due to what happened to them a while ago
- put off by Santander being based abroad
- put off by the Post Office as they're not a normal bank/building society like the others
- put off by first direct as there's no branches anywehere near me if I wanted to see someone
- put off by Yorkshire building society as I've never heard of them...

As you can see that's quite a list off the top of my head. Are any of those reasons valid or do you think I'm being foolish?!
 
Probably the cheapest - not sure many of those reasons would come into it for me.

Taking just the first one:
- Northern Rock is now probably one of the safest banks to keep your money in, as it's basically state owned.
- Even if it wasn't, you're not keeping your money with them - they're lending money to you! What do you lose if they went bust? Nothing. Your loan would most likely be sold on to someone else in the unlikely event it's wound up.
 
I'm looking myself in preparation for buying a flat sometime this year. Mainly looking for the cheapest but also have to take in to account any conditions. I'm looking to at least fix for the first two years so that I know i have a monthly payment I am comfortable with.

I wouldn't necessarily be put off the post office as they are not a normal bank, can't see the government letting anything terrible happen to them.

But if Halifax were to offer something close to what I can get elsewhere then I'd have to probably consider them as I have all my accounts with them at the moment. Not sure why I think that though. (they will give me 0.2% of the rate though as a CA customer, i think other places do this as well)

Moneysupermarket is a good place to check prices(but not everyone is listed there). Woolwich seem to have decent rates on fixed ones atm
 
All the reasons for avoiding the mortgage providers you have listed are not really relevant. That's not to say that the providers are any good. Just don't discount them for those reasons.

Ironically, First Direct (who have no branches) are actually regarded as the provider with the best customer service! They also have some of the better rates.

Santander are a Spanish company, but they are also one of the biggest UK providers. Personally, I wouldn't take a mortgage with them in a million years, based on my experience with their customer services.

I have had a mortgage with Nationwide (6 years) and HSBC (last 2 years) and both have generally been fine, although I haven't really had any need to complicate things with them.
 
I like to check out Building Society's first.
There aren't many of them still around, but remember they are looking to work for the "mutual" whereas a bank is always working for it's shareholders.

When we were looking for our first mortgage the building society's offered us a lot less borrowing.
However they were actually bothering to look at our income rather than doing the bank thing of "How much do you want?"

I'm, actually I know there will be good deals from banks available, but don't rule out your local building society.
 
daver said:
I'm looking myself in preparation for buying a flat sometime this year. Mainly looking for the cheapest but also have to take in to account any conditions. I'm looking to at least fix for the first two years so that I know i have a monthly payment I am comfortable with.
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Imo, there are two big problems with fixing for two years.

1:It doesn't give you any real security as rates are currently VERY low and are likely to be at a higher level when you come out of your fix. Take it with a pinch of salt if you like, but the general consensus is that rates will go up a little over the next 6-12 months (maybe 1% or so), but in two years it's anybody's guess and after the recent near collapse of the global economy, this could be a nasty sting in the tail.

2:You will probably pay a fee to fix for two years. and then in another two years, you will have to pay the same fee to fix again.

Compare this with fixing for 5 years. You pay one fee (rather than 2.5 fees) for the five years. The rate you pay gives you security for a good period of time, which will give you time to gear up to rate changes when you come to the end of your term.


It comes down to how much certainty you want in the time periods mentioned
 
Santander aren't based abroad, your mortgage will come from a UK company (used to be Abbey/Alliance and Leicester) but that company is owned by a Spanish parent. They still have to comply with UK regulations. My mortgage is with them (was Abbey), have had limited contact with them but so far have found them to be pretty good.

Yorkshire Building Society are one of the biggest Building Societies around (think it's second behind Nationwide) and have been for some time.

IMO you're quite right to think about this though. In the good old days it didn't matter who you got your mortgage with, you committed for a fixed period say 2 years then switched to someone else if you didn't want to be with them anymore. These days I'm not so sure that switching should be taken for granted, ask Northern Rock customers.
 
-cheapest/best deal for you at the time
-who will give you a mortgage (this is a big one these days as they are much tighter lending criteria)
-previous experience with any firms.
 
cochoc said:
Imo, there are two big problems with fixing for two years.

1:It doesn't give you any real security as rates are currently VERY low and are likely to be at a higher level when you come out of your fix. Take it with a pinch of salt if you like, but the general consensus is that rates will go up a little over the next 6-12 months (maybe 1% or so), but in two years it's anybody's guess and after the recent near collapse of the global economy, this could be a nasty sting in the tail.

2:You will probably pay a fee to fix for two years. and then in another two years, you will have to pay the same fee to fix again.

Compare this with fixing for 5 years. You pay one fee (rather than 2.5 fees) for the five years. The rate you pay gives you security for a good period of time, which will give you time to gear up to rate changes when you come to the end of your term.


It comes down to how much certainty you want in the time periods mentioned
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Yeah, I can understand that and will look in to the different options when I get down to it seriously, but something I have to consider is my financial circumstances should be a lot different in two years. Provided I pass exams I am guaranteed a pay rise & bonus every jan, and in 2 years I should either be fully qualified CIMA or applying for membership, if I can comfortably afford the mortgage payments now at a fixed rate, I should be ok coming out of a fixed rate in 2years. The fees on the 2 year fixed rates I have been looking at have been the same as the variables.
 
Try a broker, should be able to come up with a good deal for you as they normally have some decent clout with lenders. Most will provide a free search for you as they make money when you actually take up a deal.
 
Nothing comes into it for me other than:

- Price
- Suitability (ie, termination fees, arrangement fees, again this is price really)
 
Jez said:
Nothing comes into it for me other than:

- Price
- Suitability (ie, termination fees, arrangement fees, again this is price really)
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This exactly.

Number 1 is the rate, however you might wish to take a slightly worse rate to avoid a ridiculous arrangement and termination fee which should save you money over the length of the mortgage.

I don't think I'll be shopping around for a fixed rate at the moment, a rise of 1.5 or so percent would still give me the same interest as I could have got with a fixed rate at the start of my term. However, I do worry that in a couple of years time we could see significant changes which will royally screw me and half of the homeowners of Britain!
 
if you're a graduate you'd be well worth looking at Britannias no fee tracker deal
 
Yorkshire building society you've never heard of it presumably because you dont live in yorkshire.

If you live in yorkshire you'll have heard of them and seen branches in your local high street.

They pre date the massive coroporations, which is a good thing.
 
Our mortgage is with First Active, we have never even spoken to them, it was all done through and IFA.

We are paying base rate + 0.1%
 
mpledge52 said:
-clipped original post-
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I'd only use those reasons after I'd found the offer I was after.

Find the type of rate that you want, find the providers offering it, find the best of the deal.... and then choose between providers offering the deal or very close to it.

I think it's best to do choose the rate before you choose between lenders. The vast majority of people have little or no interaction with their mortgage lender, so it doesn't make sense to pay lots to choose the one you want.
 
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