UK Mortgages – Getting a mortgage in the UK

We get numerous questions about UK mortgages, so we thought it useful to give you some information on the UK mortgage market. Mortgages & the mortgage system in general, work much the same way in the UK as they do in the US with a mortgage being a loan secured against a specific property.

Why would you want a mortgage?

A mortgage allows you to borrow the money to buy a property if you want to purchase your own home and you don’t have the funds to pay for the property outright. A mortgage allows you to become the ‘owner’ of the property whilst offering the lender the ‘security’ of the value of your property should you fail to repay the mortgage.

Thinking about getting a mortgage?

Taking out a mortgage is a big step. It’s important you think carefully about what you want from a mortgage and take professional mortgage advice before you make your final decision.

Financial implications:
Think carefully about how much you want to borrow on your mortgage. Be realistic about your financial situation. Ask yourself if this is a sensible time to make such a big commitment. Ask yourself some questions:

How much do you want to borrow?
How much can you afford to borrow?
How much do you feel comfortable borrowing?

Finding a mortgage in the UK:

It’s not easy finding the right mortgage and such a big commitment will require some personal mortgage advice. There are generally three places UK consumers go when they’re looking for a mortgage:

Direct to Bank
Mortgage Broker
Online / Mortgage Website

Most Banks, Mortgage Advisers & Websites will offer some form of personal contact to talk you through the mortgage options available before taking you through the application process. In the UK, all mortgage professionals are regulated by the Financial Services Authority (FSA) and the mortgage market operates to strict codes of conduct.

Look carefully at mortgage options:

At some point you’ll get a mortgage illustration which shows the mortgage terms, key terms & financial details of the mortgage. Compare the different fees and costs of getting the mortgage as well as the repayments. Check out the various features and options, such as repayment holidays and overpayments; and consider the exit costs of the mortgage.

Don’t be embarrassed about asking questions. This is a big decision and you need to ensure that you understand the ins & outs of the mortgage agreement.

UK mortgage resources:

Here are some great online resources to start with when searching for a UK mortgage:

www.moneymadeclear.fsa.gov.uk – Official financial resource from the Financial Services Authority for mortgage comparison tables & practical mortgage advice. www.thinkmoney.com – Leading UK finance company offering mortgages, remortgages, loans & debt solutions. www.hsbc.co.uk – Leading UK mortgage lender