subject: European Crisis And The Difference Between Mortgage Lenders [print this page] The crisis is the Eurozone has taken centre stage as of late. The Financial Times have highlighted that troubles in Europe may affect mortgage rates in the UK. This is due to the rising borrowing costs of wholesale lending to the banks. The Financial Times highlights that Lloyds and Santander are the most exposed however they are amongst several different lenders.
The larger lenders will be those that are the most exposed as they will have more exposure to funding from within the Eurozone.
There are alot of people who have remained on their standard variable rates after their previous mortgage deals came to an end. There has also been increases in many of the banks standard variable rates already without any movement from the bank of England base rate.
As a result it is now worth shopping around to see if you can secure a better rate than what you are presently on.
There is also encouraging news from certain lenders in the market with Barclays reducing its fixed rate mortgages and mortgage industry experts forecast that the bank of England base rate will stay at 0.5% until 2014 according to an article written in mortgage solutions.
The message is clear to people who have or are thinking of taking out a mortgage. Make sure that you shop around as different lenders have varying economic conditions that are affecting their ability to lend. There is a big difference out there between the different rates available from the lenders.
Do not just take into account the headline rates. Always look at the total cost of the mortgage as lenders may try to entice you in with a good rate but make it back up through higher fees.
The difference in criteria between lenders is also considerable and needs to be taken in to account. For example some lenders will use a 3 x income multiple to estimate the amount that they can lend whilst another lend may use a 5 x multiple. The difference is massive and can considerably affect whether or not you will be able to get a mortgage with a specific lender. Just because one lender says no doesnt mean that all of them will.
Different lenders will also take into account varying sources of income and benefits which needs to be considered if you have income from non standard sources. For example some lenders will take 100% of bonuses while others will not. Some will take into account certain benefits whilst others will not.
If you wish to save yourself the headache of finding all of the above all on your own then you should contact a whole of market mortgage broker who will do this for you. You have to be qualified and experienced to be able to recommend mortgage products to clients. This is for a good reason because mortgages are complex products which need to be carefully analysed to be able to find the most suitable deal. Also the mortgage market is always changing so mortgage experts who keep an eye on the mortgage market everyday will know what is happening. It is not just about the mortgage product either, it is about matching the mortgage product with your circumstances and situation to ensure that it matches your needs. For example if a mortgage has penalties to get out of a mortgage in 2 years time and you wish to move in a year then that mortgage is not going to be suitable for you.
If you are unsure about your mortgage options then please consider using a mortgage broker for these reasons.
