Mortgages

Mortgage Advisors

Independent mortgage advisors can advise on the best deal from a range of lenders. They should offer a free service to borrower (paid by commission from lender), borrowers pay no more than if they'd arranged the loan directly. Before taking advice, check the advisor's qualifications, regulatory body membership, and adherence to a recognized code of conduct. Ensure they really are independent and impartial, and not driven to recommend the mortgage that pays them the highest commission.

These days the Internet allows you to search and compare the mortgage market from the comfort of your desktop with sites such as http://www.moneymadeclear.fsa.gov.uk/campaigns/mortgages.html from the FSA, the UK's official financial watchdog, which provides impartial comparison tables to help find the best mortgage for you.

To Pay Off or Not to Pay Off

We all dream of being mortgage free, but consider this: mortgages are great deals on the part of the lender. If you repay diligently they will get back much more than they lent. If you don't pay they get to take your house, and real estate is probably the safest investment out there. Lenders really can't lose which is why they go to great lengths to secure your business.

The result is that mortgages are generally the cheapest form of debt, so why not take advantage?

It's always advisable to have some ready money for a "rainy day", at least 3 months salary is often suggested. But what else could be done with money you might pay off the mortgage?

Is the likely return from alternative usage higher than what you're paying on your mortgage? If so, go with the alternative usage.

Do you have other more expensive debts to clear first, eg credit cards, store cards, hire purchase, personal loans...? If so, clear them first.

Final Word

As we said at the beginning your mortgage will most likely be the biggest financial commitment of your life. Take the time to consider the numerous deals on offer before finding the one that is truly best for you.