Why you shouldn’t go to your high street bank for mortgages

 Are you looking to buy your dream home, or your high return investment property before the Stamp duty relief deadline of 31 March 2021?

 

If you are, you are probably looking for the right mortgage for yourself.

 

When I was buying my first property, I went to my local bank which I had been using their current account for 10 years. I also went to the bank next door, and the nearest bank to my office. So I could get a comparison.

 

That sounded reasonable right? – When you are shopping for an important thing, you go around a few shops you trust and compare the prices.

 

How wrong was I! It not only cost me more money every month and it ended up costing my credit score too!

 

Unfortunately that’s what a lot of first time buyers, or new property investors do when they are looking for a mortgage.

 

There are two main reasons why you shouldn’t go to your high street/ most familiar bank for mortgage.

 

1.     You won’t find the best product.

 

There are many mortgage products out there, provided high street banks, special lenders, private finance, etc. You can’t find the best product by just asking for a couple of quotes. And the interest rate could make a big difference sometimes. For example, if you are borrowing 100k at 2.5%, your annual interest is £2500. Whereas if you are borrowing 100k at 3.5%, your annual interest is £3500. That’s £1000 a year, and £30,000 over a 30 year mortgage. And it’s not just the interest rate that can make a difference. How much deposit you need to put down, and other factors can all make one product better or worse than another.

 

2.     It can hurt your credit score, which affect what mortgage you can get

 

By going to different lenders and getting multiple agreement in principles to ‘compare the market’, you can leave too many searches on your credit report. Each time you get an ‘agreement in principle’, you get searched by the underwriter. And when you are searched too frequently over a short period of time, which can affect your credit score. If you don’t have a good credit score, you won’t get good rates so you have to pay more (or not be able to get any mortgage at all). So this is serious business.

 

So what should you do instead?

 

The best way to get the most suitable mortgage for yourself is to find a reliable and capable mortgage broker, who ideally has access to the whole market.

 

They can suggest potential products to you based on your situation, before doing an actual search on you. So you should hopefully get one ‘agreement in principle’ and seal the deal!

 

Stay tuned and we’ll talk a bit more on finding your mortgage broker next week :)

 

Stay warm and safe,

Emma xx

 

* Want the step-by-step action points, tools and scripts, to build an extra £2000/month income through property within 6-12 months? – CLICK HERE to book a free strategy session with me.