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A lot to digest
Portuguese delicacies are part of the varied menu on offer on Harrow Road in Kensal Green, London.
Learning about mortgages is time well spent.
If you get the absolutely best mortgage considering your circumstances, you can save thousands of pounds over the life of the mortgage.
If you get the worst, it can be a disaster.
And you probably have the time to spare.
Most property transactions move at a snail's pace. Use the quiet bits for research.
Basic Facts and Figures
How many mortgages are currently available? How many of them are for first-timers. What interest rates are currently available?
Answers to these and similar questions are readily available on the internet, in newspapers and magazines, and on radio programs. Details about specific mortgages are available from individual lenders - mortgage brokers as well as banks and building societies.
Here is a sample:
Moneysupermarket.com is a financial comparison site for mortgages, insurance and other financial products. It also has calculators and other features.
The FSA (Financial Services Authority) website provides unbiased information and is a good starting point to learn about the basic kinds of mortgages: standard variable, tracker, discounted interest, fixed interest, caps and collars. Start with their products explained page.
Radio 4's weekly MoneyBox regularly discusses mortgages and does so in a manner that shows listeners how to evaluate loans, how to pick apart the various conditions that attach to all mortgages.
PWP Tip In, for example, the mortgage brochures avilable in bank branches, read the "terms and conditions" sections (as much as you can stand as well as understand) to start familiarising yourself with concepts such as "early redemption.” Comparison tables in charts provided in, for example, MoneyFacts magazine highlight the main ingredients in the various loans being compared.
If you are already in a financial hole...
National Debtline Has one section for England and Wales, another for Scotland. www.nationaldebtline.co.uk
CCCS - Consumer Credit Counselling Service Provides debt advice, budgeting advice, debt management plans and an urgent Debt Remedy link. www.cccs.co.uk
Citizens Advice Bureaux Provides advice in person and over the telephone, and in numerous languages. www.citizensadvice.org.uk/index/getadvice.htmwww.adviceguide.org.uk
No Pain, No Gain
A first-time-buyer (true story) picked up the mortgage brochure from her building society and, seeing a great many numbers and symbols, quickly put it down.
Instead of wading through the figures in the brochure, she made an appointment with her building society's mortgage adviser. A personal explanation would be easier on the brain than the brochure, she thought.
Wrong!
The adviser nicely, even eagerly explained that mortgage A had an interest rate of 4.2 per cent, an arrangement fee of £250 and early redemption penalties of so many months, whereas mortgage B had an interest rate of only 3.9 but an arrangement fee of £750 and so forth.
His explanation was a blizzard of six point thises and three point thats along with many ifs, ands and buts. It was worse than the brochure because he was unstoppable and uninterruptible.
Later, the buyer consulted the brochure in calmer circumstances. Armed with a notepad and calculator, she systematically compared the various mortgages. Everything the adviser had said was clearly outlined in the brochure. In fact, he had said nothing that wasn't already in the brochure. When the buyer listed the main features of several mortgages and compared them with one another, the main differences between the competing mortgages became clear.