Posted on 17 October 2012 by
Nationwide’s decision to cease all new interest only lending, and only allow existing borrowers to take additional funds on a repayment basis, is the latest example of lenders (predominantly the larger high street ones) trying to push the proverbial square peg through a round hole. Despite admitting that only 3% of its borrowing is done on interest only, it’s taken the decision to slam the door on that particular option down to them – even though for some it will be precisely the right way to go. No real reason has been given, but it would be easy to infer that if the figure of 3% is genuine, then the most likely cause is that the cost of the FSA’s new strict monitoring programme it expects lenders to implement for interest only borrowing, is proving too prohibitive. So if you happen to be one of the 3% then don’t expect Nationwide to be “on your side.”
Their decision is also another case of choice for borrowers disappearing from the high street. None of the big high street lenders really want to be in pole position, or stand out from their peers, particularly from a criteria point of view. There’s no longer any real choice out there, so there’s little point in wearing out a perfectly decent pair of shoes trudging up and down the high street in a vain attempt to find it. Depressingly, most borrowers who take the high street route, are highly likely to end up with a two-year product of some variety, if they can indeed get a mortgage, as these are invariably the cheapest rate and therefore easiest to sell to a potential borrower. Let’s be honest, by the time they’ve been in front of the third mortgage adviser, any person is rapidly going to become numbed by it all.
If you want a mortgage that is as close to perfect as you can get, then the only sensible option is to talk to a mortgage broker, and not just any mortgage broker, but one who is not only whole of market but independent too ! This way you get to deal with one person, who can access the whole of the mortgage market for you at a single stroke. They will probably talk to you about products and options you never knew existed. If nothing else it’ll be a real eye-opener as to what you may have been missing, and for First Time Buyers, finding someone who will act on your behalf in the biggest financial transaction of your life, is a bit like coming across the Holy Grail, opening it, and finding the dead see scrolls
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