We have watched with concern in recent years as the mortgage market has changed. Choice has been restricted as lenders have reigned in loans and regulators have cracked down on risky activity. Mostly, we see this as a good thing as there is no place for reckless lending in the UK. Borrowers should need to provide more proof of income and expenditure than on the past.
The tough new rules do this. However, there are fewer flexible mortgages available today and this is difficult for sensible borrowers.
Interest-only mortgages, so popular in the last decade are rarely on offer today. Similarly guarantor mortgages have become trickier to obtain. Lenders have cracked down on older people getting mortgages. We believe this is unfair and is an element of age discrimination if they, like the rest of the population are able to afford their mortgage.
The self-employed and expats are finding life more difficult today too. But despite these issues there are still flexible mortgages out there. You need to take expert advice but you can get a deal to suit your needs.
While interest-only mortgages are incredibly rare today they still exist.
They can be perfect for people with irregular incomes. For example, a City banker who relies on annual bonuses. He or she could make minimum monthly payments to cover the interest and then pay off huge chunks of their mortgage with their bonus.
This is sensible decision for many and there are options available. Similarly the salesman who relies on commission payments can pay off more of the mortgage when they have a good month. Private banks will offer interest-only deals for wealthy individuals. Or some lenders are still in the game but only for specific borrowers who fit rigid criteria.
If you speak to an expert it may be that you fit the box. Do not rule interest-only out as it is making a small comeback in certain parts of the specialist mortgage market.
Another option for flexible deals is offset mortgages.
Less than 10 per cent of borrowers use ten but they can be the perfect solution.
An offset deal allows you to use your mortgage like a savings account. So, you can pay as much or as litter off at a time. You can also withdraw money from the mortgage easily for your needs. At a time of super low savings rates it can be a dream flexible solution. It is often viewed as a rich man's mortgage but we believe it can be used more widely.
Lenders will charge higher rates for the privilege of easy access but it can pay for itself. If you have high savings amounts then it is worth crunching the hungers to see how you could benefit. An expert adviser can explain the specific numbers and work out how it can beat suit you. Flexible mortgages exist despite the crackdown.
We are concerned that many people at dismissing them as an option after negative reports about the tough mortgage market. It is difficult but we strongly feel you should consider everything to get the right deal.