Bad UK Mortgages – How to Avoid Them

How to Get Really Bad UK Mortgage Loan Quotes and Deals

Your 5 Easy Steps

A mortgage is probably the most expensive thing you will ever buy. Despite this many of us end up with a less than perfect arrangement.

To help you avoid doing this we thought it might be useful to turn it around and show you how to deliberately get a really bad deal.

So, with tongue firmly in cheek;

Let’s Go Get a Really Bad Mortgage !

Your 5 Steps

Step 1: Go to Your Bank 

Step 2: Don’t Shop Around

Step 1: Don’t Worry About The Extra Fees Or Tie In

Step 4: Get Ripped Off With Mortgage Insurance

Step 5: Don’t Get Quote From A Mortgage Adviser

Step 1: Go to Your Bank

We’ll assume that your bank is one of the 99% that have recently jumped on the mortgages bandwagon.

If so, give them a call. Be flattered by the sudden interest you get. What a nice change from when there was that unfortunate little problem with the overdraft…

Don’t listen as they rush through the bit they’re obliged to say about how they only offer their own mortgages !

Don’t ask questions about whether their mortgage really is the best deal you could get from the whole of the market.

But do get excited when they mention their tempting sign up gifts – such as a pen with their logo on it… or a book token… or even a cash gift, like £250. Wow!

That’s right. You’ve just got to sign up to their deal.

Then to celebrate you can buy yourself some cheap champagne. We say cheap because the mortgage you’ve just got from your bank will most likely have cost you many, many thousands of pounds more than necessary.

So you’ll need to start cutting down on any luxuries right now and start saving for when you’re older and that much poorer than you should be… Enjoy!

The morale of the story: Most banks will only tell you about their own mortgage deals. Don’t be fooled if they also mention deals from other household names. They are very unlikely to show you comparisons with the whole of market – which is what you need to see.

Step 2: Don’t Shop Around

As you might know, you really should get three quotes before you buy anything of value. But hey, this is only a boring old mortgage.

So don’t start by checking out the mortgage best buy tables. It’s far too much trouble to look for the best deals that are available to you at the moment.

The morale of the story: All you need is to spend a few minutes checking out your weekend newspaper or websites that show the best buys.

Step 3: Don’t Worry About The Extra Fees Or Tie Ins

Assuming you do bother with the best buy tables, jump at the top placed mortgage with the surprisingly low interest rate. “Amazing – only 2%”.

Without any suspicion call the nice mortgage lender.

Trust them totally. They have your best interests at heart. Unscrupulous? No way. These guys wear suits and ties! They’re not simply trying to lure you in with this great sounding deal.

Anyway what kind of trap could there possibly be?

Umm. Maybe it’s the old favourite;

“let’s get them in with a low sounding interest-rate. Then we can hit them later with additional fees and expensive tie ins“.

Er, what kind of fees? Things like rip off “arrangement fees”, “administration fees”, “valuation fees”, the “fat cat directors fees”. Frankly any fees they can get away with.

Er, what kind of tie ins? Oh, ones like: you can’t move your mortgage away from them for years – during which time they can change the interest rate to as much as they feel like. That kind of stuff.

These fees and tie in’s will more than cancel out the benefit of the low interest rate.

The morale of the story: It might be cheaper in the long run to get a mortgage with a higher interest rate but lower sign up fees and fewer tie ins.

Step 4: Get Ripped Off With Your Mortgage Insurance

This is a easy one. It goes like this. All you need to do is get a mortgage with insurance “packaged in”.

Got that? No? OK, let’s try again: Just agree to buy your home insurance from your mortgage lender.

Most lenders try to offer it. It’s probably optional. But don’t even ask. Just take it. (Remember, you’re getting a bad deal).

The cost of getting this insurance from your lender is usually much higher than buying direct from an insurance company – sometimes by a factor of three.

The morale of the story: You should try to get a quote from an insurance company. Look online for lowest prices. But make sure they do cover you properly.

Step 5: Don’t Get A Free Quote From A Mortgage Adviser.

Say you’ve actually managed to get an offer from your bank or other mortgage lender. Well done. Game over you might think.

You don’t want to bother asking a mortgage broker to see if they can do better for you.

OK, you could easily find one by simply picking up the yellow pages or going online. But let’s face it; it’s better if you rely on yourself as the expert. Right?

After all. If you bought a used car would you bother asking the opinion of someone who knew something about cars? Nah. You’d kick the tyres and trust your gut feeling, wouldn’t you?

The fact that brokers advise on a no obligation basis, and might save you a shed load of money is beside the point.

So what if they can save you a lot of time and effort by quickly checking the entire market for you while you twiddle your thumbs…

Nope. Just go ahead and sign up to the mortgage deal without this safety check.

The morale of the story: Rather than signing up to any mortgage deal without double checking on it with a broker, we would strongly recommend that you do this.

You can read more about

Getting your Mortgage via a Broker

and How to Find Your Broker

That’s it. Just remember that UK financial services really is a jungle.

And despite carefully manufactured appearances to the contrary, the companies involved are not to be trusted.

Use your common sense, treat your mortgage like any other purchase and you’ll be fine.

Good luck !