banks v smaller lenders

[charliebean]

Hi,

We are about to buy our first property and are shopping around for a loan. Can someone give me a bit of a 101 in regards to the smaller unknown lenders that seem to be offering the cheaper rates and fee's compared to the big banks. Should the smaller lenders be avoided?

Thanks

 

[Wishlist]

Guess if they are unknown lenders then we cant be of any help.

However, with regard to lenders other than the big four banks and their collective ownerships, then I can say I've been happy with lending I've sourced through smaller lenders.

I would say the key to any lender you approach is to determine all that you need and see if that lender can deliver a product that suits you.

Research what they offer thoroughly so there'll be no surprises... like high exit fees, or unexpected solicitors fees, or inflexibility with changing to fixed or vice versa.

Once you've narrowed the field down a bit, post on here again and see if anyone can give you feedback on your chosen few.

Kind regards.

 

[Marty McDonald]

Most are funded by banks these days and lie somewhere between a broker and a lender. I.e. they are mortgage managers which means it's not their money they lend but they manage the process from application to eventual discharge of the loan / mortgage. Just be careful about the deferred establishment fees still payable until July at least with most of them.

I personally have never been that keen on them but some people like them. My main issue has always been "who is my client actually dealing with"...."what if they or their funder goes broke" etc. With the main stream lenders you are on board with a large group of the population which gives some form of comfort. Whether it's perceived or real is another debate!