Navigating the mortgage market can be daunting — we spoke to a finance expert to get some advice that could make all the difference.
In an interview with Yahoo Finance Future Focus, Islay Robinson, CEO of Enness Global finance brokers, offered guidance for those seeking a mortgage.
Explore your options
Robinson emphasised the importance of exploring multiple lending options and being well-prepared with documentation in advance of any application.
“Don’t just speak to your own bank,” Robinson advised. “It’s really easy to go to your bank and ask them what they’ll do for you. That’s what 90% or around 80% of people do when they’re buying their first property.”
He added that while this might seem convenient, it severely limits your options because there are hundreds of lenders available, catering to first-time buyers, international buyers, and high-net-worth individuals. “By only consulting your bank, you’re reducing your chances of finding the best mortgage to about one in five hundred,” he said.
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Get organised and evaluate your situation
“To get a mortgage in the UK, lenders operate on a binary decision-making process. They consider around 100 data points, and you need to meet at least 90 of these criteria, which include factors like age, income, and deposit. Therefore, having all your documentation and paperwork in order is crucial,” Robinson explained.
Robinson also addressed the benefits of owning assets versus holding cash. “Wealthy people buy property, that’s a fact, and they buy it because it’s a good investment. It’s a safe place to put their capital,” Robinson said.
He added that in the recent past, when there was a low interest rate financial environment, it made sense to take out a mortgage and invest cash in higher-return assets like stocks or businesses. However, he cautioned that with changing interest rates and tax considerations, it’s essential to evaluate each situation individually.
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There are also alternative investment approaches towards real estate. “[Enness Global has] arranged loans against businesses, liquid shares, securities, crypto, and even unique assets like bloodstock,” he added.
The potential for bitcoin-backed mortgages in the UK
Bitcoin-backed (BTC-USD) mortgages are already available in some other countries. “There’s a lender in the US that does already have bitcoin backed mortgages, that we are familiar with. We’ve been kind of tracking their progress,” Robinson said.
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“There are lots of lenders that will lend against bitcoin, some of the big crypto houses like Galaxy and so on will lend against bitcoin. There’s a growing number of Swiss private banks that will lend against crypto, and there’s a lot of alternative or secondary lenders, that will as well so if you look across the whole lending landscape,” he added.
Bitcoin has several qualities that make it an asset class that is both attractive for investors and dependable as collateral for loans, according to Robinson. “Bitcoin is an asset class, and one of the underlying features of it is that it is secure on a public ledger, everyone knows where it is, how it’s owned and how it has been moved,” he said.
High street lenders still cautious about the cryptocurrency sector
However, high street lenders are still cautious about gaining exposure to the cryptocurrency sector.
Robinson said: “There was one very wealthy customer and his assets were property and businesses and he had two things. One was in ethereum (ETH-USD) and the other one was a holding in a Dutch adult video website. So, the bank didn’t have a problem with the porn website. They had a problem that he had some crypto, and that’s how lots of lenders still look at digital assets.”
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When asked if lenders are beginning to embrace digital assets, Robinson said: “Lenders aren’t catching up as quickly as you would think. If you walked into a high street lender in the UK and said you make your money through the gig economy, freelancing, or crypto, they wouldn’t understand what you’re talking about and would probably just ask you to leave.”
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