Navigating the mortgage market can be a daunting task, so we spoke to financial experts to get advice that could make a big difference.
In an interview with Yahoo Finance Future Focus, Eirei Robinson, CEO of Enes Global Finance Brokers, offered advice for those seeking a mortgage.
Explore your options
Robinson stressed the importance of researching multiple financing options and having your paperwork ready before applying.
“Don’t just go to your bank,” Robinson advises. “It’s very easy to go to your bank and ask them what they can do for you, and that’s what 90% or maybe 80% of first-time property buyers do.”
He added that while this may seem convenient, it severely limits your options, with hundreds of lenders catering to first-time buyers, international buyers, high net worth individuals etc. “If you just talk to a bank, your chances of finding the right mortgage are reduced to around one in 500,” he said.
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Organize and assess the situation
“When you take out a mortgage in the UK, lenders have a binary decision-making process. Lenders will consider around 100 data points and you must meet at least 90 of these criteria, including factors such as age, income and down payment, so it’s important to have all your paperwork in order,” Robinson explained.
Robinson also spoke about the benefits of owning assets over holding cash: “It’s true that wealthy people buy real estate because it’s a good investment. It’s a safe place to park their assets,” he said.
He added that in the recent low-interest financial environment, it made sense to take out a mortgage and invest the cash in assets that were likely to generate higher returns, such as stocks and companies, but warned that interest rates and tax considerations change, so it’s essential to evaluate each situation individually.
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There are also alternative investment approaches to real estate.”[Enness Global has] “We have arranged loans secured by companies, liquid stocks, securities, cryptocurrencies and even unique assets like pedigree horses,” he added.
The Potential for Bitcoin-Backed Mortgages in the UK
Bitcoin-backed (BTC-USD) mortgages are already available in several other countries. “In the U.S., there are lenders that we know of that are already offering bitcoin-backed mortgages, and we’re tracking their progress to some extent,” Robinson said.
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“There are plenty of lenders offering bitcoin-backed loans, and major crypto companies such as Galaxy will also offer bitcoin-backed loans. There is an increasing number of private Swiss banks offering crypto-backed loans, and looking at the lending industry as a whole there are plenty of alternative and secondary lenders,” he added.
According to Robinson, bitcoin has several characteristics that make it an asset class that is both attractive to investors and a reliable collateral for loans. “Bitcoin is an asset class, and one of its fundamental characteristics is that it is stored securely on a public ledger, and everyone knows where it is, how it is owned, and how it has been moved,” he said.
Large financial institutions remain cautious about the cryptocurrency sector
But large lenders remain cautious about entering the cryptocurrency space.
“I had one very wealthy client, his assets were real estate and businesses, and he had two assets. One was Ethereum (ETH-USD), and the other was a holding in a Dutch adult video site. So the bank didn’t care about the porn site. What did care about was that he held cryptocurrency, and many lenders still view digital assets that way,” Robinson said.
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Asked if lenders were starting to embrace digital assets, Robinson said: “Lenders haven’t caught on as quickly as we would have liked. If you went to any major lender in the UK and said you make money from the gig economy, freelancing or cryptocurrency, they wouldn’t understand what you’re talking about and would probably tell you to walk away.”
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