Borrowing from a Building Society
When it comes to getting your mortgage, many people’s first port of call will be their local building society.Building Societies are often very welcoming to locals and many customers feel a close bond with their local branch and are very loyal towards them.Building societies do not have shareholders, which means that customers can become eligible to receive some of the organisations profits as well as having an opportunity to vote about the running of the company, which can lead customers to think they own part of the society.
Historically building societies have boasted being able to offer cheaper rates when it comes to mortgages and loans, which in some circumstances can be true.In terms of innovation it is quite surprising to find that building societies have been at the forefront of bringing out some of the most innovative and original products in the mortgage market.
One way or another building societies always have their members to answer to at the end of the day, so many see them as being a lot more responsible when it comes to who they will lend money too.
A lot of building societies do offer very competitive rates, so it is worthwhile popping into your local branch. However if you are using a search engine and you come across a product from a building society that looks good, there is the risk that you will not be eligible for it because you are not located near to the society.A lot of building societies will do mortgage deals only for people that are in the local area, which can make them very competitive, but only if you live close by.
Drawbacks of Building Societies
Before taking your mortgage out with your local society it is worth thinking about how long you plan to stay in the area, as some societies will only let you have their mortgages if you are in a certain postcode, so if you plan to upgrade or move out of the area you may have to pay a fee to get out of the mortgage.
Although it is nice to pop down the road into your local building society you must be careful that the society you choose isn’t too small.A lot of smaller building societies have been bought up lately and merged with larger ones. This could be good news if it means to receive some share of the profits, but could mean your local building society turns into something you did not expect.
There is also the risk that you think just because it is your local building society that you have saved in for years, it will give you the best rate when it comes to a mortgage.By just going to your local society it means you are not shopping around the whole of the market, so there could be a better deal out there that you are missing in order to stay loyal to your local society.
In order to keep up with market competition there is now very little difference between banks and building societies, but it is definitely worthwhile stopping off at your local one to see what it can offer you. It will normally be local, friendly and have good knowledge of the market you are buying in, so may just be able to offer you that something extra.
