Navigating the mortgage market can be daunting – we spoke to a financial expert to get some tips that could make all the difference.
In an interview with Yahoo Finance Future Focus, Islay Robinson, CEO of financial brokers Enness Global, offered guidance for those looking for a mortgage.
Explore your options
Robinson stressed the importance of exploring multiple loan options and being well prepared with documentation before any application.
“Don’t just talk to your own bank,” Robinson advised. “It’s very easy to go to your bank and ask them what they can do for you. That’s what 90% or about 80% of people do when they buy their first property.”
He added that while this may 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. “If you only go to 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 organized and assess your situation
“To get a mortgage in the UK, lenders operate on a binary decision-making process. They take into account around 100 data points and you need to meet at least 90 of these criteria, which include factors such as age, income and deposit. Therefore, it is essential to have all the documentation and paperwork in order,” Robinson explained.
Robinson also addressed the benefits of owning assets rather than holding cash. “Rich 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-yielding assets such as stocks or companies. However, he cautioned that with changing interest rates and tax considerations, it is essential to assess each situation individually.
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There are also investment alternatives in the real estate sector. “Enness Global has arranged loans with companies as collateral, liquid stocks, securities, cryptocurrencies and even unique assets such as thoroughbred cattle,” he added.
The potential of bitcoin-backed mortgages in the UK
Bitcoin-backed mortgages (BTC-USD) are already available in other countries. “There is one lender in the US that already has bitcoin-backed mortgages, which we are familiar with. We have been following their progress,” Robinson said.
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“There are a lot of lenders that will lend against bitcoin, some of the big crypto houses like Galaxy and others will lend against bitcoin. There are a growing number of Swiss private banks that will lend against crypto, and there are a lot of alternative or secondary lenders that will do that as well, so if you look at the whole lending landscape,” he added.
According to Robinson, Bitcoin has several qualities that make it an attractive asset class for investors and reliable as collateral for loans. “Bitcoin is an asset class and one of its underlying characteristics is that it is secure on a public ledger, everyone knows where it is, who owns it and how it has moved,” he said.
Traditional lenders remain cautious about the cryptocurrency sector
However, traditional lenders are still cautious about gaining exposure to the cryptocurrency sector.
Robinson said: “There was a very wealthy client and his assets were property and businesses and he had two things. One was in ethereum (ETH-USD) and the other was a stake in a Dutch adult video website. So the bank didn’t have a problem with the porn website. They had a problem with him having some cryptocurrencies, and that’s how a lot of lenders still view digital assets.”
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Asked whether lenders are starting to embrace digital assets, Robinson said: “Lenders aren’t catching up as quickly as you might think. If you went to a traditional lender in the UK and said you make your money through the gig economy, freelancing or cryptocurrencies, they wouldn’t understand what you were talking about and would probably ask you to leave.”
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(tags to translate)Islay Robinson
