To make a success of obtaining, or changing, a mortgage it's important to develop the same attitude as the lenders and brokers themselves. In particular, it's vital that you think of mortgages as 'products' - items that are bought and sold.

Seems odd, I know, but that's exactly how banks, lending houses and, increasingly, building societies think of mortgages - packages of money that are bought and sold.

Today, a lender 'buys' blocks of money in the market at the best price that it can (i.e. borrows at the lowest possible rate over base). It then 'sells' that money to customers (i.e. lends it out) at the highest possible rate that it can get. The difference is the profit that the lender makes.

As a happy shopper hardened in the white heat of the consumerist 21st century, your job is to buy at the best price you can. That means finding out who's offering what and when.

The 'when' is often as important as the 'who'

Fixed rate mortgages (more of these in a later post) are usually only available for relatively short periods of time because they relate to particular 'packets' of money negotiated by the lenders. Once the full amount is used up another 'packet' has to be negotiated, usually at a different rate to that which was on offer before.

A bit like buying potatoes really. When there are plenty around, prices are low, but at times of scarcity, prices rise. Often the best quality potatoes are in short supply; other times it's a good year and you can buy as many as you like. If you're a careful customer and know what to look for you can pick the best out of a poor bag. If you don't know, or don't care, you can end up buying a bag riddled with rot.

It's easy to pick up a relatively 'poor buy' mortgage, because lenders are keen to sell them at the high profit margins that they make, but the best buys usually take some looking for and when they come up you have to 'buy' quick.

To buy clever you'll need as much information as possible. Unfortunately, lending rates vary DAILY and with the hundreds of possible lenders available the task can seem an impossible one. Equally fortunately there are very simple ways round this problem and I'll be giving you masses of daily updated resources in future postings. However, before we get down to the nitty-gritty of individual products and rates we can take some much simpler decisions on how to structure our mortgage...

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