Any Mortgage advisors amongst you?

[Vanda]

Im bleedin' confused!!!!
HELP!!!
I have %%%%%%%% flashing before my eyes and I want to know at least a little before my meeting!

[rob]

what isthe question. Need more info if we are to help

[Vanda]

Okay, I'm a first time buyer. Have no idea what to go for mortgage wise. Am putting down over 10% deposit but nothing seems to tell you what the drawbacks to certain mortgages are, just the advantages.
Looking at maybe a discount or capped rate, does anyone know if these are any good or should I avoid them?

[rob]

Vanda, as a public sector worker are you a member of UNISON or are you a member of the NUT.

If UNISON then it may be worth checking out the Britannia Building Society - they do a fixed rate that is fixed for 10 years. Its a pretty good rate as well as you get extra discount being in the union.

I have managed to reduce my mortgage from 23 years to a state where I can pay it in 6 - 8 years (even if rates go up - which they must do soon)


Personally I prefer the long period fixed rates. The bonus with the Britannia one is that I found a loop hole (well there a suprise). You get penalised if you make capital repayments, BUT if you make an extra payment of £499.99 per calender month then there is no penalty.


Have a look at these sites, I find them very usefull

http://www.thisismoney.com/index.asp

http://news.ft.com/yourmoney

[Vanda]

Thanks Rob, you're a star. NUT member myself but I never even thought I may be able to get discount through union membership. Will check out the sites, thanks.

[rob]

you're more than welcome as it filled 30 seconds for me while I am sat here at work all night.

Its my own fault. I had some jobs to do that were meant to take 5 hours - I did then in 75 minutes. Now I just have to hang around until the next job which isnt scheduled until 04:00 (and I cant move it either)

[rob]

just came across this news article about posible inflation rise

http://www.thisismoney.com/20030827/nm67002_s.html

would make even more sense if this is the case to go long term fixed Vanda

[Derek]

you can get cheap discounted rates by moving it about everywhere every few years if you have time for that.

i don't so have just moved my mortgage from bradford and bingley who gave me a 2.2% discount and £500 cash back for first 2 years. i have been paying the standard rate for the last year due to the fact that i wasn't sure where to move it to and whether to move onto straight repayment as my mortgage was interest only and an ISA plan - plus i kept meaning to move it and never got round to it bradford and bingley did offer me another discount scheme after the 2yrs but there were redemption penalties involved so i didn't take their offer.

it's now days away from being with intelligent finance (www.if.com). here i have reduced the remaining term from 22years to 20 years, paying less a month and have received a surrender value on my ISA of nearly £2500 which has gone straight into the bank - ISA performance has been worrying due to the shares market so i have cut my losses

rate at IF is 4.59% discounted to 2.99% for first 3 months. it is very flexible with overpayments and payment holidays etc..

best bit is the offset idea. you can choose to lump all your money together so if you want a loan the interest is 4.59%, credit card at 4.59% or you can choose to earn 4.59% (tax free) on your savings or not receive interest on your savings and allow if to pay your mortgage earlier.

my mortgage is only £49500 as i paid a 10% deposit too - plus nice low scottish house prices and between savings and screwing credit card companies with their 0% balance transfer offers i will just be paying interest on £23500 of my mortgage

this means instead of paying £315 a month i will be effectively paying £149. i will keep the payments at £315 so the £166 overpayment every month will go a long way to paying my mortgage off earlier.

ideal world with my next car would be an interest free offer so i dont need to use my savings

hope that wasn't too confusing

[Vanda]

Brilliant guys, really thanks a lot both of you.

[rob]

Derek, I have a nice handy spreadsheet that lets you calculate you mortgage and the effects of overpayments. You wont belive how much a few quid extra now will save you in the long term.

I can send it to you if you like.

[lastvts]

Best advice I could give you is listen to the likes of Derek and Rob they seem to be on the right wavelength. When I got my first mortgage I quickly realised that financial advisors are not so independent and can not be trusted. Don’t fall in to the trap of signing up for all those insurance policies they will try and sell you either. Unless your personal situation makes you feel you are a special case.

The bigger the deposit the better. I put 25% down, but that was when house prices were a little cheaper. Some mortgages will charge higher interest rates if the deposit you put down isn't a decent percentage of the house valuation/ price.

I am currently doing similar to Derek. I have a flexible mortgage with Direct line, which is discounted for 6 months and goes up to 4.7 thereafter. It has a tie in period of 3 years. (Make sure whatever mortgage you go for. That it doesn’t have much of a tie in period or redemption penalties.) I also have a couple of 0% credit card which I have moved half my mortgage into for six months. After six months I will either get another credit card with 0% or take money out of the mortgage to pay it off. Although it seems a hassle doing this it only takes 10 -20 minutes to set up these credit card accounts and I will be saving about £250 over six months from doing this.

As far as capped or discounted rates are concerned. I have found that mortgage companies will offer fixed rates before interest rates drop and reduced rates when they are going to go up. Hence I have learnt to go for the opposite to what they are trying to sell. It may be better to get a capped or fixed rate mortgage just for peace of mind If your personal finances will not accommodate for much of an interest rate rise though. At the end of the day like Rob says. Paying overpayments will really reduce the cost of your mortgage.

A mortgage is part of your life that’s why I think it is better to get a good flexible one. The other good thing about flexible mortgages is that after a while you can take lump sums of money out to buy cars and thing. It's also handy for rainy days!

[TheMinel]

I have gone for a 2 years fixed one. With the rates being so low, you can't go wrong with a fixed, and actually I would suggest to get the longest fixed period you can find.....
I chose a fixed one because I like being in control of my outgoings and so I can budget easily knowing how much the mortgage will be each month.
Also I would advise for a repayement mortgage instead of interest only or even worse endowement ones.........

[col]

Derek, I have a nice handy spreadsheet that lets you calculate you mortgage and the effects of overpayments. You wont belive how much a few quid extra now will save you in the long term.

I can send it to you if you like.

Hi Rob

Can you send me that spreadsheet too please. Planning on an extension so will be remortgaging soon

Thanks

[Pauline]

Yep, we've got a flexible mortgage too and it's fantastic. WE pay our credit cards off every month now - rather than 12% or why on the credit card, just whack it on the mortgage at 4%.

And how else did we afford 2 new cars and a bike

As people have said, watch out for redemption penalties - especially ones that go beyond the term of the mortgage.

I'd fix for as many years as you think is OK right now (although we're on variable!!!) as the rates very low and, as Rob's said, has probably hit rock bottom.

Direct Line/Virgin etc are the same bunch - we're with Virgin.

Also, try the Tescos website as they do mortgages and you can look around at the deals.

WE never used a mortgage advisor - just went to Tescos, typed in a few figures and away you go. We applied with Virgin on line - le me know if you want to go with them, as we have a voucher for £125 if we recommend someone - that's £125 for you and £125 for me!!

Also, avoid endowment!!!!!!! I got stung on that one years ago, ended up with a policy £20k short of my mortgage

And sort out your own insurance - we went with Tescos for life insurance and it was half the price of the "recommended" one so saves us £120 a year, which we just pay off the mortgage.

Good luck Vanda!

[Derek]

Derek, I have a nice handy spreadsheet that lets you calculate you mortgage and the effects of overpayments. You wont belive how much a few quid extra now will save you in the long term.

I can send it to you if you like.

please send rob destscot99@aol.com


also as lastvts says financial advisors can actually cost you and can't always be trusted. the financial advisor i got was from bradford and bingley but they are independent.

he sold me an income protection policy. can't remember how much it was but was over £20 a month. after reading through it closer i cancelled it before it actually came into effect - he was on big commission.

that's the same advisor that advised me to take out an ISA mortgage. i wasn't sure and was keen on straight repayment but ended up going with the ISA mortgage. that's what i have just cut my losses on 3 years later and surrendered it - it's not flexible, 25yr fixed term and already i had a warning in january to say that it may not pay out enough to cover my mortgage.

for the ISA policy the financial advisor got ............ £46.53 a month for 24 months and £2.13 a month until the end of the plan - 25years. that means he got over £1000 for the first two years for advising me to take it out - easy money for a few hours work :rolleyes:

luckily enough Legal & General seem to foot the cost of this as i didn't lose that much.