I need help! Choosing a mortgage and cutting through the numbers. Two mortgage offers, which to choo

Bromhead

Bromhead

Bromhead

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Hi GD I'm really hoping some people who have been here, done that can help me.

We recently put in an offer for our first home which has now been accepted. We had a mortgage promise from our Bank Lloyds TSB, but the financial advisor at the estate agents convinced us to listen to what offers they could put forward.

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Option 1 - Lloyds TSB

2 year fixed rate 5.19%, variable rate thereafter 2.99%.
No set up fee
Level 1 surveyor £250 / Level 2 surveyor £550
Solicitors fees £800

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Option 2 - Estate agent/Abbey

2 year fixed rate 4.49%, variable rate thereafter £4.74%.
£500 set up fee
Surveyor £229 (The estate agent did not advise what level survey this was for)
Solicitors fees £800

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So these are my two options. I can stick with an offer direct from my Bank or I can go through the independent adviser at the estate agents. The variable rate from the estate agent is quite high in comparison, but does this even matter or would you just switch to a new deal at the time.

In addition, should I be avoiding independent/estate agent financial advisers altogether and just stay direct with the Bank? Any help would really be very much appreciated.:confused:
 
Depends how much money you have just now and whether you can afford the upfront fees.

Usually I'd go for the lower rate for the fixed term then remortgage again.
 
I should also add, not including the house deposit we are putting down the exact amount we will be borrowing from a Bank is, £103,950.00.
 
Just saw the last part. IFAs can sell you any mortgages, banks can only sell you their own mortgages. If I wasn't already qualified to source my own mortgages I'd go for an adviser.
 
London and Country have been good (for advice) in the past for me. A few workmates have been quite pleased with them as well.
 
Neither look the best deals tbh, but work out the difference between the payments, multiply by 24 (2 years) and see if this is less than the £500 set up fee of Abbey.

If it is, the higher % Lloyds mortgage with no setup fee is better...maybe factor in £21 difference in surveyor fees too.
 
Whats your LTV %?

Out of the two I'd go with the banks one personally I think, do you need a level 2 surveyor?

If not, the £500 you save would I expect make up the difference between the two rates over a 2 year period.
 
Ukadder said:
Whats your LTV %?

Out of the two I'd go with the banks one personally I think, do you need a level 2 surveyor?

If not, the £500 you save would I expect make up the difference between the two rates over a 2 year period.
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LTV is 90%. Can someone explain how remortgaging works at that point. Just a case of revisting the adviser again in 2 years and confirming a new mortgage?
 
Bromhead said:
LTV is 90%. Can someone explain how remortgaging works at that point. Just a case of revisting the adviser again in 2 years and confirming a new mortgage?
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Basically, how much money are you putting forward towards the house, and how much of it will be the mortgage.

If your putting say 10K down and taking a mortgage for 90K you're LTV would be 90% etc. Makes all the difference in the mortgage deals you get. If you get get to about 85% LTV there is a good choice of mortgages.
 
I was genuinely surprised when we bought our first house in 2011 when the financial adviser from Redrow found us a far better deal than any we found ourselves. The second offer you have looks better even factoring in the fees.
 
DanTheMan said:
I was genuinely surprised when we bought our first house in 2011 when the financial adviser from Redrow found us a far better deal than any we found ourselves. The second offer you have looks better even factoring in the fees.
Click to expand...

They have access to specific programs that they can get deals that makes it easier to find deals.
 
Ok, let me throw out all of my concerns about going with the independent adviser so you can crush those concerns and I can make a better decision :p

1. My main concern is that although they are getting us a slightly better deal, this will be with Abbey who I have never dealt with before. I've always been with Lloyds TSB and they've always looked after me. If something goes wrong, my worry is that Abbey won't put it right.

2. Second concern is obviously the variable rate that they have quoted after the fixed term. No one can predict what the variable rate will be in 2 years time, but it seems significantly higher than what Lloyds have quoted.

3. Re-mortgaging, I'll be honest I have no information about this whatsoever. How easy is it to do, what does the process actually involve. Is it a pain to do, or simple and easy?

4. The estate agent want us to pay upfront fees now for this mortgage... would they want upfront fees again for re-mortgaging?
 
Bromhead said:
Ok, let me throw out all of my concerns about going with the independent adviser so you can crush those concerns and I can make a better decision :p

1. Banks is a bank imo, They would treat you the same. I would not use it as a reason not to go with anyone.

2. No one can predict it, but you're always going to be on a higher rate after the fixed term with option 2. If the interest rates go up by 1% both of your variable rates will go up by 1% with it.

3. Never done it, I expect it's the same process of taking out a mortgage. You will have to pay exit fees to get out of whatever mortgage you are with at the time.

4. Yes, some let you have a smaller amount of fees and lump the rest of the fees in with your mortgage deal.
Click to expand...
 
Yes adder, your point on number 2. about it always being higher is my main concern. I know we can't predict rates, but it would always be higher unless I remortgaged... which I'm not sure about.
 
Go with whoever is the cheapest. Throw loyalty out of the window and ignore the variable rates quoted as they mean nothing.

Once you are out of the fixed period you will likely want to move the mortgage anyway. The Lloyds variable rate is made up anyway as if it was real, you whould be able to get a mortgage at 2.99 with them anyway, which you cannot.

Yorshire BS are doing a 4.39% fixed till 31/03/2015 with no fee's for first time buyers.
 
Personally I think you'd be mad to not look at the HSBC deal I linked to, it's better than both options I think.

I'd also say however, you'd be mad not to check what's going on with mortgage rates when your fixed term ends, remember your LTV rate will change as you pay off your mortgage opening up better deals. Obviously you need to take into account the fees you'll have to pay to re-mortgage/end your current deal but for the potential savings it should be looked at.
 
Yes looking at the HSBC deal, it does seem to trump the two offers that are currently on the table.

Regarding re-mortgaging... can someone give me some insight on this. Would I re-mortgage immediately once the fixed rate has ended and what is the actual process?
 
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