Mortgage advice? what to check? FTB

Soldato
Joined
25 Mar 2004
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Location
Fareham
Hi,

I am looking at buying a new build property, which will be ready approx 2nd quarter 2013.

The price of the property after discounts is £153k.

I have a deposit of 40% after saving for the last few years, so an LTV of 60%.

I've spoken to a mortgage broker, and the best deal they can get me at the moment is this:

  • 2.69% fixed for 2 years.
  • £999 arrangement fee.
  • Early exit fee of 3% of the balance before 31/12/2014. After then 0 exit fee.
  • Max overpayment of 10% a year.
  • 25 Year term.

This seems like a decent deal, I've shopped around a bit and I may be able to do a little better (1.99% with Tesco for example).

I think I would have a lot more headaches than letting the broker deal with it, and as it's a new build the mortgage will elapse before the house is ready.

This broker was recommended to me by the Developer (Taylor Wimpey) as they are used to this happening, and can handle it on my behalf.

Taylor Wimpey will pay £1k towards my legal fees if I use their solicitors (Coffin Mew).

Question 1).

Do you guys think this is worth taking up? Calculated that it would be £425 p/m over the term of the mortgage, and I will easily be able to afford this with bills on top and general living.

I should even be able to save a bit each month so I could overpay.

Question 2).

What should I check and double check before applying? I don't want to be rejected. These are all the things I can think of:

  • I'm on the electoral roll at this address.
  • I don't have a passport.
  • I have a 1k Limit CC with Tesco that is set to take Max payments by DD every month.
  • I have no other outstanding debt.
  • I have just sent my drivers license off to the DVLA and my car registration form to get the correct address put on them (was my parents).
  • I don't have any other monthly outgoings other than the cost to run my car/insure it/tax it.
  • I did check my credit report with Noddle a while back and it said I had no red markers, and my credit score was "OK", 3/5 of whatever they mark it on. I haven't checked it recently, don't want checking it too much to go against my credit score.
  • I've changed my bank statements to go to my home address rather than on-line only. I will ask them to send me one anyway as I understand this will be needed as proof of identity.
  • I've got a solid job. I've had full time employment for 6 years and am earning enough to cover the cost of the mortgage + living expenses. Work can prove my earnings if needed.

Can't think of anything else.
 
Associate
Joined
18 Jul 2007
Posts
695
I would go and speak to a mortgage advisor at HSBC. They have great rates for good customers and with no debt and 60% Ltv they will hopefully offer a good deal. I onto say this as they are the only mortgages that independent brokers cannot access.
 
Soldato
Joined
18 Oct 2002
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3,299
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Birmingham
If you tell them you've found a better rate elsewhere (and can back this up) you can usually get them to drop the product fee immediately to keep your custom or at least significantly reduce it.
 
Permabanned
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Location
UK
Sounds like you're in the perfect position to buy. Go for it!

FYI - from my recent experience with TW, you should try and negotiate for things to be included in your deal, e.g. white goods, flooring, turf, etc. It's pretty common to assume a house comes with a floor, but it doesn't.
 
Soldato
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3,414
What's the rate after 2 years, do you plan to re-mortgage then? If so then you need to factor the arrangement fee into your interest. before you compare to say a 5 year fix, or a tracker, etc.
 
Associate
Joined
16 Jan 2011
Posts
418
60% LTV is a really good place to be.

So you are only looking to mortgage about £92k ? thats not bad, sounds like you are buying a new build too, sounds like its working out nicely.

Its worth looking at the Tesco one imho, if only to make sure this deal is that best you can get right now.

Just had a poke about and found these:
Chelsea Building Society have a fixed, 2 years @ 2.34%
HSBC & Yorkshire Building Society both have a fixed, 2 years @ 2.39%

ING Direct, Chelsea, Cumberland Building Society, Yorkshire BS, Norwich & Peterborough BS, West Bromwich BS & First Direct all have trackers at 2.69 or under, some fixed for 2 years.. one of them is 3 years.. the First Direct one is for the entire 25 years.

You can always look to re-fix after the discount term, but keep in mind the arrangement fees, will get expensive if you keep on switching every few years.

If you can afford it I'd definitely over pay as much as you can. Maybe wait 6 months until you've settled in and know your finances as a home owner a bit better.
 
Associate
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30 Oct 2011
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Loughborough
Yo I'm buying a house ATM hopefully move next month. Mortgage brokers are a joke go to HSBC or nationwide and get a mortgage.

Shop around for solicitors and make sure you get ALL the charges. They will miss off hundreds off the quote sometimes. Highest quote was 1800 lowest 995 so it's worth it.
Well done for saving the deposit of that size !

1000 quid for arrangement fee is a lot mine was 400 for lifetime tracker HSBC advanced
 
Soldato
Joined
25 Sep 2006
Posts
14,106
Speak to Nationwide.

I was also a FTB buying a new build from Taylor Wimpey. I started my Mortgage application in February and whilst my rate was secured we just delayed submitting the application until nearer the completion, October/November.

It was fairly hassle free, let your solicitor deal with most of it.

Nationwide do fixed rates under 2.99% for five years for FTB, you may need to move your current account to them but worth it if you want security on your rate for 5 years. I think I was able to secure one of the last unlimited overpayment mortgages from them too. I'd recommend Nationwide.
 
Soldato
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RG8 9
Go to Tesco. Cheapest and you are in a great position. I would be bartering the cost of that house down to £150k as well. House prices are falling not going up so you could find it is worth less in 5 months time. New builds tend to hold their value less than an older more mature property.
 
Don
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41,170
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Notts
no was am I paying £999 fee on a 2 year deal, you can get a tracker at about those rates, rates probably won't go up in 2 years, get a longer tracker, best cas eyou keep the good rate longer, worse case you get out fater 2 years and prob break even
 
Soldato
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3,414
Brokers can normally offer better deals than going direct as most mortgage companies give them significant discounts that they do not offer direct.
 
Soldato
Joined
25 Mar 2004
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10,613
Location
Fareham
Thanks for all the replies everyone.

After the 2 year term at 2.69% the rates would go to std. variable rate of 4.24% (at today's interest rates).

Fixing for longer is a better idea perhaps? Thought it seems that fixing for longer also increases the interest rate somewhat proportionally.

I don't think I can really change the price of the house now that it's been agreed - that price is with a 12k Discount on the sticker price, and I also get a 4k "allowance" to spend on white goods/customisation.

I am anticipating that I should only need to look at flooring/blinds/curtains myself. The rest should be covered by the allowance more or less, this includes getting everything in the kitchen, upgrading most of the lighting to spotlights, amongst other things.

I do wish I'd asked for a little more at the time (a bigger allowance maybe, or closer to 150k on the price) - but for the freedom this will give me, and considering the building is also detached I don't feel I'm being ripped off or anything. I can quite comfortably afford the payments, and I don't plan to sell up any time soon.

The lender will need to value the property anyway, so they may come back and say it's not worth as much as I'm paying, but I would imagine that a house builder will be pricing the properties at a ball park figure that is fairly accurate based on experience in building/selling properties!

TW say I need to Exchange on the contracts sooner than later, the broker seems like the most sensible way to do it as it will allow them to work on my behalf, even if it means I don't necessarily get the best rates, as long as it's close there won't be too much in it for me.

I've spoken to a few companies now about Mortgages, Tesco was one, and HSBC was another. Tesco did not seem interested as the property was not yet built and they can't value it. HSBC flat out told me they wouldn't give me a mortgage for a property that was not ready within 6 months!

I could see about arranging a visit to my local HSBC branch though, I bank with them so I shouldn't have problems getting a mortgage through them if need be.

I've had bad experiences with Nationwide so I'm avoiding them, it's a shame, but when I was younger they would not give me a debit card as I'd "failed" their credit checks. I'd held an account with them for years and I was earning a little beer money in a part time job, so why they failed me I don't know. But if they failed me for that, god knows how I'd get a mortgage from them!

Funny thing is HSBC gave me a current account/debit card right away, and I've never ever been into my overdraft.

All advice welcome.
 
Last edited:
Man of Honour
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As you will have a relatively low mortgage you should try to seek out products with low arrangement/valuation fees (although obviously do the full calculations to work out the best deal). Paying a £999 fee on a loan of under £100k is a fairly hefty chunk and a 3.19% 3 year fix with NatWest (no fees) may work out better if you do the sums as the additional interest accrued could work out cheaper than the fee.

Tesco 1.99% deal seems the best to me right now, all things considered.

In terms of the lender attitude to new build I am a bit surprised, I bought a new build and getting approval from my lender wasn't a problem although I did need to redo it when it expired after 3 months or whatever. The fact you have 60% LTV should help I would have thought, one of the big issues with New builds is (was) people taking out 90%+ LTV mortgages which meant that they were effectively in negative equity from day 1 due to the market value being significantly lower than what they paid, this shouldn't happen with a 40% investment meaning the lender is a bit more secure.

As for using a broker I wouldn't bank on them busting a gut on your behalf, my first mortgage I went through a broker and it wasn't any easier really than arranging it myself second time around. A broker is by and large just a middleman dealing with many clients who will rush through the forms with much less care and attention than you would pay yourself when making probably your biggest ever purchase to date. If you think about it, spending over £150k SHOULD be a fairly complex and hassle-full experience.

Is it this you are going for (possibly 2+2 = 5!)? http://www.taylorwimpey.co.uk/newhomes/southern+counties/thenightingales/thehurley/
 
Last edited:
Associate
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New York
Fixing for longer is a better idea perhaps? Thought it seems that fixing for longer also increases the interest rate somewhat proportionally.

If you are fixing every two years and its costing £1000 each time that's like spending an extra £40 a month or to put it another way the effective rate on your mortgage over two years is close to 4%

so you should either find a deal with no fee or spread the fixing cost over a longer term there is also the risk that rates could be higher in two years time and you would end up paying more than if you fixed for 5 years initially
 
Soldato
Joined
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Posts
10,613
Location
Fareham
As you will have a relatively low mortgage you should try to seek out products with low arrangement/valuation fees (although obviously do the full calculations to work out the best deal). Paying a £999 fee on a loan of under £100k is a fairly hefty chunk and a 3.19% 3 year fix with NatWest (no fees) may work out better if you do the sums as the additional interest accrued could work out cheaper than the fee.

Tesco 1.99% deal seems the best to me right now, all things considered.

In terms of the lender attitude to new build I am a bit surprised, I bought a new build and getting approval from my lender wasn't a problem although I did need to redo it when it expired after 3 months or whatever. The fact you have 60% LTV should help I would have thought, one of the big issues with New builds is (was) people taking out 90%+ LTV mortgages which meant that they were effectively in negative equity from day 1 due to the market value being significantly lower than what they paid, this shouldn't happen with a 40% investment meaning the lender is a bit more secure.

As for using a broker I wouldn't bank on them busting a gut on your behalf, my first mortgage I went through a broker and it wasn't any easier really than arranging it myself second time around. A broker is by and large just a middleman dealing with many clients who will rush through the forms with much less care and attention than you would pay yourself when making probably your biggest ever purchase to date. If you think about it, spending over £150k SHOULD be a fairly complex and hassle-full experience.

Is it this you are going for (possibly 2+2 = 5!)? http://www.taylorwimpey.co.uk/newhomes/southern+counties/thenightingales/thehurley/

Yep that's the right one, well found :)

Did you exchange contracts with the lender before the 3 months was up, and then re-evaulate the interest rates after this expired? was this hassle free? any fees involved?

General theme here from people is suggesting I should look for lower arrangement fees or fixing longer term. I can shop around a little but maybe it's worth just settting up a meeting with my local HSBC branch who I bank with anyway, by all accounts they give pretty decent rates anyway. Good idea?
 
Soldato
Joined
7 Dec 2011
Posts
10,312
Usually the fee is simply added through the rate and therefore your whole massive loan incurs extra interest - you can only compare complete cost over the term to get an idea of what's best.
 

LiE

LiE

Soldato
Joined
2 Aug 2005
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23,310
Location
Milton Keynes
Yea look at the rates for a 0 fee mortgage. For example taking a slightly higher rate may mean paying more per month, but I'd be surprised it it was more than £1000 extra over 2 years.

If you want some great mortgage advice speak to new homes advice, they were great when I bought my new build TW house 5 years ago. I'm also in the process of remortgaging using them and they've been great. http://www.newhomesadvice.com/
 
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