Mortgage advice? what to check? FTB

[PistolPete]

£999 arrangement fee, really?
Pay slightly more on the rate and get a 0% fee

I'd look at that over the costs over 2 years. If you end up paying back more then £45 /month for the first 2 years then you've shot yourself in the foot.

We ended up saving by paying a £999 fee and paying £68 /month less due to the better interest rate on that product so 20 months in we've actually paid the £999 and saved ourselves £361 over what our £0 fee would have cost us and that figure will only keep rising.

 

[pull2808]

The good thing about HSBC tracker rates on the lifetime tracker is that the rate is calculated at Base + % (based on LTV etc), some of the other mortgages on trackers relate to the lenders SVR which they can change.

The base + % from HSBC means the only increase you'll get is dependant on interest rates in general, which given the current climate, aren't going to shoot up very quickly.

 

[Mercenary Keyboard Warrior]

Its simples, the more your borrowing the less the ratio of fixed fee to loan and hence the more important the rate is compared to the fee.

There is no magic point where the cross over point meets as it varys from individual to individual on the loan amount there are taking and the length of the fix and the difference in rate achievable.

Don't forget if you don't pay a £1k fee then in theory you borrow £1k less as you must have had the money to pay the fee. Sometimes you can add the fee to the mortgage.

Pretty simple to run your own specific circumstances through an online mortgage calculator to see what the costs are for each option.

 

[shoes]

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.

I bought one earlier this year and no bank could beat my mortgage broker?

 

[londonbairn]

Depends on what products are available at the time and your circumstances. During 2010, the best offers in my situation (flawless credit rating, high deposit) were direct. No all of the market broker could get anywhere near.

Equally someone who has a complicated income stream, poorer rating etc may fare better through a broker.

Only thing I would say for new builds is to bear in mind you are probably paying a premium for the property as it is new (check other property sold prices in the area as a rough proxy) and I am not 100% sure I would personally use their conveyancer.

 

[HangTime]

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?

Can't really compare my situation in terms of interest rate when it came to the new build as I was simply transferring an existing mortgage rather than taking out a new one - in theory anyway - in practice it seemed to effectively be a new application, but everything else was the same (amount, term, interest rate, no fees etc) even though that product no longer existed. But yes we had exchanged contracts before it expired, I wouldn't call it hassle free as it involved filling out forms AGAIN and then when we finally completed there was some weird overlap thing where we effectively ended up having to make two payments (or maybe a single large payment, I forget) the month we moved (December so hard up families would have found it tough but fortunately I have cash set aside for emergencies). As I say, probably not directly linked to your situation but from the builder's perspective their priority will be getting you to sign the deal with a mortgage approval in place even if there is a risk it could expire.

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?

I would shop around online first before speaking to any specific lender as if they aren't competitive it will be either a waste or time, or you'll be short changing yourself. If you go into the branch just assuming they will give a decent rate, you'll have nothing to compare it with and they'll be pressuring you progress to the next stage, so you may be tempted to just take the easy option and sign up there and then. Likewise even in the unlikely event they are able to negotiate (on the arrangement fee for example) you will need some ammunition to throw at them, if you walk in 'naked' then you don't have a strong bargaining position.

Key advice I have when making life-changing purchases/decisions is don't be scared of hassle, embrace it - unless of course you have a hectic life with so many other serious problems (illness, family etc) that something being hassle-free has massive value to you.

 

[Basher]

That rate depresses me. I fixed at 6.19%

 

[HangTime]

All relative to the date you fixed, fees paid and LTV. A fix at a rate that seems high may not necessarily be that bad a deal if it had low fees, high LTV (so ALL products would have been expensive) etc. Also depending on how long ago it was house prices may have been lower so you had to borrow less money.

I guess I've been fairly good/lucky at picking mortgage types as I fixed before base rate rose by 1.5%, then I switched to a +0.59% tracker before rates dropped by 5% (so for the past few years I've had a mortgage that is considerably cheaper than return on cash investments, meaning no point in overpayments)

 

[~Divine~Wind~]

Pop yer head over to MSE mate.
I'm sure there were recently sub 2% deals for deposits such as yours.

 

[HungryHippos]

Thanks for the continued advice everyone, I've called the broker I spoke to previously and asked about mortgages with lower/no arrangement fees, longer fixed terms (3 years), and of course they will have slightly higher interest rates as well.

Will see what they come up with. I will do a bit of on-line shopping as well, good advice to get a feel for the market and what I should expect for my LTV ratio.

I've also booked an appointment with HSBC for next week to go in and have a chat with them about it all, I doubt I will sign up for anything there and then, I would rather take a little time to mull over any offers I get before agreeing to anything.

I don't mind a bit of hassle but don't want too much, the easy way out usually does cost a little more. If it's a difference of a few £ a month I won't mind too much.

I will also speak to another broker as well as I don't want to keep all my eggs in one basket, see how they compare.

I understand to get a mortgage you need house insurance as well, can anyone give me any specifics on what I need for this precisely? I don't want someone flogging me some expensive insurance on top of a mortgage if I can get the same for less elsewhere.

 

[Mercenary Keyboard Warrior]

Most mortgage lenders will allow you to switch house insurance to one thats as good as theirs. They may charge a nominal amount to "vet" the contract.

Its sometimes easier to take theirs from day one and opt out later

 

[FerretBoy]

As long as the value of the house is insured then they are normally fine, I don't believe it has to include contents.

Also I would personally avoid anything else they say I have to have, like life insurance, employment insurance. You should not have to have it. If you feel you personally require it then check what is available on the market.

It is often slightly simpler to get the house insurance with your mortgage provider for the first year as I found it really hard to insure with other companies for the period between exchange and moving in.

 

[londonbairn]

Thanks for the continued advice everyone, I've called the broker I spoke to previously and asked about mortgages with lower/no arrangement fees, longer fixed terms (3 years), and of course they will have slightly higher interest rates as well.

Will see what they come up with. I will do a bit of on-line shopping as well, good advice to get a feel for the market and what I should expect for my LTV ratio.

I've also booked an appointment with HSBC for next week to go in and have a chat with them about it all, I doubt I will sign up for anything there and then, I would rather take a little time to mull over any offers I get before agreeing to anything.

I don't mind a bit of hassle but don't want too much, the easy way out usually does cost a little more. If it's a difference of a few £ a month I won't mind too much.

I will also speak to another broker as well as I don't want to keep all my eggs in one basket, see how they compare.

I understand to get a mortgage you need house insurance as well, can anyone give me any specifics on what I need for this precisely? I don't want someone flogging me some expensive insurance on top of a mortgage if I can get the same for less elsewhere.

Sounds sensible, shop around, it's also useful to build scenarios and an amortisation schedule to understand your exposure, vs saving etc.

Currently going through it at the moment as I am about to renew product.

 

[swillsy]

Yeah one word of advice over the 2 year fixed rates because the banks were very pushy about them. The rates are very good however you'll pay an arrangement fee and then need to pay another in a couple of years when the deal runs out and you go onto a high SVR. 2 years isn't a long time at all!

 

[HungryHippos]

When I spoke to HSBC on the phone the other day they quoted me these prices, haven't any other specifics on them but I can do some maths when I go and see them next week.

Based on 60% LTV. Arrangement fees are in the brackets if applicable:

2 year fixed - 2.39% (1499)
2 year fixed - 2.79% (599)
3 year fixed - 2.79% (999)
5 year fixed - 3.29% (499)
5 year fixed - 3.49%

 

[Amleto]

if you want a mortgage, then do go in and shout FTB - **** the bank??

 

[BennyC]

When I spoke to HSBC on the phone the other day they quoted me these prices, haven't any other specifics on them but I can do some maths when I go and see them next week.

Based on 60% LTV. Arrangement fees are in the brackets if applicable:

2 year fixed - 2.39% (1499)
2 year fixed - 2.79% (599)
3 year fixed - 2.79% (999)
5 year fixed - 3.29% (499)
5 year fixed - 3.49%

If you can put your sour grapes over Nationwide aside you might find you could get a better deal. More specifically the Flexclusive 4 year fixed deals.

I would also strongly recommend asking to speak to the site manager and asking if he can put you in touch with the spark. If your TW site are anything like mine they'll be wanting £50 a piece for halogen spotlights.

Speak to the spark, behind the sales team, give him plans for your lighting so he can do a first fix. Supply the fittings & units (I'd recommend LED - the initial outlay is more but will still be cheaper than what you were prepared to pay for halogen and will give you significantly lower bills) yourself and have him come and fit them once you've completed and moved in.

That's what I did and I saved a fortune (under £20 per light fitted with a decent LED bulb), down lights, power & light to garage, shaver sockets, TV points etc.

Of course if your site aren't as lax as mine then there's not much you can do.

 

[HangTime]

I understand to get a mortgage you need house insurance as well, can anyone give me any specifics on what I need for this precisely? I don't want someone flogging me some expensive insurance on top of a mortgage if I can get the same for less elsewhere.

Just follow the normal MSE guide for home insurance (basically using comparison sites plus a couple of extras). However be warned that many insurers won't let you get a quote for a policy start date more than 30 days in the future (some 90 days) so you could be jumping the gun a bit.
[This reminds me I need to get some quotes!]

In terms of getting flogged expensive insurance the key thing to watch out for is more likely to be life/disability/income protection insurance. Especially when going via a broker, they will probably try and push you down that road to try and get some commission. Home insurance is mandatory, you definitely need that, but personal insurance is entirely optional and if you do decide you want it again make sure you shop around.

 

[HungryHippos]

I would also strongly recommend asking to speak to the site manager and asking if he can put you in touch with the spark. If your TW site are anything like mine they'll be wanting £50 a piece for halogen spotlights.

Speak to the spark, behind the sales team, give him plans for your lighting so he can do a first fix. Supply the fittings & units (I'd recommend LED - the initial outlay is more but will still be cheaper than what you were prepared to pay for halogen and will give you significantly lower bills) yourself and have him come and fit them once you've completed and moved in.

That's what I did and I saved a fortune (under £20 per light fitted with a decent LED bulb), down lights, power & light to garage, shaver sockets, TV points etc.

Of course if your site aren't as lax as mine then there's not much you can do.

Sounds interesting indeed - they charge £70 per spotlight in the development I'm on, everything is more expensive down south unfortunately.

I have an allowance I can spend on things before I have to cover extra costs myself, a good chunk of that would be going on spot lighting.

You can put LED bulbs into the spotlight slots though right? or does it need different sockets? I would need a lot of spotlights to be honest so LED may be the way to go as I would save a lot on electric bills.

I was reading the thread on the LED lights and they sound great for cheaper power usage, and also how long they last, but a lot of people said they also give a "cooler" temperature light, halogens give off a much warmer (more expensive) light.

Just follow the normal MSE guide for home insurance (basically using comparison sites plus a couple of extras). However be warned that many insurers won't let you get a quote for a policy start date more than 30 days in the future (some 90 days) so you could be jumping the gun a bit.
[This reminds me I need to get some quotes!]

In terms of getting flogged expensive insurance the key thing to watch out for is more likely to be life/disability/income protection insurance. Especially when going via a broker, they will probably try and push you down that road to try and get some commission. Home insurance is mandatory, you definitely need that, but personal insurance is entirely optional and if you do decide you want it again make sure you shop around.

Sounds like it will be easier to go with the Mortgage peoples house insurance first off, and switch after a year or so then. Does this include contents insurance or is that a totally separate thing altogether?

Not sure what to think about other types of insurance to be honest, I'd be the sole dependent on the mortgage so I would perhaps feel safer with some cover in case I couldn't work for any reason and still needed to pay the mortgage payments. Work would probably cover me for a little bit in this event but not forever.

 

[Django x2]

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.

Just "eh?" at this post....