Thetownend.com

Wisdom of the TEF...need some help

This might seem like a silly question to some of you but where is the best place to obtain free mortgage advice?

Banks are an obvious one but there seem to be loads of independent advisors/services out there and quite honestly, I haven't a clue where to start or where to obtain the best information.  I've done all the online questionnaires, calculators etc, but its not specific enough.  

Its not actually for buying in Swindon but not sure if that makes a difference?

Castles do it for free... i didn't have to even look at houses or even discuss the actual buying bit.

An independent adviser. Banks can only sell to you from their own product range, which may not be the best available on the market or the most suitable for your needs.

You can find an adviser at http://www.unbiased.co.uk/

Thx - just want someone decent and professional, not a kid straight out of college ideally.

A kid straight out of college is unlikely to be qualified to give you mortgage advice.

Be aware that if you're taking on a mortgage, you might want to look at life cover, critical illness cover and income protection too. If you go to an IFA they'll be able to sort the whole shebang, including the mortgage.

You know what I mean - basically want someone with some serious experience!

Cheers for the tip though - is an IFA free or is it a service that commands a fee?

To truly be an IFA, they have to be a fee charging firm (it'll be set out in their terms of business).

In reality, for fairly simple financial planning like you're after, most IFA's will be happy to not charge a fee and just take the commission from the product provider.

Cool - I did search for the commission option as opposed to fee so will see what that comes up with!

PM me your email add, i have a finacial advisor who is exellent, knows his stuff and is a town fan :D

You wont get a mortgage without the majority of that anyway.
My advice Luci is to go into the building society's and ask them if you can have a chat with the advisor/,most will only be to pleased to answer any questions you have free of charge,you may get a polite refusal from some,but most will answer the questions that are worrying you,even if they know that you will not be getting a mortgage with them.
Probably mean an appointment and them giving you the hard sell,but at least you will get the advice,asking costs nothing.

Good luck with it and your impending move.

Whenever I've seen a mortgage broker, asking them how their earn their fee is always one of the first questions I've asked.  Important to understand the broker's/adviser's incentives from the outset.

And isn't Phil_S in that line of work?

You'd be surprised. A lot don't even insist on proving you have valid building insurance anymore.

Speaking to an adviser in a bank/building society is an option, but they'll only have been trained to provide advice on the range of (very limited) products that they sell.

did you get my email :hmmm:

1. Luci if your the same lass I helped with the horse claim PM me and I'll put your in touch with the firm that handle all moneyfor my firm.

2. Don't bother with critical illness cover and income protection complete and utter waste of money the amount of clauses in the insurance policy is amazing. If the insusers employ a decent claims handler (like me) then they can wriggle out of most claims, trust me. However I would point out its not what I do but I have given insurance contract/law advice to claims handlers who do work in that field.

Thanks all!

GFM - Sadly, I don't own a horse, thats the other Lucy  :D

Well, then I would point out that critical illness and income protection is "what I do" and any reputable insurer would never purposefully look to decline a valid claim.

Personally I wouldn't be without that cover. Heaven forbid not having it and then getting struck down with an illness which meant I could never work another day in my life.

Decent insurers payout rates are well into the 90s, and they have to include all sorts of daft things in the declines column for those figures (people claiming on Policies that don't exist, downright lies etc)

I suggest that if you've seen a few bad cases GFM, you have an overly cynical view of the entire market.

My dad had cover and the mortgage got paid whilst he was ill and paid off when he died. So definitely something to think about

my experience of financial advisors is that they are all in it for their own personal gain.
use your own common sense when dealing with them and see more than one.

Well, somebody works for a financial services company...

Same advice for any salesmen of any proffesion

Those are the 3 things that will be advised / offered when you apply. Check with your employer what you are covered for...i.e. you may have life cover and some sort of critical illnes/long term sick leave cover.

Generally, if you're in a company pension scheme there is usually life cover as part of the package - It probably won't cover the full value of a mortgage though

I bow down clearly you have considerable insurance claims experince and knowledge of insusrance/contract law.


Couldn't agree more!

Well, you were telling people that some forms of protection were not worthwhile by making statements that were untrue. I'm just trying to give a balanced view. Like Nemo already pointed out, over 90% of claims are paid.

Hi Luci,

Rather than heading into a bank, where as stated before you will likely receive limited advise or offers, I would actually advice you to head into an estate agents and ask it they have their own broker or an affiliation with a specific IFA.  Many 'all of the market' brokers and IFA's link up with reputable estate agents and this link often allows them to provide free advice, of the kind you sound like you need, because they have a stream of leads generated for them to afford this luxury.

Some good questions to consider are:  Mortgages - Do they offer all of the market advice?  If not, bear in mind deals with companies such as First Direct will not be included in their search and may be better priced.  Insurance - Do they offer lifestyle insurance advice or solely mortgage life cover? An IFA worth his commission will be able to advise you what is best for YOU, not just what is best to satisfy your bank. Payment Protection - be cautious! You may feel that your job is secure and you dont need it, but unless you have a rich and generous spouse or family, I would suggest it's worth considering as you never know what may happen tomorrow thats out of your control, and so will most reputable IFA's.

Cheers - I get a really good benefits package from my employer so def worth thinknig about - thanks!

Like everyone else, I'd suggest talking to an IFA, but also do a bit of your own research. Once you've got an idea about what type of mortgage is right for you (ie repayment, fixed rate, discounted etc) have a browse on comparison websites as many mortgages are not available through IFAs, only direct applications - HSBC & First Direct are good examples but there are others too. Moneysupermarket.com and the like offer quite a good comparison of what you will end up paying and you may find better deals than an IFA can - if you're unsure, run the deal past your IFA, he may be reluctant to do it, but if it really is a better deal, he should be able to confirm it

Yes I am,

If you want to PM me with an e-mail address I can e-mail you information that will help. The FSA website is a good source & I've put together extracts that I let my clients have when applicable.

I work from the "Whole of Market" & don't charge a fee. The searches I do can include lenders "direct deals" too.

This is true, the same as anyone in a job is doing that for their own gain

I never took the option on PPI as I always thought my job was secure but when I re-mortgaged to extend the house the PPI was a sensible price to took it up.

3 months later I got made redundant and whilst the pay off allowed me to not panic the PPI I had certainly helped and kind of regret not getting it for the main mortgage.

Worth considering in my view...

I'm not an IFA but what I would say is if you go for a short term fixed or flexible then ask the IFA (or calculate it yourself) what the repayments will be if the interest rates go up by 4% and work out if you can still afford it.  My mortgage is frightening but fixed a deal for 20 years at 4.75% 8 years ago - I have lost out a little with the base rate being so low now but know that my repayments will not change until I have paid of 80% of it, at which point I should be able to pay off the outstanding amount if rates rocket.

There is a big difference between Income Protection & Mortgage Payment Protection. One is a long term thing designed to protect income long term. ie it can pay out for years. It's also underwritten individually so premium varies acording to age, job, how long it pays out, & for now sex.
Most Mortgage Payment Protection policies pay out for 1 or 2 years & are only underwritten on a claim. They are not neccesarily cheaper, but can cover redundancy too.

Luci I always use Swindon Property Group - they saved me around £300 a month when I re-mortgaged and they genuinely seemed to be able to offer mortgages from all the lenders out there....

They don't charge but take a fee/commission off the lender

Hi guys, as this seems to be an all-in-one mortgage advice thread I might as well ask in here rather than start a new thread.

I'm looking to move house and move up the property ladder and will obviously need a larger mortgage.  My question is thus:  If I were to rent out my current property (covering the mortgage payments on that), what is the deal with getting a second mortgage for the new house? 

I'm not a first time buyer, but I'm not re-mortgaging.  I've got a deposit for the second mortgage and essentially need a seperate loan for a second house, but will the debt from the first mortgage be a hinderence in this case in terms of the amount available to borrow and the rate at which I can borrow it?

I'll go to an IFA as well, but thought I'd ask here to understand my position a little better!

You will be restricted a little, unless you have a reasonable income that could easily afford both mortgages.

I know it's technically not a buy-to-let, but it's probably worth speaking to someone who knows about buy-to-let mortgages because they are essentially experts in second mortgages.

I think I am right in saying that you would need to move the mortgage on your first house to a Buy To Let mortgage product - because you would no longer be living in that house as your primary residence.  Someone will correct me, I'm sure, if that's wrong.

You haven't explained your reasons for wanting to go down that route (not that you need to!) but my initial reaction to what you're proposing it that it is does seem to be quite high risk.  Your investments are going to be highly leveraged (ie you will have borrowed money to pay for both houses), which effectively amplifies any gains or losses you will make on both houses.  As a stand alone investment decision, you would be putting all your eggs in to one basket (ie in to residential property) - which very much goes against the basic principle of reducing your overall investment risk by holding a balanced portfolio of investments.  If you're bullish about the property market, then fair play...and good luck.  I would just advise caution, though.

Just gone through all of this and it is likely you will need to move your 1st mortgage to BTL (its usually a requirement of a standard mortgage) in doing so the lender will take into account a portion of your rental income when considering borrowing on the 2nd property.  On the downside I found lenders require a significant amount of capital for a BTL and the interest rates I found were not great to say the least.

One solution is to ask your present lender to keep the property on the existing mortgage, which mine agreed to but only with some rationale that we were going to sell at a later date. 

In the end it was to much risk either way and a lot of lenders were twitchy or offering apalling BTL rates so we are waiting to sell up.

Hi guys, thanks all for the advice.

My rational is that if we're struggling to sell our house currently, and now is quite a good time to buy, then maybe rather than waiting for 6 months/year to sell our place (it's on the market and I'm reluctant to drop the price too much below what it's currently listed at) before then moving on a new place, renting out our current house while we're waiting for the buyers/housing market to pick up might be an option to consider.

Looks like it's pretty high risk for the lender, though, and as Dazzza says the rates aren't going to be great on a BTL mortgage, so perhaps it's not really that realistic. 

Hmph.

Any particular IFAs that you guys would reccommend in Swindon/Marlborough?

I'm playing devil's advocate here, but is there not a bit of a contradiction between this and this?  If now is such a great time to buy, why have you not been flooded with offers?

If the last few years have taught us anything, it's that second guessing any market (not just the housing market) is a mug's game.  Your houses may be worth 5% more in a year's time than they are now...or they may be worth 20% less.  No one knows.  Not trying to scare you, but if you're going to expose yourself to one market (residential property) to such a high degree - and financed by borrowing - you just need to be sure you'll be able to handle the consequences if the arse falls out of the market.  As you may have guessed, my own take is that the 'price of houses can only ever go up' era is over.

Couple of points :
Technically you are looking at a "Let to Buy". However, the first port of call would be to ask your current lender for permission to let the property. They may charge extra interest on this.
The Buy to Let market depends on 3 main criteria which are Rental Income Achievable, Equity (loan to Value) & your credit score. All will affect the viability & risk as far as the lender is concerned, which will inturn affect the rate you can get. Many deals however will tie you in for a period of time & if you plan to sell in a relatively short term this & the costs would make it unfeasible. You can get lower rates but the fees will be higher. However rates are generally higher as the risk to the lender is greater than a mortgage on your own home. As far as new borrowing is concerned some lenders will ignore the rental property mortgage as long as the rent covers the mortgage by 125%. Otherwise you would need to be able to support both mortgages as far as income is concerned.
Please note that although I am a mortgage broker, the above is not advice just a few points regarding the market.

Just wondering if anyone can help with a quick(ish) question...

If purchasing a property that requires renovation and will ultimately become a family home what deposit will lenders look for?

In simple terms the property is listed at £10, which the lender agrees with on the initial valuation.  It requires £2 of work to bring it to a standard where it is fit for habitation.  This would be followed by a further £5 of work completed over 12 months with the funds released in agreed stages.  At the end of all of the work the buyer and lender agree the property will be valued at £20.

The lender is offering an attractive mortgage that requires a min 20% deposit. 

Will the lender  look for a 20% deposit of the purchase price(£10): £2.00, the purchase price plus essential work to get it fit for habitation (Total £12): £2.40 or on the full amount including renovation (Total £17): £3.40.  My understand is that even though the funds will be released in stages the lender will still want 20% of the total amount borrowed, the £17.00. but would appreciate if this correct.

To cut a long story short, based on affordability the total lending is a piece of cake although the deposit available  is potentially an issue and could mean the difference between a good or bad mortgage product. 

Ta