Do I Need to See and Independent Advisor?

Adamc
Adamc Posts: 440 Forumite
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in Mortgages & endowments
Hi all

I am in a position to make an offer for a house. I have an agreement in principle with HSBC (came out on top with the the MSE tool) but wondered what is the best way to find the best rate for me? My friend has recommended an independent mortgage advisor. How do I ensure I find the best rate for me?

Many thanks
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Comments

  • ACG
    ACG Posts: 23,726 Forumite
    First Anniversary Name Dropper First Post I've helped Parliament
    It will be a combination of online and a broker. There is no set answer.

    Also, just to bare in mind while most people say they want the cheapest rate when it gets down to discussing it that usually changes.

    ie do you want to avoid fussy lenders? Do you want the maximum you can get (as lenders affordability rules vary)? Do you want a quick lender? and so on.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Adamc
    Adamc Posts: 440 Forumite
    First Anniversary Name Dropper First Post
    ACG wrote: »
    It will be a combination of online and a broker. There is no set answer.

    Also, just to bare in mind while most people say they want the cheapest rate when it gets down to discussing it that usually changes.

    ie do you want to avoid fussy lenders? Do you want the maximum you can get (as lenders affordability rules vary)? Do you want a quick lender? and so on.

    I'm after the lowest possible costs over the lifetime of the loan.
    HSBC offerred a fixed rate for 3 years at 1.64%, then SVR for 21 years (3.94% currently).

    £929 arrangement fee. £589 per month in repayments. £7360 total cost for year one. £738 per month will be charged in repayments after fixed term ends.

    £216.787 in total at current rates over 25 years. 3.4% APRC.
  • Adamc
    Adamc Posts: 440 Forumite
    First Anniversary Name Dropper First Post
    ACG wrote: »
    It will be a combination of online and a broker. There is no set answer.

    Also, just to bare in mind while most people say they want the cheapest rate when it gets down to discussing it that usually changes.

    ie do you want to avoid fussy lenders? Do you want the maximum you can get (as lenders affordability rules vary)? Do you want a quick lender? and so on.

    How much of a pain is remortgaging. Are there other fees to consider in addition to the arrangement fees? e.g. is it likely to cost more than £1000 to remortgage.

    HSBC have alluded to 10 years fixed rates but it just seems a bit too inflexible if we decide to move. I'm assuming the interest rates are increased accordingly.
  • ACG
    ACG Posts: 23,726 Forumite
    First Anniversary Name Dropper First Post I've helped Parliament
    I wouldnt really look at the lowest cost over the lifetime of the loan as that assumes the initial rate does not change, the SVR does not change, you never tie in to a new deal, you make all of your payments on time and no overpayments.

    It basically assumes nothing changes for the next 20-30 years, which is likely to happen, especially as you say you are likely to move.

    This is the sort of thing we (brokers) will discuss with you in more detail to help narrow down the best deal for you.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Adamc
    Adamc Posts: 440 Forumite
    First Anniversary Name Dropper First Post
    ACG wrote: »
    I wouldnt really look at the lowest cost over the lifetime of the loan as that assumes the initial rate does not change, the SVR does not change, you never tie in to a new deal, you make all of your payments on time and no overpayments.

    It basically assumes nothing changes for the next 20-30 years, which is likely to happen, especially as you say you are likely to move.

    This is the sort of thing we (brokers) will discuss with you in more detail to help narrow down the best deal for you.


    Thanks - What factors do I need to consider when choosing a broker?

    Is it appropriate to ask them about commission?

    Are there ever problems with recommending mortgage products based on how much commission they attracted as opposed to
    the one that works out best financially for me?

    Are there any factors I can look out for to find a good and trustworthy broker?
  • ACG
    ACG Posts: 23,726 Forumite
    First Anniversary Name Dropper First Post I've helped Parliament
    The commission rates for the high street lenders are more or less the same across the board. But even the differences that do occur, it is usually not much more than 0.05%.

    So on a £100,000 mortgage, you are talking about £50 difference in commission. Not enough for a broker to risk losing their livelihood over. That £50 is gross so before any deductions making it even less worthwhile to worry about. But brokers now a days have to provide a list of lenders and commission rates on request so if you ask they have to provide. I have never had anyone ask for a copy, but its their if they want it.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Adamc
    Adamc Posts: 440 Forumite
    First Anniversary Name Dropper First Post
    ACG wrote: »
    The commission rates for the high street lenders are more or less the same across the board. But even the differences that do occur, it is usually not much more than 0.05%.

    So on a £100,000 mortgage, you are talking about £50 difference in commission. Not enough for a broker to risk losing their livelihood over. That £50 is gross so before any deductions making it even less worthwhile to worry about. But brokers now a days have to provide a list of lenders and commission rates on request so if you ask they have to provide. I have never had anyone ask for a copy, but its their if they want it.

    Do some have access to more lenders than others?
    Is it worth looking at some direct only deals?
  • ACG
    ACG Posts: 23,726 Forumite
    First Anniversary Name Dropper First Post I've helped Parliament
    Every broker has exclusives and lenders others do not have access to but in the main all things being equal you are going to end up with one of around 10 lenders as they are typically top of the table. The only time 70 lenders is better than 60 lenders is if you have unusual circumstances.

    There is no harm looking at direct only deals and comparing to what the broker comes back with.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Richard_Pia
    Richard_Pia Posts: 69 Forumite
    A good broker will get a full understanding of your situation so that the recommendation he/she makes is most competitive and suitable for your needs. Depending on your circumstances you may want a short term deal that gives you the opportunity to review your circumstances in a couple of years, or perhaps you would prefer a deal that gave you longer term security. You mentioned term of 25 years but could you afford to pay the mortgage over a shorter term? If so you could save on interest.

    Ultimately, there are many variables in identifying which mortgage is best for you. It's not just a case of going for the product with the cheapest rate. In fact the cheapest rate often works out more expensive as it comes with higher fees.
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • amnblog
    amnblog Posts: 12,442 Forumite
    First Anniversary Name Dropper Photogenic First Post
    Be careful here Adam.

    Your posts suggest you will not get the best result if you assume you are better managing this yourself.

    Engage a Broker.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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