Is a broker really necessary? Plus what does LTV mean?

Steve1977

Our current mortgage ends this December and so we'r going to try and complete an application for our next mortgage in September - Try and sort it out nice and early!

Due to us getting married next year, the Airmiles mortgage from Lloyds/TSB sounds very appealing. But we don't want to get a really expensive mortgage, just to get a free trip to USA or wherever. But I thought Id check out what they'r offering on their website regardless and i was suprised with what I found!

We currently owe £68,000 give our take a few pounds and paying that off over 20 years with the following mortgage...
Airmiles 5 Year Fixed 6.05% until 30/11/13 – 59K upto 1M upto 60% LTV


Means we would be paying an extra £60 on top of what we'r currently paying...which is pretty damn good! We thought the best we could hope for would be a minimum of £100+!

Our current mortgage rate is 4.45%. I'm presuming the price of it won't be going up astronimcally is because we invaribaly owe less due to having paid off 5 Years worth?


Also, what does LTV mean in relation to mortgages? I'v found this brief explanation:


"Loan to value (LTV) is the loan amount divided by the lesser of the sales price or appraised value. For example, if you are paying 15% of the total cost of the home as a down payment, you would only be borrowing 85% of the total sales price from the lender. Therefore you LTV would be 85%."


But could someone explain that to me in my situation? I'v noticed a few mortgages on the Lloyds Webpage and you have some at 60%, some at 75%...But which one should I go for? (Lower the better etc.?)

We was thinking of going to a mortgage broker - How much more do you think we could concievably save on our mortgage do you reckon if we did go to a Broker?

Also, as I said we are getting married and so are going to be getting a Joint loan (8k or less) to pay for this and also a new kitchen.... Should we do this after our mortgage has been done? Or does it not really matter?

Appreciate your help

Ian_Griffiths_Halifax

If you were Self Employed would you have an Accountant or would you do Self Assessment?

Many Self Employed people even use an Accountant to do their Self Assessment for them to save more money than if they did it them selves.

What is your Mortgage balance and the value of your house? The LTV calculation is:

Mortgage / Value X 100 = ?% LTV

Gorgeous_George

It seems that you borrowed about £77K at 4.45% over 25 years making payments of ~£420 per month.

After 5 years you will owe £67K and at 6.05%, over twenty years, your payments should be about £482. Hence the £60 uplift.

You need to work out your LTV to see which mortgages you may be able to apply for. I'd probably round up the mortgage to the maximum taht your LTV allows. That is, if your LTV is 70% and the mortgage you want is available at the same rate up to 80%, you could choose to add the extra borrowing (or part of it) to the mortgage.Then, rather than repayiong a loan you can overpay your mortgage or save in Cash ISAs.

The question whether or not you use a mortgage broker is not too important. You could use a fees free broker and do some digging yourself. If th ebroker beats your own research, use them. If not, don't bother un;ess the extra service a broker brings is important. In your case (and without sounding patronising) I think you may be better off if you use a broker.

GG

summermummy

Sometimes a mortgage broker is good if they can get you a better deal and some even complete the paperwork for you if you don't like doing this.

They can also occasionally give you access to deals that are not available on the high street. Alternatively you could consider using a packager who does a similar job and this can sometimes speed up the process as the majority of the administration is done in house. You can have a look at Charcol or Moneynet - there are many more sites to look at.

Ian_Griffiths_Halifax

In my experience Mortgage Packagers only slow cases down.

Steve1977

Cheers for the advice guys, much appreciated.

Martin Lewis himself said on the Internet to start looking at Mortgages as early as possible. So I ring up an Independant Broker and what do they say? Ring them up in November! What?! It expires in December!

Is this normal to leave it this late?

They also said to speak with our current lender first of all, which is fair enough. But he went on to say that other mortgages will be available in November that perhaps are not available now and whilst that may well be true, it could also mean a higher interest rate.

Totally confused now as to what to do

We owe 68,000 (give or take a few hundred quid) and the house is worth approx £107590 (swear it was worth about £130, 000 a few months ago!)

So our LTV would be... 63% ish? Therefore we would need a Mortgage with upto 70%LTV ?

minimike2

From your original post (and i say this without meaning to sound rude) - if you dont know what LTV is and cant decide what mortgage to take, I would definately say that a broker would add value for you.

Incendently, broker exclusives are starting to come back now too. Just had an email from Northern Rock with a 5.79 3 Year Fixed £1195 fee, which is pretty decent.

Even if you decide to arrange your own mortgage in the end I think you would benefit from seeing a broker, who may well find you the best deal for your circumstances.

A broker who has told you to call in Novemeber when the deal is up in december is clearly not very good at thier job. I would say that now is a good time to get an initial appointment conducted. I am already seeing people whos deals arent up until feb 09 so that I can keep in touch with options for them as the time gets closer and keep an eye on the market to choose the best time to apply.

How did you get in touch with the person you called? Generally the best way to find someone decent is a referreal from a friend or family member.

toonfish

November may be a bit late but 6 weeks is plenty of time to arrange a remortgage and a lot of the offers around now (Chelt & Glos for example) won't even be valid in December if you get an offer now.

Rates are easing too across the board so in all honesty if you approached me and your rate ends in December I'd advise you to hang fire for a couple of months at least