Conflicting Broker Advice... help!

Albert_FTB

I am tempted to reserve the 6.83% rate which L+C has found (Nationwide), as basically we can cancel this with no obligation if we chose to. That way we are hedging our bets a little bit - if things turn really sour we've got that to fall back on, if rates improve we cancel that and get something better. Basically I'm not one to take big risks, and just hoping that rates are going to improve is too much of a risk for me.

Bearing all that in mind we probably won't get the valuation needed anyway!

Any further thoughts are much appreciated, and thanks to those who have posted so far.

luckyfool

Albert_FTB wrote: »

I am tempted to reserve the 6.83% rate which L+C has found (Nationwide), as basically we can cancel this with no obligation if we chose to. That way we are hedging our bets a little bit - if things turn really sour we've got that to fall back on, if rates improve we cancel that and get something better. Basically I'm not one to take big risks, and just hoping that rates are going to improve is too much of a risk for me.

Bearing all that in mind we probably won't get the valuation needed anyway!

Any further thoughts are much appreciated, and thanks to those who have posted so far.

Staying on the SVR of 7% is effectively a fee free term tracker at 2% over base with no ties. If products or home values improve at ANY point then you can move products either within Accord or to a new lender. Also base rate is likely to fall in the short - medium term . . . if I had to guess I would put money on it coming down at least 0.25% if not 0.5% tomorrow (making the Accord SVR for your deal 6.75%). If I was in your position and I had flexibility in my budget so I can take the risk with a variable rate then I would stick with the variable rate.

If I didn't then I certainly don't think the Nationwide option makes any more sense for you.

The key thing here is . . the Accord system valuation thinks you need a 100% deal and are offering 6.99% fixed for 2 yrs fee free.

As an alternative you have Nationwide, a rate only 0.16% lower that requires a valuer to confirm a 90% ltv.

If you think that you have a good chance of getting a valuer to be a bit more optimistic than the Accord's system valuation of your property then you can pay Accord £75 (which can be paid upfront or added to your mortgage) for them to have a proper revaluation done. If that comes back higher then you can get the 95% or 90% deals I mentioned earlier. If it doesn't then to be honest you didn't have a snowballs chance in hell of getting that Nationwide deal anyway.

luckyfool

Talk about my above post being prescient on interest rates.

Obviously your SVR will now be 6.5% (and will possibly/probably get lower still over the next 6 months). If you can afford some fluctuations in your mortgage payments then the SVR is definitely a sensible option subject to your contract definitely specifying that the SVR is linked to Bank of England Base at 2% over.

Albert_FTB

Not having had chance to call Accord yet, I understand generally that SVRs track the base rate but how likely are they to reduce theirs by half a point now? What effect do you think todays decrease will have on fixed deals and how long before that effect takes place?

To be honest I didn't know that you could request the SVR to be linked directly to the base rate. Is that not the same principle as a tracker deal, and if so won't they just try and sell me a tracker as having an SVR with a guarantee of 2% above the base rate is essentially the same thing minus the 2year tie-in?