RTB - Help!

claire23

Hi,

My Husband and I have a representative from a place called "The Advisory Service" coming to see us tom. aft. to discuss our right to buy. Has anyone heard of them, are we wasting our time etc.

We are interested in buying our council house, just don't want to get ripped off.

If anyone has any advice on what to do I'd be very grateful.

Thanks

applecharlotte

Hi.

Whatever you do, please don't pay anybody to help you buy your council house. It is such an easy process and you don't need help doing it. These companies are so patronising by assuming everybody in a council house is stupid and a bad credit risk.

You can ring the council and tell them you are interested in buying your house. They will send somebody round to value it without it costing you a penny.

And you can go directly to any bank or building society who will be only too happy to lend you the money (subject to status of course) and with your council discount you should be able to borrow 100% off the money you need. Please let me know how you get on, and if you need to ask me anything please pm me. I'm only too happy to help.
Good luck

claire23

Hi,

Very nice man came round. He didn't seem patronising.
Advised that they consult many mortgage lenders to find the best deal for us.
Explained that they are there to advise and help us with the process. He said that a man from the council will value the property and give us the price at which point we contact them to say yes or no.

The fees are : survey required by lender £125
legal work £399
advice fee £125
completion fee £ 50
All fees (except survey fee) can be added to mortgage.

It all seems quite reasonable, however my husband and I are new at this so welcome all advice.

Thanks.

silvercar

Is that "very nice man" worth £125 to hold your hand?

Seriously, if you feel more comfortable having him in the process then its costing you £125, if you feel you can manage without him you can save this money.

claire23

Hi,

Are the other fees reasonable then? Would these be charged normally?
Sorry if I sound naive.

applecharlotte

The survey fee sounds very cheap. In my experience they are more likely to be around £250. This is charged by the lender and will vary according to which lender you go with, so your friendly man can hardly quote on this.

It's easy enough to shop around for your own mortgage.

What exactly does his advice fee cover? And the £50 completion fee. What's that for? I assume that is going into his pocket aswell.

Check the small print before signing anything- these people usually take a percentage of the value of the property- it's usually hidden ion the small print!

Let us know how you get on.

claire23

Hi,

Advice fee is for assisting us in all aspects of the purchase which includes access to the mortgage service and the discounted survey fee and all done from the comfort of our own home. (sorry - direct quote from letter)

Is the legal work fee of £399 reasonable?

payless

whilst you may find a local broker willing to do this without further fee, the fess you list don't seem to bad if they are assiting you with all the paperwork

However do check out if there are other fees , in relation to the mortgage, or called other things , as I have come across RTB advisory firms that indeed charge a %.

also check the "full" name of the firm on http://www.fsa.gov.uk/register/ to ensure they are regulated for financial advice

you may also want to "google" their name to see what comes up

claire23

Hi

The letter that the man left with us only states the fees I have quoted. The £399 includes all outlays

I have noticed on some companies adverts on tv fees of £2595? and more.....

This made me think that the fees we were quoted were ok.

If the legal fee is ok and the survey fee required by lender is fine, surely £125 + £50 isn't too bad for advice and assistance.
I am not too naive that I don't ask questions... I did ask if they went to all lenders and about interest rates etc. which he was only too happy to answer. I kept going over points to clarify them as well.
I just wondered if anyone else had bought their house this way?

MortgageMamma

Hi Claire

Buying a house can be a worrying time, particularly when you are unfamilar with mortgages and the rules surrounding the purchase of a council house. It's important that you make the right decisions. A good mortgage advisor will guide you through the purchase of your council house through to completion without charging a fee. Please consider the following points:

1. Do the fee's the advisor charge cover the cost of everything or is he also being paid a procuration fee (commission) from the lender he selects for you?

2. How can he advise you on valuation fee's if he has not selected your lender?

3. All valuations are done from the comfort of your own home, as they are done on your home, and most Independent Mortgage Advisors will be happy to pay you a visit without cost or obligation. It is often better in my experience if you go to the advisors office as you are less likely to get distracted (expecially if you have kids,like me!)

4. Does your council house mortgage advisor offer whole of market option on mortgages? This means he can choose from all the mortgages that you qualify for on the UK market, and believe me, there's about 4,000 of them. If he recommends from a panel (selected number) of mortgage lenders then you may not be getting the best deal for you.

5. The sales rep should have given you something called an Initial Disclosure Document, which gives details of the services on offer and any occassions where you will be required to pay a fee. Pay particular attention to this and make sure you understand it before you instruct him verbally or otherwise to advise you. Some companies also give a terms and conditions which is equally important.

6. Don;t be blinded by technical jargon. If you do not understand something get your advisor to demonstrate what it means, and educate you about it(within reason!), or you will not be able to make an informed choice.

I'm not trying to scare monger you but make sure the advisor you speak with puts things in clear terms for you, and you come away from the meeting more informed about mortgages and your options, not confused. Do not take the first offer that comes your way, and make sure you get a mortgage "advisor" not a mortgage "saleman" as believe me, despite regulation there's still plenty of them about!!

Why not try typing in fee's free mortgage advice in the internet and see what you come up with? Good luck I hope everything goes well, please let us know how you get on!

claire23

Thanks for your reply.

It is worrying. I know that buying a house can be a great thing, we will be on that first important rung of the property ladder - but is is terrifying when you don't know what is involved.

In answer to your points-

1 - The letter he left states a specially reduced fixed fee of £399 (+ Vat) which will cover all outlays.
2 - The valuation fee is a discounted fee of £125.
4 - I'm sure he mentioned being whole of market - he did quote on quite a few lenders.
5 - I take it the letter he left may be similar to the document you mention as it states the fees involved.
6 - Don't worry I asked him questions the whole time - to the point of asking him to go over certain points again to get them clear in my head.

We were planning on going to our Bank etc to get other quotes - we have 2 months from getting the price of the house and quote for mortgage to say yes or no to continuing (It says in the letter that there is no obligation to buy)