Lenders and brokers say fix your mortgage

Ian_Griffiths_Halifax

mbga9pgf wrote: »

But that wasnt a problem, as there were plenty of developers willing to lend you the 5% as part of the offer...

I'm sorry but you appear to be talking out of your sphincter. If somebody were getting a 5% Builder paid deposit, MOST wouldn't have needed the 125% mortgages. There were loads of lenders who would accept a 5% Builder paid deposit and at a better rate than the 125% deals.

andrewmp

Ian_Griffiths_Halifax wrote: »

I've been advising client to go for a 5 year Fixed rate for years. I have some clients, but only a few, on 10 year Fixed rates, and I have only a handful on 15 year Fixed rates. I have NO clients out of a client bank of over 5,000 on 25 year Fixed rates. To some degree this is down to not needing one, but also I'd advise against it as life can chuck so many changes at you that you can't really plan so far ahead and the penalties are usually so high that it wouldn't be worth taking the risk.

What is the difference between a 10 year fix and a 25 year fix with no redemption clauses after 10 years? Why would you advise against a 25 year product like this over a 10 year product?

mbga9pgf

And anecdotaly, I know of lots of people at work that used the 125% together offer with 5% deposit paid to pay off old debts or furnish their new home.

The issue wasnt the best deal they could get, the issue was the debt they already had and wanted to throw on the HPI bonfire.

Ian_Griffiths_Halifax

andrewmp wrote: »

What is the difference between a 10 year fix and a 25 year fix with no redemption clauses after 10 years? Why would you advise against a 25 year product like this over a 10 year product?

It's been a long time since I arranged a 10 year Fixed Rate, and 25 year Fixed Rates with 10 year penalty periods weren't available then.

If somebody WERE looking at a long term Fixed and wanted 10 years+, then I would consider a longer one with only a 10 year tie in.

GDB2222

Ian_Griffiths_Halifax wrote: »

It's been a long time since I arranged a 10 year Fixed Rate, and 25 year Fixed Rates with 10 year penalty periods weren't available then.

If somebody WERE looking at a long term Fixed and wanted 10 years+, then I would consider a longer one with only a 10 year tie in.

Isn't it up to you to advise, though? To put it another way, shouldn't you be more aware of what is available, in order that you can advise properly? If I were at the FSA, I'd be looking for brokers to justify why they were not considering long-term fixed rates in every case. Of course, for some cases they might not be suitable, but I'd expect the reasons why letter to explain why not in each case. Just my 2p-worth, as I'm not at the FSA.

Really2

GDB2222 wrote: »

Isn't it up to you to advise, though? .

They are not alowed to give advise are they though nowadays?

GDB2222

Quote:
Originally Posted by GDB2222
If you fix the mortgage rate, you reduce the scope for nasty surprises.

like fixing at 6% six months ago and not taking the tracker mortgage that was offered that would be only 2.4% now

Well, say inflation takes off to 25% a year in say 2-3 years time, which is a possibility given the amount of QE being talked about. Then interest rates might go up to 20% - 25% too. So, a fixed 6% might look very nice indeed. At least it would be affordable, whereas the variable rate might not be.

The point is that you fix for bad times as well as good, at an interest rate you can afford. It's about risk, not saving money.

chucky

GDB2222 wrote: »

Then interest rates might go up to 20% - 25% too.

:rotfl: :rotfl: :rotfl:

you're clutching at straws to get your point across

Ian_Griffiths_Halifax

GDB2222 wrote: »

Isn't it up to you to advise, though? To put it another way, shouldn't you be more aware of what is available, in order that you can advise properly? If I were at the FSA, I'd be looking for brokers to justify why they were not considering long-term fixed rates in every case. Of course, for some cases they might not be suitable, but I'd expect the reasons why letter to explain why not in each case. Just my 2p-worth, as I'm not at the FSA.

It is up to an Adviser to Advise and that is what people are paying/using advisers for.

If somebody came to me and asked for a 10 year Fixed Rate, I would analyse their situation and then make my recommendation. If they ASKED for a 10 year Fixed rate and I am recommending an alternative, then I WOULD justify why I am NOT recommending a 10 year Fixed.

Generally though you would justify why you ARE recommending something, not why you are NOT recommending.

If you were to justify why you were NOT recommending something then a client who is advised to toke a 5 year Fixed Rate would need to have it justified to them as to why they were not recommended a 2 year tracker, a lenders SVR, a 2, 3, 4, 10, 15, 20 or 25 year Fixed, a discount, a Cashback, A Free Valuation Scheme etc etc etc, where does it end?

Really2

GDB2222 wrote: »

Quote:
Originally Posted by GDB2222
If you fix the mortgage rate, you reduce the scope for nasty surprises.
Well, say inflation takes off to 25% a year in say 2-3 years time, which is a possibility given the amount of QE being talked about. Then interest rates might go up to 20% - 25% too. .

:rotfl:
But in reality there is little chance of BOE being over 2% in 2 years and 5% in 5 years.
Their are masive debt holes to fill before inflation becomes a problem.

Please do not become a FSA.
"HPC Lending how may I help"

"Yes I advise you not to buy, But if you do on a 10 or 25 year fixed rate"

"what do you mean I may need to move in the next 25 years"