Martins View On Using Mortgage Brokers...

dunstonh

I am wondering how people feel about the article last week in relation to the FSA looking at the possibility of aboloshing commission/procuration fee's being paid to mortgage brokers.

Personally, I think its daft unless the lenders improve the terms of the mortgage. Typically, deals through brokers have been better (ignoring current issues with some that are trying to reduce their distribution). Plus, the banks pay bonuses etc to their own staff for selling their own mortgages. So, if they dont have to pay the broker a commission but can still pay their own staff yet offer the same terms then that is wrong.

If the deals from the banks were factory gate priced (as will be the case for all investment class business from 2012) then I think that is fine.

Ian_Griffiths_Halifax

I believe that all financial products should only be available on an "Advised" basis. This would get rid of all the unscrupulous companies who charge high fees and give no advice, as well as meaning the lenders having to either be accountable for the mortgages they arrange, or leave it to Financial Advisers/Mortgage Brokers to arrange them.

jermyn

so what about mine who has not mentioned commission just fees

dunstonh

jermyn wrote: »

so what about mine who has not mentioned commission just fees

already answered in one of your two other duplicate threads.

gr7777

Hi guys,

Relatively new to this so bear with me....

My girlfriend and I are currently looking for a first time home.
We are fortunate to both be healthcare professionals (not going to mention which) earning around 160k per year between us.

We have (luckily) around 210k as a deposit for our house. Thanks to passed family members and hard saving!

I have recently been contacting a few different mortgage brokers because I quite simply want to know what is the very maximum we would be able to borrow from a lender. That way we can know which houses we are able to think about purchasing.

After speaking to several different lenders the deviation amongst the answers has been phenomenal! With one lender offering a 850k loan including our deposit, and another offering a 1m loan excluding deopsit.

I feel as a newbie i smell trouble here....and I was wondering if anyone with any know-how could give me some impartial advice!

Given the current climate I am very aware that there are amazing house deals out there for people who are desperate to sell their house. Given our situation we are very fortunate in that we have no chain, so I really want the maximum amount of loan we could potentially get given our situation.

It should be noted that we have no bad debts/ credit cards etc, apart from student loan repayments currently coming out at £111 per month.

Please help!"!!!!! ahhhhhhhhh
Much appreicated

GR

_Andy_

What advice do you want exactly?
You state "I really want the maximum amount of loan we could potentially get given our situation" which you've already found out.

gr7777

Thanks for your reply andy.

Sorry perhaps I should have been more clear.
I cannot understand how there can be so much variation with loan amounts.
I'm obviously cautious when dealing with such large sums of money and was wondering if there are specific reasons why different lenders range so much- and if the larger loans come with caveats to watch out for?

Thanks again

_Andy_

Different lenders have different attitudes to risk and therefore to how much they well lend.
Also each lender has different ways of assessing income/credit which is another factor.
I think you need to think more about how much you're comfortable borrowing rather than how much a lender will lend to you. E.g. what in X years if base rate is X% higher than today - could you still afford it then etc.

Ian_Griffiths_Halifax

gr7777 wrote: »

Hi guys,

Relatively new to this so bear with me....

My girlfriend and I are currently looking for a first time home.
We are fortunate to both be healthcare professionals (not going to mention which) earning around 160k per year between us.

We have (luckily) around 210k as a deposit for our house. Thanks to passed family members and hard saving!

I have recently been contacting a few different mortgage brokers because I quite simply want to know what is the very maximum we would be able to borrow from a lender. That way we can know which houses we are able to think about purchasing.

After speaking to several different lenders the deviation amongst the answers has been phenomenal! With one lender offering a 850k loan including our deposit, and another offering a 1m loan excluding deopsit.

I feel as a newbie i smell trouble here....and I was wondering if anyone with any know-how could give me some impartial advice!

Given the current climate I am very aware that there are amazing house deals out there for people who are desperate to sell their house. Given our situation we are very fortunate in that we have no chain, so I really want the maximum amount of loan we could potentially get given our situation.

It should be noted that we have no bad debts/ credit cards etc, apart from student loan repayments currently coming out at £111 per month.

Please help!"!!!!! ahhhhhhhhh
Much appreicated

GR

The amount you can borrow is less important than what you can afford to pay back. Don't get sucked into the "Buy the most expensive house you can get, to impress other people" merry-go-round. Work out a budget on what you can afford to pay out per month and use that figure as your "reversion rate". That's the figure you'll be paying AFTER and incentive period ends.

gr7777

thanks for the reply Ian.

I totally understand that.
Don't worry- we want a nice house for ourselves...not to impress other people.
I am not too concerned regarding the repayments as our salaries are increasing....however I am obviously having to take into account probable rises in interest rates over the next few years...
One other question i have is whether or not having a longer mortgage contract, for example 30 years will affect anything when applying? does that mean lenders are more or less likely to lend?

Again any help would be great, thanks