Mortgage offer received, everything alright? NOT!!!!

B52

Mortgage offer received finally but it's a different product code and A HIGHER FIXED RATE for the first 3 years.

A few weeks ago, our mortgage advisor showed us a 'Key Facts' illustration of the mortgage product at 5.49% fixed for the first 3 years. (We are self-employed.) We are alright with this and signed for application.

But the mortgage offer we received from the lender is 5.69% fixed for the first 3 years, and with a different product code.

0.20% is not a lot but we would have expected our Mortgage Advisor to have picked it up and informed us of the difference. But she did not say a word about it.

We will have to pay about 500 pounds more than our quotation, ON THE OTHER HAND, our Mortgage Advisor's company will receive an extra of about the same amount as their commission!

What a coincidence!

We would appreciate your advice if this is normal or if there is anything fishy.

Thanks!

silvercar

It may be that the offer you originally applied for was withdrawn before your application was received by the lender. They might then have proceeded with the application on the basis of the replacement product. it would be nice if the advisor or lender had let you know.

The question now is can you or the advisor find you a better deal elsewhere?

Jay1b

Also advisors are often wrong, and lenders will make different offers to what the advisor believes.

B52

Thanks for your kind advice.

Our mortgage advisor still has not returned our call after 3 hours. (We left a message saying that the lender has made a mistake in giving us a different mortgage product, we did not go into detail.)

In the meantime we called directly to the lender. They told us the original product has expired (same as your advice).

When we mentioned about our mortgage advisor's fee gone up by about 500 pounds, while we have to pay about 500 pounds more, the lender said, 'I see what you mean!' and advised us to speak to our mortgage advisor and see if we can get a compromise.

I can understand the quotation won't last forever, but we feel slightly cheated by the mortgage advisor. They are earning more at our expense, and we feel that they have tried to hide this and hope we did not notice.

xela_17

Maybe the lender has just made a mistake on the mortgage offer. They did on ours, except it was the purchase price and not the rate they got wrong. Ring them and ask.

devils_advocate

The markets are factoring in one or two rate rises in 2006. Swap rates have gone up dram atically inthe last 2 weeks, and its these rates that the financial institutions use to price the money they borrow to lend to you. Thae fixed rate that you have been quoted has probably been pulled by the provider because of the rate increase.

payless

If rate had been pulled , broker should have issed a new Key Facts illsutration straightaway
is it even the same lender ( commission rarely alters with same lender , on similiar products )

NervousYetFeisty

Yup, similar with ours. A misprint apparently - they state IO when we applied for a repayment. Still taking them weeks to send out a new one.

Everest

I can't talk about your circumstances - I am aware that being self-employed has implications on mortgages and the complexity of arrangement - but do you really need to use the mortgage advisor? Unless you have a signed a contract to say you will pay them their fee whether you take the mortgage they arrange or not, you are not obliged to use them, despite their having offered advice. You could put a separate application into the mortgage bank on your own without the advisor. That way, though you will still have to pay for the increased interest cost (seems you will have to do this anyway), you won't have to pay the 0.5-1% fee of your advisor. That may save you the extra money.

By the sound of their tardiness in returning your call, and not noticing the change in rate, they are not providing you particularly good service. Why should you put up with that? When I was buying my flat recently, I began by using an advisor as my working hours meant I had little time to sort out a mortgage. I was disappointed by the service I got (wanted to structure the purchase in a particular way, and my advisor wasnt helpful: he had arranged the mortgage he thought I should have and then wouldn't suggest other ones that would have worked better for me. Doing a quick search online myself, turned up a number of mortgage providers who did what I wanted and cheaper than the one my 'advisor' found! Suffice to say I didn't stick with my advisor. So unless you have particular loyalty to this advisor, or the mortgage you need is very complicated (the forms look more scary than they are) - then consider dropping the advisor.

B52

Thanks very much for all your advice.

Mortgage advisor returned call finally late yesterday saying the original offer has expired and that the increase in commission is not a direct result of the increase in interest rate etc.

We can't really do much unless to start looking for another mortgage, but we hope to move soon so we just accept it as it is.

Just disappointed she did not pick this up as if hoping we did not notice.

Next time when we want to change mortgage, we will definately look into doing it ourselves.