I feel like the confused.com guy!

MortgageMamma

Joe_Bloggs wrote:

Financial psychology is fully exploited in the media adverts. There are close to 60 classifications of 'household types' according to Experian. It must make it even harder to explain the financial sense in a mortgage or similar situation when you are facing an ad campaign costing tens of millions. On the other hand I got a leaflet/flyer from Intelligent finance that mentioned that upto one third of borrowers could benefit from an offset mortgage !. That is not going to make a snazzy advert as it will upset two thirds of those who look into it.

The FSA acknowledge a role to educate the public in financial matters. Since you understand finance why not consider what people have difficulty in understanding and help them to understand more on this forum. This is in general terms rather than specifics. By considering the point of view of others, by asking questions of them, you can gain insight in to the way we all think. There is potential in encouraging others to think for themselves and express the way they see things.

J_B.

Yes I quite agree and I have felt that financial awareness should be studied as a core subject in schools for 15/16 year olds for some time now. but you can only teach people and educate them if they are willing to listen. there are all sorts of clients I come across, and I always attempt to gauge their level of knowledge before I advise them, as you have to be careful not to come across as condescending. TBH, my favorite type of clients are FTB's as they are blank sheets and soak up everything you say, usually because they are anxious. FTB's are most rewarding aspect of the job, getting people onto the property ladder and the feelgood factor you get.

But the point is, you can teach those that want to be taught, to an extent, as I'm sure you know this job requires years of experience. But those that do not want to be taught but want answers need to be told to see an advisor. There have been some pretty good levels of "advice/information" going on lately on the board. DunstonH is a classic example, always taking time to explain the ins and outs of issues to clients. And AndrewSmith is, although he isnt around so much these days.

Thanks for the debate,nice to have a different perspective.

AndrewSmith

maf20 wrote:

I am ever so grateful for all the good advice that comes through this site. However, I'm finding it very difficult to heed some of the adivce and make 'the right' decision. If anyone can help, our situation in the main is thus:

Mortgage term remaining: 20.5 years
Amount: 82k
Provider: HSBC
Rate: 5.5 variable tracker (no tie ins)
Joint take home per month: 3k
regularly save: £100 per month
current savings: 2k
Highish outgoings: an additional £650 to the norm (private nursery)


Totally open to ongoing great advice, but just struggling slightly with some options:

One Account
Offset
discounted
etc,....

Any advice would be really appreciated

Thanks

The place to begin is asking yourself 'what am I looking for'. A seemingly obvious question I know, but one that will drive forward your decision making process and will determine what you ultimately decide to do. Along with this question should be 'how risk averse am I?' which will help in deciding the type of rate you go for.

Looking to the first question:

Do you want absolute stability and know that your payments will remain unchanged for the next x number of years?

Do you want to hedge your bets on a slightly lower than fixed, variable rate, but run the risk of a rate increase?

Are you likely to be making any overpayments to the mortgage to reduce the balance, or do you want the flexibility of retaining the liquid capital whilst having any savings offset against your mortgage interest?

Regarding risk, are you prepared to hedge your best on a possible rate decrease in the future (NO IM NOT MAKING A PREDICTION) thus look at a rate that tracks the BOE, or are you prepared to accept a slightly higher rate in return for absolute stability for a set period.

Answering these questions will not only give us a better understanding of what you want, but will also start the thought process in your own mind.

Andy

AndrewSmith

MortgageMamma wrote:

There have been some pretty good levels of "advice/information" going on lately on the board. DunstonH is a classic example, always taking time to explain the ins and outs of issues to clients. And AndrewSmith is, although he isnt around so much these days.

Thou call the name of the devil and, as if by divine magic, he shalt appear. :rotfl:


Afraid I haven't been around much lately for a number of reasons.

One is the sheer workload of late.

Another is that I feel the board has loast some of it's value because of a valid point that you make J_B regarding the stock answer of 'speak to a mortgage broker' (not from the old regular crew I hasten to add). It is one of the reasons for the decline in numbers recently of Brokers posting on the site. Having said that I agree with MM that for some MSE'ers this is the exact thing that they need to be told as they are sometimes somewhat bombarded with insubstantiated comments and claims regarding which type of mortgage they should take etc.

At the end of the day Martin himself is very 'pro' brokers. As such I see nothing wrong with posters on here seeking advice from a qualified professional either generically on the open forum, or more specifically in private consultation.

Joe_Bloggs

Edit:- in response to post 13.
Given the scope of the questions and with full knowledge that my answers may influence my financial future I decline to answer without a grounding in basic financial knowledge and request the time to grasp the basics.

From my point of view this has been a philosophical aside regarding the perception of financial information and in no way a commentary on the specifics of maf20, who deserves a better deal than present.

@Andrew and MortgageMamma, on behalf of maf20, do kids get cheaper the older they get ?
J_B.

Careful_girl

Just a few thoughts from the worried woman scared about damp on her survey.
To step back somewhat and to appreciate where the forum is and its role maybe clearer when viewed as part of Martin's site. Many posters come on the forums as an extension to the excellent information offered by Martin. In my opinion a free market economy can only work effectively when the customer has information about products and prices.
Although there is an entertainment factor to the forums, they serve to give more information and this to be discussed. In my own case the search engines Martin has links to had not been successful in finding me the mortgage I needed (although they had in the past). I thus decided to investigate my options further via the forums. I was advised by a plethora of posters to get a broker. I did not have time to investigate mortgages further and needed experience and expertise. I took the advice and am very happy with the result (Thank you Andrew Smith for all your excellent work). There are many posters who are in a similar predicament.
As for the others who are asking pertinent questions and those of us fascinated by the financial world, let the discussion commence. I agree wholeheartedly that financial literacy is far too low. However I am not sure that the discussions about mortage problems impacts very much on this.
I agree that it is a shame when OPs do not get a chance to discuss their queries with others and that some are very quick to send them packing with a broker. Then there are those who take advantage and keep asking questions as if the brokers were working for them.
I hope the moneysaving from getting a good mortgage based upon the excellent knowledge on the site continues.
CG.

AndrewSmith

Joe_Bloggs wrote:

@Andrew and MortgageMamma, on behalf of maf20, do kids get cheaper the older they get ?
J_B.

Absolutely Not !!!!!! :rotfl:

AndrewSmith

Careful_girl wrote:

Just a few thoughts from the worried woman scared about damp on her survey.
To step back somewhat and to appreciate where the forum is and its role maybe clearer when viewed as part of Martin's site. Many posters come on the forums as an extension to the excellent information offered by Martin. In my opinion a free market economy can only work effectively when the customer has information about products and prices.
Although there is an entertainment factor to the forums, they serve to give more information and this to be discussed. In my own case the search engines Martin has links to had not been successful in finding me the mortgage I needed (although they had in the past). I thus decided to investigate my options further via the forums. I was advised by a plethora of posters to get a broker. I did not have time to investigate mortgages further and needed experience and expertise. I took the advice and am very happy with the result (Thank you Andrew Smith for all your excellent work). There are many posters who are in a similar predicament.
As for the others who are asking pertinent questions and those of us fascinated by the financial world, let the discussion commence. I agree wholeheartedly that financial literacy is far too low. However I am not sure that the discussions about mortage problems impacts very much on this.
I agree that it is a shame when OPs do not get a chance to discuss their queries with others and that some are very quick to send them packing with a broker. Then there are those who take advantage and keep asking questions as if the brokers were working for them.
I hope the moneysaving from getting a good mortgage based upon the excellent knowledge on the site continues.
CG.

@CG,

I am humbled by your kind comments, but thank you profusely. I try my best to please, and obviously my best is more than good enough

Many many thanks.

:beer:

Andy.

P.S. I promise I will reply to your last email today :rotfl:

MortgageMamma

Joe_Bloggs wrote:

Edit:- in response to post 13.
Given the scope of the questions and with full knowledge that my answers may influence my financial future I decline to answer without a grounding in basic financial knowledge and request the time to grasp the basics.

From my point of view this has been a philosophical aside regarding the perception of financial information and in no way a commentary on the specifics of maf20, who deserves a better deal than present.

@Andrew and MortgageMamma, on behalf of maf20, do kids get cheaper the older they get ?
J_B.

No they don't get any cheaper, as they start wanting miss sixty jeans at the age of nine, and just get more sophisticated after that. When I told my 9 year old we were going caravanning this year down south she scowled and said she'd rather spend the week in with her nanna than go in a caravan, as all her friends will laugh!

I've just started making my kids do chores for their pocket money every week - they will learn the value of money if it kills me!

boy_3

MortgageMamma wrote:

For those, including yourself, who seem to find it fitting to attempt to undermine a broker for suggesting the OP seek professional advice, perhaps you might want to consider how it would feel to be asked to post your most private details on a forum regularly viewed by 1000's of people. A security issue?

I don't understand this security issue here. Here I go. My basic is 80K. I have savings around 50K. I am an FTB. I have a kid and a lovely wife. I am the only earner at the moment and renting for the sake of flexibility. But, now looking to buy to settle down as I think I can afford it and have reasonable savings towards a deposit. Not looking to keep with the Jones's. So, looking for something 150-200K range houses. Ask me more private questions and I am happy to post here.
So, do you know who I am now? See if you can be a security threat to me now?
I don't think so. These are the fair details for a mortgage decision and should help somebody who wants to relate to the similar situation (from experience or expertise, either one. doesn't have to be just expertise). So, why tell the guy to go see an adviser. See if you can relate with him and give him options which he can take further with somebody. That's the whole point of forums.

PS: MM, I think you should not need your disclaimer sig, as nobody is taking you as a professional here. They take you as somebody who can help and give options, which you very good at and I really appreciate that.

AndrewSmith

The main thing that I try to exlain to all my clients is that a mortgage will 'generally' do exactly what it says on the tin.

Also it is not about being baffled and bamboozled by termanology and special names given by lenders to mortgage products to dress them up in a more attractive way.

Think about it. A Building Society or a Bank is run on the same concept as any other retail outlet. They have a variety of products, many that are similar to their competetors,so they will market them all in different ways trying to make their own look more attractive than ther rivals. Fancy names and packaging, or singing branch staff still don't change a 3 year fixed rate into anything that another lender cannot offer. The only difference is the price.

MOre important that the 'brand' names of the products is what it will actually do for you.

It is more important that, as a consumer, you know exactly what you want the mortgage product to do for you and to offer you than to be fully conversant with all the different names of the products etc.

This should then give you a 'shopping list' of requirements to focus on when searching for the right product.

Also, do not get sucked into the 'we can do it cheaper' trap. Just because a product's headline rate may be lower than another it doesn't make it the 'best' or 'cheapest' overall.

No two client or situations are the same, thus no two recommendations will be the same.

But the key to it all is to first know what you are looking for the mortgage to give you or do for you.

If you aim at nothing, you will hit nothing.

Andy