First time buyer advice

Aidanjm

Would like confirmation if anyone can help please.

I am first time buyer as a single applicant using a mortgage advisor to sort me out my deal. I earn £33k per annum and have about £16k in savings.

I have an agreement in principle with the Halifax on a 90% mortgage for a house I have had a bid accepted on for £155,000. I have a pension coming to me in about 17 years time with a lump sum around the £100k mark. Halifax are telling me the best they can offer is a deal that works out at £887 per month over 40 years - this is based on a rate of 7.19% for 2 years for a repayment.

The broker is taking £697 for his fee's - from his investigation, he assures me Halifax are the only lender who will do this deal, the rest will not give me that amount on x times my salary. Added to this he says after 2 years it will be pretty easy to re-arrange the mortgage for a lower interest rate etc etc (as long as it stays low of course)

I am pretty green with all this and will happily admit a little naive - could anyone perhaps tell me if this all sounds ok or am i being thick in even considering this deal?

Thanks

happybroker

how old are you and do you have any other debt?

Aidanjm

I am 41 with around £1,000 in debt with my cc's - over than above that the usual few things like sky, mobile phone, car insurance

happybroker

Halifax may well be the only ones for you on this (having had a quick look) but they do do a cheaper rate than this but not for all intermediaries...it's 6.79% fixed with the same fee as the one you have had recommended.

The fee is ok if the broker is giving you the money the lender will pay them for placing the mortgage, if not it's a bit steep in my opinion but not outrageous.

The term bothers me though...how are you going to be able to afford the mortgage in 39 years time....you'll be 80!

If you are going to use the lump sum from your mortgage to repay part of the mortgage then you could look at a term of a similar length which would give you payments of around £895 pcm over 17 years on the lower rate. Halifax affordability calculator says you can afford this.

Not sure what the rates will be in 2 years, look at what has happened over the last 2. Also equity may be an issue for you though Halifax are usually pretty good when it comes to offering something competetive to their existing customers.

Aidanjm

happybroker wrote: »

The fee is ok if the broker is giving you the money the lender will pay them for placing the mortgage, if not it's a bit steep in my opinion but not outrageous.

Happy broker - many thanks for your advice. By the sounds of it then the deal is not as bad as first thought. With regard to the 40 year thing, the plan is to re-mortgage/re-negotiate a better deal after 2 years to reduce both the term and interest rate. I also have a good pension coming to me.

The quote at the top - I am paying the brokers fee as Halifax have told him they cannot put it on my mortgage so i have to pay him his money which is £695

happybroker

If he is receiving commission also (about £1200) then £695 seems a lot to me but then again it's in the eye of the beholder so to speak.

I still struggle to see the point of the 40 year term though, if the last couple of years has taught us anything then erring on the side of caution shold be high at the top of that list.

Take all the people that mortgaged up to the buffers 3 or 4 years ago with the hope of remortgaging after a couple of years and using the equity that had built up in the property to get a better deal, many are in dire straights as evidenced many times on this forum.

Certainly I would encourage setting out a sensible plan for repayment at the outset and then regularly reviewing this in line with lender availability and personal circumstances. Doing it this way will mean that if lenders become meaner than they are now then at least you are sorted, as opposed to hoping they will be in the market for your business in the future. The easiest thing in the world to sell is a low monthly payment.

I also struggle a little bit with the fact that there is a lower rate available to you through the same bank for the same lender fee that another broker may be able to get you who may not charge £695 broker fee but again, value for money for one man is not necessarily sich for another if you follow me.

VIGILANT22

[QUOTE=happybroker
I also struggle a little bit with the fact that there is a lower rate available to you through the same bank for the same lender fee that another broker may be able to get you who may not charge £695 broker fee but again, value for money for one man is not necessarily sich for another if you follow me.[/QUOTE]

If the OP is happy let it be....their is a very obvious message in yr post.....:(

happybroker

not how it was intended vig, apologies if that's how it came over.

VIGILANT22

happybroker wrote: »

not how it was intended vig, apologies if that's how it came over.

ok...but it came across as if yr desperate for biz......

happybroker

it does rather, apologies again.....completely unintended.

thankfully pretty busy at the mo but tends to shouting and balling more than seeing clients!!

VIGILANT22

happybroker wrote: »

it does rather, apologies again.....completely unintended.

thankfully pretty busy at the mo but tends to shouting and balling more than seeing clients!!

...you mean at A&L processing staff!!