Hmm is this FSA trying to pull wool over my eyes re: mortgage??

fimonkey

Well as a complete novice in terms of money... I am beginning to grow up and even went to see an independant FSA about a number of things..one of which was a possible mortgage, fixed for 2 years. I asked him for the best deal for me (I'm a lone FTB).

He took my details and sent me the key facts which essentially said I could borrow 125K with a 25K deposit. Overall cost for comparison APR 7%. £300 for HIS fee for arranging mortgage (if taken out that is) plus £500 seperate mortgage arrangement fee.

I then trundled down to my own bank (The Nationwide). Their deal was I could borrow 128K, arrangement fee £500 and overall APR just 6.5%

Am I missing something or have I just sourced a better deal by walking in off the street to a main bank (something I though you weren't meant to do if you wanted a good deal).

I'm gonna try charcoal next, .. and then anyone got any recommendations of an Independant mortgage advisor in Bournemouth?

Cheers.

lynzpower

whats FSA?

You need to find an all of market fees free broker.

Whether you have found a deal better, I dont know, thats what you need an all of market broker for, but not one you pay.

Rick62

If your credit is good and your earnings sufficient you can do much better than either of these offers.

dunstonh

went to see an independant FSA

FSA is the "Financial Services Authority" which is the regulator and a part of the Government. IFA is independent financial adviser for investment class business. Mortgage adviser is the term for someone dealing with mortgages (advisers of other classes can do mortgages as well but I believe its best to stick to a whole of market mortgage adviser and not a jack of all trades, master of none adviser).

He took my details and sent me the key facts which essentially said I could borrow 125K with a 25K deposit. Overall cost for comparison APR 7%. £300 for HIS fee for arranging mortgage (if taken out that is) plus £500 seperate mortgage arrangement fee.

I then trundled down to my own bank (The Nationwide). Their deal was I could borrow 128K, arrangement fee £500 and overall APR just 6.5%

Have you found a house or was it just an initial enquiry? If it is at the initial enquiry, you could find that the adviser isnt going to be ringing around the underwriters to see if they can lend you money and push the budget. They will give an indication of what you should be looking to afford.

Am I missing something or have I just sourced a better deal by walking in off the street to a main bank (something I though you weren't meant to do if you wanted a good deal).

You havent sourced any deal at all yet. Also, you havent mentioned the deals, was one fixed rate and the other variable or was the adviser just issuing an example illustration to give an indication of cost.

At this initial stage, an adviser isnt likely to spend hours researching and reporting to you on the best lender because deals change almost daily.

payless

To be fair, APR is only one of the terms to use to compare deals... it takes into account not only fees and initial rate, but also the follow on rate ( usually using current SVR in its calculations) and in many people's minds , when looking at a shorter fixed rate does distort the deals

For example if lender 1 had a 2 yr fixed rate at 4% but a follow on rate of 8%, on a 25 yr mortgage the quoted APR would be higher than say lender 2
APR on example 6% with a follow on rate of 6.5%

Now if you were planning to " refixing" at end of 2 yrs , the second deal would be more expensive, even though its got a lower APR

petermb_2

There are plenty of good mortgage brokers who wont charge you a fee and will provide you with best advice. Your best bet is to ask someone who has already used one and go by recommendation. Usually a safe bet.
Good hunting!

fimonkey

Thanks all, and sorry I meant IFA (independant fincial advisor).

I haven't fouind a house yet, I want to be completely prepared and be all systems go before I even start looking, so I want my deposit in my account ready to access (which will be in 2 months time) and a mortgage offer in place too so as a FTB (therefore no chain) when I do see the property I like I can get in there ASAP - I just want to be ultra prepared and ready to roll before I even look at properties.

However I thought it was possible to have a mortgae offer in place and then it was current for 6 months? I'm certanily very serious about all this and will DEFINATELY be buying in the next 3 months.

I think I have a good credit history/rating. I never have any problems getting credit cards or loans if I want them (not that I have heaps of them anyway, at the moment I owe £600 on a credit card 0% interest which I'll pay off in full this month, and one loan at 7.5K).


Now with respect to 'asking around'.. I did that to no avail that's why I'm here on these boards. Of the ppl I know who have taken out a mortgage recently, all but one went straight to their main banks, and the other person recommended the IFA to me (whom I think is having a joke with his fees and the mortgage he offered me)... so anyone here recommend an independant whole of market mortgage broker in Bournemouth are please? (Am I allowed to ask for recommendations)?

Many thanks

fimonkey

Sorry forgot to add, .... I want a 2 year fixed interest mortgage, hopefully with no early redemption penalty as after 2 years I want to re-source and even perhaps move on.

I'm looking to borrow 125K (I earn 30K) and have a deposit of 20K. I am at the mometn not sure whether to go for an interest only mortgage (and go ont a repayment after 2 years) or a repayment from the very start. (Interestingly enough most of my friends are telling me to go for an interest only fixed for the first two years so I can borrow the maximum amount and afford repayments more comfortably, then change after 2 years, hence the need for no early redemption penalties).

Cheers

dunstonh

However I thought it was possible to have a mortgae offer in place and then it was current for 6 months? I'm certanily very serious about all this and will DEFINATELY be buying in the next 3 months.

You cannot get a mortgage offer or submit a mortage application until you have a house to buy.

You can get a decision in principle (DIP) which would indicate how much you can borrow. However, its not a guarantee. As for monthly cost, you dont need full research and info at this stage. You need to know what sort of costs are involved. There is too much work for full research when you havent found the place yet.

If you had been given full research when you started the thread, it would be out of date by now and deals have moved on. You may need to borrow £3k more or £3k less. At this stage you need an indication of cost and a DIP.

Of the ppl I know who have taken out a mortgage recently, all but one went straight to their main banks

..and have almost certainly ended up with deals which are more expensive than using a whole of market adviser. Its the same with investments. Most people see tied agents despite IFAs being cheaper and having a wider range available. Banks are in the high street. Smaller firms are not.

and the other person recommended the IFA to me (whom I think is having a joke with his fees and the mortgage he offered me)... so anyone here recommend an independant whole of market mortgage broker in Bournemouth are please? (Am I allowed to ask for recommendations)?

I dont know the area and the board rules wouldnt allow me to recommend one even if I did. However, most mortgage advisers dont charge a fee so it shouldnt be that difficult to find one. I cant comment on the deals as I am an IFA and not a mortgage adviser.

UK007BullDog

Actually I just read a couple of reports in the trade press today and I think even the Evening Standard that the banks offered the best deals last year continuously. A couple of lenders just released some brilliant life time trackers too. They will be hard to beat.

Banks also have more flexibility when it comes to their own banking clients and might be able to offer more than a broker can. I would definitely speak to my own bank and then look what a broker can do and compare the two.

dwsjarcmcd

just a couple of points to add, firstly your own 'bank' -the Nationwide - is not a bank but a Building Society and if you use Charcol's, i'm pretty sure they will charge you a fee of up to 1%, which dwarfs the other IFA's fee! Check their website for exact details.