To mortgage advisor or to not mortgage advisor, that is the question...?

Nine_Lives

After discussion with the wife, she's basically asked why we need/would benefit from a mortgage advisor & is it worth the outlay. I don't know enough about them to answer the question so i'm asking here.

* We're FTBs (or will be). Neither of us have had a mortgage before.
* We'll have approx. a combined 48k-50k deposit. Based purely on me using online calculators, we're budgeting at 150k (so therefore requiring a 100k mortgage). Online calculators give results of £500pm +/- which we're happy with. For all i know in reality we may be able to afford more, maybe not.

I figured we'd just instantly go to a mortgage advisor. I'm generally better with figures & money & I don't really understand the ins & outs of mortgages & the missus certainly doesn't - (another reason for seeking advice).
I'm cautious about 'going solo' only to then make a mistake (cost!) or for things to take longer than they could (potential cost!).

The missus has read that advisors can charge up to 3% & many thousands. She's concerned that a large section of our deposit is going to in a way be wasted on something we could possibly do ourselves.

She's asked what do we get for our money? Will the advisor just look up what mortgages are available & say take that one - which is something we could look at ourselves & have a stab at which one is best if we could possibly understand the tables (we'd be going fixed anyway)? Or do these advisors do more than this?

Neither of us really know what to do & when. We have an idea of the process, but not when it should all be done & in what order. Pretty much .... we need our hand held.

I suppose i should stop short of "are they worth it" because that's subjective, but what do you get for your money really? What will they do for us beyond just saying - that mortgage is best...money please?

ACG

As a general rule, we come out and do a factfind to find out whats important to you. It might be lowest rate, it might be lowest fees, it might be a long term fix or something else.

We then search the market and find a mortgage that meets what your looking for.

We will then discuss it all with you to ensure you understand the important bits of it.

Once your happy we will take copies of the documents needed (ID, Banks statements, pay slips etc). Then submit the application. We will ensure it all goes through as quickly as possible and help if/when hiccups arise.

We also discuss the importance of protecting your mortgage (ie life insurance, income protection etc) so you/your family are covered financially speaking should something happen.

Basically hold your hand throughout the process.

We then write you a nice letter at the end explaining why we recommended what we did and how it fits in with what you wanted.

Some brokers dont charge a fee, others do. Charging a fee of 3% is scandalous even people with adverse shouldnt be paying a fee of 3%, other brokers just charge a set fee, not a percentage.

As for whether its worth it is entirely down to you and your partner. Your circumstances dont sound challenging at all, it should be fairly straight forward. Have you thought about whether having that helping hand is worth paying £xxx for? If not, doing it that way may help get your wife onboard if thats what you want, that way your setting a budget for it and can possibly haggle with a broker if they do charge a fee?

GMS

If the fee was quoted at 3% then run a mile. If a fee is involved make sure you are happy with it an in full agreement.

A broker will search for the most suitable product for you, having assessed your needs and preferences fully.

They will deal with all paperwork an follow the application through for you.

A broker should make your application pain free for you.

You would be able to get all questions answered and get a full understnding of the different types of mortgages.

You may also choose to discuss your protection requirements.

Why not speak to a broker and do your own research too. See which works out best for you.

Nine_Lives

Thanks for the responses.

Who would we go to talk to to discuss how much we can actually afford?

It's me who's 'decided' that we can afford £150k. I don't know 1) whether we'll get lent £100k to make this possible or 2) whether we can afford more than £150k or what.
Does a mortgage advisor do this or is this someone elses field? For all i know, we could afford let's say £160k. If we were able to branch just that extra £10k then it makes finding a house in the area we want much easier. We can find them at the £150k bracket, but it's a case of being patient. If we were able to stretch to £160k then we wouldn't need to be patient because there's a lot in that 50-60 bracket.


In addition .... at what point do we see an advisor? Right now we're just browsing rightmove & not doing much else beyond this. Do we have to do some groundwork before we see an advisor, or is this something that can/should be done really early on (if done now then it'd essentially be our 1st move beyond just browsing websites).

ACG

To get an idea of what you can afford you can speak to a broker upfront or go on the banks websites and see if they have mortgage calculators to get a rough idea of what you can borrow.

But i tend to work to the rule of 4x combined income as a ball park figure - with your deposit on top (eg: Combined income of £50k = mortgage of £200k and your deposit of £50k, means a purchase price of £250k... sorry for the insulting maths lesson).

If you have loans, HP, debts or other commitments then this will affect that figure. You may also get more than 4x income but it gives you a ball park figure.

Nine_Lives

In that case then we may be able to afford more. Obviously we'd need to discuss.

The missus gets approx £16.5k which is set. That'll increase slightly with the new tax code.
Mine fluctuates, but assuming i don't have (m)any sick days then i'm between £18k-£19k. I would've crept over the £19k marker last tax year had i not had 2 weeks off post op.

So combining 16.5+18.5=35 * 4 = 140k + a deposit of 50k = £190k, then a budget of £160k could be realistic.

Either way, we wouldn't want to be stretched at our uppermost limit. The whole reason we've been at home for so long is to make things as comfortable as possible when we move out. I don't want to be counting every penny worrying about everything when we move.

Building_Surveyor

just to give you an idea of fees, my broker charged £149 fixed fee. And i can use him for any mortgage in the future without having to pay again. As a FTB a broker is well worth the expense.

If theres a broker trying to charge you 3% of the mortgage amount run for the hills!! That doesnt sound like standard practice. id say between £100-£500 fixed fee as a rough guide but do not pay anything upfront.

I would thoroughly recommend using a broker if you know little about mortgages, especially as you don't want to be applying to lenders at random who you may have little or no hope with.

If your confident and have the time to do your own research then do it solo. But be prepared for all the time and leg work that goes into it.

Good Luck

ACG

Based on what you have said, you have a decent deposit there. You will be open to pretty good rates so affordability shouldnt be an issue.

Overall i would say your in a pretty good position - but thats based solely on these posts. I would suggest you get your credit reports to ensure there are no red marks your not aware off (ignore the score just go off the red, orange and green markers) - the companies are experian and equifax.

You have no reason to be paying 3% or anywhere close to that as it all seems pretty straightforward. Its more a case of wheter you want the helping hand or not. But even if you dont, advisors also help with protecting your mortgage in the event of you being off work for example its usually a lot cheaper for those sort of products going through an advisor than it is a bank.

orcocan

if you decide to go solo, make sure you get hold of the lender's lending criteria and review them carefully BEFORE you apply (i.e. max LTV can be different whether you buy a flat or a house, whether it's a new build or old property, some wont lend on ex council, some will, etc etc)

katsu

I padi £150 for my last remortgage and the broker was totally worth it for advice on different mortgage types, pros and cons and they can source some mortgage deals which are not offered direct.

kingstreet

I've just been talking to my colleague. He had an enquirer for an £80k mortgage who argued about our £249 fee. When he explained the commission payment of £240 doesn't cover our costs and we can't afford to offer a fee-free service in our area, she accepted.