Shopping around for mortgage deals - DIY or broker?

kixxb

We are at the very early stages of looking to move home - got estate agents coming out this week to value the property, we are saving like crazy and know where we want to move to.

When we bought our first home, we used a mortgage advisor who was linked to the estate agent we purchased through which was fine but we were a bit young and naive and got a bit shafted on the insurance side of things.


Now we are looking at mortgages again and I'm wondering if the DIY is better - yes it will require more leg work from us but is it worth it? There seems to be suggestions that using a mortgage broker can sometimes get you access to deals and incentives not available on the open market and it takes some stress out of the process.


What have others done and what would you recommend?

WellKnownSid

A good broker will do all the legwork, and can steer things the right way thanks to their inside knowledge.

The downside is that I've yet to find a broker prepared to take on our complex case, so our last two mortgages have been DIY.

Dave_Ham

Typically, if you have a straightforward case with nothing uncomplicated; you are likely to get better terms going directly currently.

Aside from above post, typically on the more complex cases for whatever variable you would be better using a broker.

This is all on the assumption, that you know enough about your situation and check the criteria well for the lender you apply to as they are almost order takers these days.

All the best

kixxb

Thank you both!

Our situation is relatively straightforward ( I hope).


The only thing potentially making it more complicated is that depending on if/when and how much profit we make from the sale our or existing house, we may struggle to achieve the 10% deposit and might be looking for a 95% deposit (which is one of the incentives the builder is offering).


Most of these 95% deals are offered as part of the NewBuy scheme and it will make our options more limited.


It's all if's, but's and maybe's at the moment until we can either put our house on the market or negotiate a good part exchange deal with the builder (which I know is possible as a friend recently got a cracking part exchange deal on her home).

Dave_Ham

Your deposit situation makes this less than straightforward and I cannot imagine the builder letting you do this yourself and not using their broker.

You will also be ineligible for some of the schemes as you are currently homeowners. This is a niche area and others on here are better placed than me with regards to New Build schemes as not our thing.

Hopefully someone will be along soon to clarify...

All the best

kixxb

Thanks Dave.

It's actually the MI new home scheme in Scotland. It's apparently open to any UK resident buying a new home under £250k so we meet all of the initial criteria but it's just whether or not we'd get the 95% mortgage or not.


We are fortunate in that the estate we want to move to isn't built yet and phase 1 homes won't be ready until early next year with phase 2 later in 2014 which gives us lots of time to save up so that we can hopefully be in a better position financially.

kingstreet

kixxb wrote: »

It's actually the MI new home scheme in Scotland. It's apparently open to any UK resident buying a new home under £250k so we meet all of the initial criteria but it's just whether or not we'd get the 95% mortgage or not.

Which is simply the Scottish equivalent of NewBuy, a 90%+ mortgage with a guarantee scheme funded by the builder and government.

I suggest you talk to an experienced newbuild broker before you get too far down this road. If you won't be able to get the mortgage, you are going to waste a lot of time and effort marketing your home only to find you can't buy on.

I'm reluctant to suggest having a mortgage agreed in principle now as it will be stale before you are in a position to proceed, but it may worth "spending" a credit search on getting approved so you know the plan is worth undertaking.

You will need a spotless payment, credit and banking history. Residence at one address for three years or more, being on the electoral roll and preferably three years with the same employer would be very helpful.

kixxb

Thanks Kingstreet.

I agree, we need to speak to a broker now - I didn't realise there were brokers specialised in these sorts of mortages? Where would I find details of these?


We've got a meeting with the mortgage advisor at our bank next week and have also contacted the builder to confirm who their broker is as part of their 95% offer.


We would definitely look to get a mortgage in principle just to ensure we get approved.


In terms of our situation, we have good credit history - never missed a payment, been with the same bank for 20 years, good salaries, been with our employers for 15 years and 7 years. No debt other than our mortgage, a small car loan due to finish in 12 months and £200 on a credit card.


We do have assets but they are tied up in company share schemes which don't mature for another couple of years but we are keen to move before this.


Being pessimistic, I think this will work out more as an exercise in improving our financial position - I'm not sure we'll be able to get all the right elements in place to get the house we want right away but we may be in a good position in a years time to aim for one of the phase 2 homes.

kingstreet

Builders tend to use specialist brokers who only deal with newbuild, shared ownership, shared equity, newbuy etc. as they become "attuned" to the issues surrounding newbuild.

As each builder will have its own NewBuy/MI arrangements, it may be useful to try to establish which builder you might buy from, so you go to one of its lenders/brokers.

Getting an AIP from lender X might be pointless if lender X is not linked to your builder. If the builder uses lender Y, you could do with an AIP from lender Y, if possible.

kixxb

Thanks again - I've dropped a note to the builder to confirm who their mortgage broker is. Hopefully that will allow us to get the ball rolling.

Of course, if we get a good price for our property and combine that with our savings, we might be able to push for the 90% which would make life much easier!