Urgent Advice on Mortgage Advisor Practice Required

maxxy

My existing fixed rate mortgage period is due to expire end of September 2007, at which point I will revert to the lenders standard rate. With this in mind my wife and I approached the mortgage advisor that we used last time as we had had a good level of service (that was or first mortgage).

After looking at our requirements, our mortgage advisor was confident that we could reserve a good rate even though we weren't due to change until September (redemption fees are liable before September). My wife and I queried at the time that the projections we were given by the advisor all appeared to be valid for 3 months only, but were told "don't worry about that"!

Having taken the advice we have now been informed by the mortgage lender and their solicitors that the deal we thought we had reserved expires end of June. I have recently discussed this with the mortgage advisor who is adament that everything will be alright (despite the fact that the offer we have had from the lender initially is a 2 deal year rather than the 5 year deal we thought we were getting, the advisor is alledgedly resolving this). I am not as confident as the advisor and am eager to know if I have any recourse against the advisor if the rate on the deal expires in June and I have to look for another rate. I am in an awkward position as I feel a rate of 5.49% is a good one, however I may have to pay a redemption fee if I take it before the alledged expiry offer of the offer in June. The other option is to let the deal expire and hope that any future deal is as good a rate.

I am keen to hear from any advisors to determine if this is common practice or whether my concerns are founded. As an aside it would be beneficial to me to hear other people's suggestions on this issue.

The details of our situation are below:

Mortgage amount required: £140000
Property value: £165000
Term required: 28 years
Mortgage type required: 5 or 10 year fixed rate, capital repayment.
Rate offered: 5.49% for 5 years, giving a montly repayment of around £822 (Cheltenham and Gloucester)
Redemption fee payable in June: £350ish (£0 at end of September)

As an additional note, I rang London and Country at the same time as I enquired with my existing mortgae advisor and was told it was too early to get a rate and to ring back in late June, which I will do soon.

Any help or advice on this will be gladly recieved.

Maxxy

mightymouse

Hi

If you think 5.49% is a good rate but unhappy with paying an exit fee what would / could the cost be over the fixed rate term if you dont take it?

If say 1/2 % higher then that would be £700 per year etc.(£3,500 @ 5 yrs)

check it with a mortgage adviser (independent)

I just read this thread

http://forums.moneysavingexpert.com/showthread.html?t=481913

maxxy

Thanks Mightymouse,

That is something I had considered especially with the current fixed rate deals going up. I think at the moment an equivalent deal may be around 0.3% higher, which I imagine over the five years would be greater than the current redemption fee, however I am still hopeful the issue can be resolved as my current rate is 4.69% until September.

I get the impression from your post that you feel 5.49% may not be as good a rate as I could get, and am keen to know if you think that with the information I have given there is a better rate available? the fees on the 5.49 offer are £999 added to the mortgage if that helps.

Also, as I applied for the mortgage a few months ago, it appears that the 5 year deal started when I applied, leaving me with effectively a 4.5 year deal when I actually start paying it. Is this common?

Many thanks,

Maxxy

mightymouse

Hi

I have noted the thread might be posted twice.

I have no comment on the rate just that if the offer was withdrawn what would be the outcome.

Fees and all costs should also be reflected in calculation (APR? but check if like for like) suggestion remains to see what else is available via a mortage broker.(Independent).

maxxy

Hi,

You are correct, the thread is posted twice - it was my first attempt at this and I got a bit carried a way and reposted by accident!

If the offer was withdrawn I would be no worse off financially as thus far I have not parted with any cash, however I would be unlikely to get a similar rate. I am speaking with a couple of independant advisors to look for alternative deals.

As an additional note, I received the new offer through today, however the information gave conflicting views: A statement at the top stated the offer was valid for 3 months from the 20th June 2007 (date it was sent out, I presume), another paragraph in the offer stated that the offer may be withdrawn if it is noty completed by 30th June 2007, and a further paragraph stated that it assumed the mortgage would start from 1st September 2007. This has confused me a bit, on the plus side it was actually for 5 years, rather than the 2 years originally offered.

My mortgage advisor seems relieved that the offer has come through, but I do not feel that I am any further forward. I am speaking with the solicitors again tomorrow to try and get a straight answer from them as to when the rate is valid until.

If I had to complete before June I would have to pay £346 redemption to my previous lender and would also be paying £82 a month more per month than my existing deal until it expires on 30th September. It will be interesting to see what other rates the advisors can come up with as it may still be worth doing in the long term. Still slightly annoying as a couple of weeks ago I thought everything was sorted out!

Thanks for your help,

Maxxy

*EssEncE*

By the sounds of things you have secured that 5yr fix rate with C&G. But by all means for added peace of mnd contact the C&G directly to clarify once and for all.

5yr fix 5.49% deals look to have been pulled, simular deals are approx 5.69% +

maxxy

Thanks *EssEncE*,

I have spoken to other advisors and have been quoted 5.69%.

I am meeting with my advisor tomorrow to try an clarify the exact dates the mortgage will commence, and when it has to be completed by.

Hopefully this can be cleared up although I am nervous about the fact that the paperwork may not be completed in time for the 30th July.

If this falls through I have calculated that I will only be about £100 worse off over the 5 year period if I go with a 5.69% rate from the Halifax, due to the fact that there are lower fees with that product and I would not have to pay a redemption penalty, or lose out on my existing 4.69% rate for the months I would lose due to redeeming early. Also, if rates continue to go up, the extra 4-5 months I gain at the end of the term due to the start and end dates of the Halifax product may result in me actually being better off on the 5.69% rate as I would have fixed rate deal that actually lasted 5 years rather than 4.5 years. Obviously if rates are lower by the end of the Halifax deal I would lose out a bit, but all in all I am happier with the situation as I don't feel it makes that much difference which way I go.

Maybe I am being naive, but thinking about it that way makes me feel better!

Maxxy

maxxy

Thanks to those who posted replies to my threrad your help was much appreciated.

After much correspondance between myself, the broker, C and G and the solicitors C and G extended the original 5.49% 5 year offer until the end of September 2007 meaning I won't have to pay any redemption penalty. I cancelled the application for the halifax mortgage as a result.

Thanks again,

Maxxy