Is My Broker Mad????

Mortgage_Novice

My fixed rate mortgage is about to come to an end (boo hoo) in three months. When I took out the mortgage there was an early repayment charge (can't remember how much) if I closed it before Sept. My broker said that I should think about paying this as he reckons the deals now will not be as good as those around in three / four months. He even suggested he might consider paying it on behalf if I were to remortgage now.

If he wants to that's fine with me but why on earth would he want to do that? And will I get into trouble if he does and my lender finds out?

Thanks.

toonfish

you could secure a remortgage at today's rates by paying the appropriate booking fee and waiting until September to complete.

Can't see any sensible reason for what he's suggesting.

JoeK_3

You were right to ask the question.

Your broker must be the novice, not you, as toonfish say's you could secure the product now and complete after the redemption date.

Find yourself a now mortgage broker as this one is potentially costing you more than necessary.

JoeK

dwsjarcmcd

I agree with the above posters, how he can possibly know that the deals are going to be better in September than now is beyond belief.

In answer to your question, your broker is either mad or incompetant, possibly a bit of both

MortgageMamma

Or he could jsut be charging a whopping fee which will cancel out the early repayment charge he pays out of his own pocket

Added to which if its a smaller mortgage the ERC will not be a huge amount anyway

He could also be an employed broker with targets to meet who is getting desperate

Does the OP have a history of adverse credit?

Whatever the situation, Toonfish's advice is correct, apply now, complete after the early repayment period

AndrewSmith

Just to echo the above really.

The majority of remortgage deals, once at offer stage, have a shelf life of 3 months or more. By applying now you will secure the deal you want, it will take at least 3-4 weeks to get the offer by which time you will be able to complete in September without going past the expiry date of the mortgage offer.

I cannot see the reasoning behind such a suggestion.

Jon_Davies

Couldn't agree more - the guy is probably chasing a fee/proc as business is slow at the moment.

Deals could conceivably be BETTER in September and if they are worse it will be a maximum of 0.25%. The ERC would have to be extremely small to justify paying it for 0.25% gain.

Mortgage deals can be secured in advance - I would suggest switching brokers and getting one organised shortly (every day 2 or 3 lenders are pulling their fixed rates at the moment). Make sure the deal will last until September though - not all lenders are amenable to that.

AndyWallace

AndrewSmith wrote: »

it will take at least 3-4 weeks to get the offer ...

Hi Andrew :A

3 - 4 weeks to offer? Really? Can't you submit direct to lender?

Andy.

MortgageMamma

I think what he meant was that its possible to drag out the process to get to offer in order to ensure the offer remains valid as long as necessary, but I might be wrong.

AndyWallace

Ahh. OK. I understand the point now.

Spangled

OP - I'm tied into my current mortgage (with £6k ERCs) until the end of Sep but secured a new fixed-rate deal with Coventry BS in mid May, just before May's IR hike. The offer is good for six months so I can complete on it on 1 Oct and thus not pay any ERCs on my current mortgage. My fees-free broker sourced the deal for me. He said that not all mortgage offers are good for six months - some for only three months - so you need to hunt around. Good luck with it.