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Should I trust my mortgage broker ?
IvanGS
Posts: 3 Newbie
Should I trust my mortgage broker?
Hello, it has come to the point where I am beginning to distrust the validity of my mortgage broker’s advice and would appreciate advice from people who are more familiar with the process to validate his guidance.
The reason for getting a broker was to get the best deal and reduce some of the stress and hassle with getting a mortgage for the first time. The reason I am concerned is that it does not just affect us, the person we are purchasing the house from and all the other people involved deserve as little hassle as possible.
My suspicions began when some of what he has said – when checked later I found to be incorrect, some hard selling techniques also do not help with rapport of someone you are placing trust in.
Our situation:
£185k House.
£120k Deposit (increased since we first started asking)
£65k Mortgage required.
Myself age 22 - my regular earning in stable job £14,000 – Have other online ventures bringing in £3,500 per year (cannot be considered though)
Mother age 53:
Works part time 7,500 per year - zero hour contract so that cannot be counted.
Also is part time self-employed earning about 4,000 per year and waiting on tax forms to validate this.
First Meeting:
With my mother - she seemed happy – discussing fixed rates etc. (I have spent hours researching mortgages myself)
Second Meeting:
Because of my mother’s age we would apparently need a 16 year mortgage maximum – we were asking to borrow 80k at that time.
He then started right out with hard sales techniques used to sell me death cover, critical illness and sickness cover – I am a salesman, I know the techniques… they do not work on me I can assure you. Playing on guilt, saying who pay if I am ill, bank will take house right away. Quoting out of context statistics on house repossessions – yes 20k a year repossessions is a fair amount, but out of how many? what percentage is that ?! – what were reasons etc..
This just frustrated me especially at the first meeting before building any rapport with me at all.
First piece of incorrect advice. He said the bank take the house the second you cannot pay – We are at no risk of this – see workings out below - reading online that is the last resort and speaking to a judge the process could be extended up to 6 months if you refuse to pay anything.
Additionally to this he also said they take your entire house value… So I asked, you are saying if we only have 10k left to pay, default and they take the house the bank keep all the profit? He said yes.. acting as if I was stupid and said of course they take the house as they own it ! After reading online this is untrue – you are taking out a loan and the house is the security of that loan and after all the costs have been deducted any extra money from the sale comes back to you.
Also with sick pay, my job is very good and offer 4 months + with longer employment of full sick pay, the government then give you statutory sick pay of £350.20 a month for a total of 7 months from the starting date.. He failed to mention this when selling sick pay insurance.. What is the likelihood of me being ill for over 7 months – very unlikely, even if it was the case jobseekers, disability allowance (if I was injured), family members etc could all pay the tiny repayment amount.
From Sales experience I am wondering if he is declining to help us/ stressing us out as we are not taking his extra insurance, we may be tarnishing his track record. I can think of many opportunities as a salesman where sales were discouraged, customer service was reduced etc. if the customer indicated they were not taking add-on sales.
Third meeting
By this point I am now voice recording all meetings on my phone.
The length of term has risen to 25 years - !? Mothers age not an issue anymore ?!. Offers do change all the time, however he was all happy about Halifax before, next meeting he says Halifax are expensive.. now look at Natwest – suggesting his previous suggestion was not good.
He keeps saying the issue is the lack of earnings and money, keeps asking my mother for the tax return forms that are on their way.
His advice has not all been bad, I am just picking out the contest points and would like advice from people more familiar with the process on if this is normal – is he causing issues because I am not buying addons – can we not afford it ??? I am a little unsure – every meeting we think we are ready to go and leave with more stuff to do and unsure about the situation.
Affordability
Firstly I am lead to believe that mortgages are offered at about 3.5x annual salary. Me alone that would give me £49,000
From the other perspective of affordability over 25 year term.
Borrowing 60k add say 5k for interest.
60,500 divided by 25 years that he suggests = 2,600 year OR £216 per month. With my 1.1k monthly earnings alone how could this be considered unaffordable ?! Admittedly as a family we are good with money, we do not have latest phones, holiday regularly or buy everything on interest.
I know there are many bills, they will be covered mainly by the earnings we cannot account for anyway. I have been paying my mother £200 a month rent anyway and still managed to amass £15k deposit myself over 2 years of ample spending.
Any advice would be greatly appreciated, apologies for the length of the post.
Ivan
Hello, it has come to the point where I am beginning to distrust the validity of my mortgage broker’s advice and would appreciate advice from people who are more familiar with the process to validate his guidance.
The reason for getting a broker was to get the best deal and reduce some of the stress and hassle with getting a mortgage for the first time. The reason I am concerned is that it does not just affect us, the person we are purchasing the house from and all the other people involved deserve as little hassle as possible.
My suspicions began when some of what he has said – when checked later I found to be incorrect, some hard selling techniques also do not help with rapport of someone you are placing trust in.
Our situation:
£185k House.
£120k Deposit (increased since we first started asking)
£65k Mortgage required.
Myself age 22 - my regular earning in stable job £14,000 – Have other online ventures bringing in £3,500 per year (cannot be considered though)
Mother age 53:
Works part time 7,500 per year - zero hour contract so that cannot be counted.
Also is part time self-employed earning about 4,000 per year and waiting on tax forms to validate this.
First Meeting:
With my mother - she seemed happy – discussing fixed rates etc. (I have spent hours researching mortgages myself)
Second Meeting:
Because of my mother’s age we would apparently need a 16 year mortgage maximum – we were asking to borrow 80k at that time.
He then started right out with hard sales techniques used to sell me death cover, critical illness and sickness cover – I am a salesman, I know the techniques… they do not work on me I can assure you. Playing on guilt, saying who pay if I am ill, bank will take house right away. Quoting out of context statistics on house repossessions – yes 20k a year repossessions is a fair amount, but out of how many? what percentage is that ?! – what were reasons etc..
This just frustrated me especially at the first meeting before building any rapport with me at all.
First piece of incorrect advice. He said the bank take the house the second you cannot pay – We are at no risk of this – see workings out below - reading online that is the last resort and speaking to a judge the process could be extended up to 6 months if you refuse to pay anything.
Additionally to this he also said they take your entire house value… So I asked, you are saying if we only have 10k left to pay, default and they take the house the bank keep all the profit? He said yes.. acting as if I was stupid and said of course they take the house as they own it ! After reading online this is untrue – you are taking out a loan and the house is the security of that loan and after all the costs have been deducted any extra money from the sale comes back to you.
Also with sick pay, my job is very good and offer 4 months + with longer employment of full sick pay, the government then give you statutory sick pay of £350.20 a month for a total of 7 months from the starting date.. He failed to mention this when selling sick pay insurance.. What is the likelihood of me being ill for over 7 months – very unlikely, even if it was the case jobseekers, disability allowance (if I was injured), family members etc could all pay the tiny repayment amount.
From Sales experience I am wondering if he is declining to help us/ stressing us out as we are not taking his extra insurance, we may be tarnishing his track record. I can think of many opportunities as a salesman where sales were discouraged, customer service was reduced etc. if the customer indicated they were not taking add-on sales.
Third meeting
By this point I am now voice recording all meetings on my phone.
The length of term has risen to 25 years - !? Mothers age not an issue anymore ?!. Offers do change all the time, however he was all happy about Halifax before, next meeting he says Halifax are expensive.. now look at Natwest – suggesting his previous suggestion was not good.
He keeps saying the issue is the lack of earnings and money, keeps asking my mother for the tax return forms that are on their way.
His advice has not all been bad, I am just picking out the contest points and would like advice from people more familiar with the process on if this is normal – is he causing issues because I am not buying addons – can we not afford it ??? I am a little unsure – every meeting we think we are ready to go and leave with more stuff to do and unsure about the situation.
Affordability
Firstly I am lead to believe that mortgages are offered at about 3.5x annual salary. Me alone that would give me £49,000
From the other perspective of affordability over 25 year term.
Borrowing 60k add say 5k for interest.
60,500 divided by 25 years that he suggests = 2,600 year OR £216 per month. With my 1.1k monthly earnings alone how could this be considered unaffordable ?! Admittedly as a family we are good with money, we do not have latest phones, holiday regularly or buy everything on interest.
I know there are many bills, they will be covered mainly by the earnings we cannot account for anyway. I have been paying my mother £200 a month rent anyway and still managed to amass £15k deposit myself over 2 years of ample spending.
Any advice would be greatly appreciated, apologies for the length of the post.
Ivan
0
Comments
-
Just done a quick search. Santander would lend you £70000 with 35 years term on your £14000 income.
Few years ago i got 65 thousand on 25 years term and my wage at that time was around £16500
you can also try natwest. my broker suggested these 2 bank to me at that time0 -
You pay much more in interest than 5k. your monthly repyments would be between 320 to 400 depending on interest rate.
Affordability
Firstly I am lead to believe that mortgages are offered at about 3.5x annual salary. Me alone that would give me £49,000
From the other perspective of affordability over 25 year term.
Borrowing 60k add say 5k for interest.
60,500 divided by 25 years that he suggests = 2,600 year OR £216 per month. With my 1.1k monthly earnings alone how could this be considered unaffordable ?! Admittedly as a family we are good with money, we do not have latest phones, holiday regularly or buy everything on interest.
I know there are many bills, they will be covered mainly by the earnings we cannot account for anyway. I have been paying my mother £200 a month rent anyway and still managed to amass £15k deposit myself over 2 years of ample spending.
Any advice would be greatly appreciated, apologies for the length of the post.
Ivan0 -
From the other perspective of affordability over 25 year term.
Borrowing 60k add say 5k for interest.
60,500 divided by 25 years that he suggests = 2,600 year OR £216 per month. With my 1.1k monthly earnings alone how could this be considered unaffordable ?! Admittedly as a family we are good with money, we do not have latest phones, holiday regularly or buy everything on interest.
Before ranting away. Your maths is somewhat adrift. As the interest is nearer £46k at a 5% rate over a 25 year term. Which equates to a £350 per month mortgage payment. This a sizable chunk of your £1,100 take home pay. Given interest rates are rising in the future the monthly payment could rise somewhat higher.
There's no need to buy any other services from your broker. A polite decline will suffice.0 -
Thank you both for the prompt replies, much appreciated.
Thrugelmir thank you for the information, I have looked at a few basic repayment calculators and agree that the monthly payment is a little higher than I had roughly worked out.
I guess the issue is not that we can afford to pay it, it is the issue of which incomes are guaranteed - Zero hour contracts etc. do not help.
Thanks0 -
In answer to the question posed - yes, you should trust your mortgage broker
If you don't, you need a new oneEarly retired - 18th December 2014
If your dreams don't scare you, they're not big enough0 -
I will talk about protection first just to get it out of the way - for the cost of the amount of cover you would "need" it would not be expensive. £20 a month for instance would probably ensure you do not have to go through the hassle of claiming ESA... or you can in addition.
ESA isnt a quality of life its to ensure you are not living on baked beans, and asking family for help is less than ideal when you could pay a small sum of money to protect against it. I would help family out if they needed it, but if they purposely did not take out an insurance policy I would be a little aggrieved... It sounds like you are more annoyed at his "technique" rather than taking out the policy?
Anyway on to the mortgage...
- 0 hour contracts CAN be taken into account in certain circumstances.
- Your income should be just about enough, although it could be fairly tight with some lenders (depending on circumstances).
- Your mums age would be an issue but in the main getting a 16-17 year term should be achievable.
- As you seem to now be aware, if the house was repossessed it would be sold, the mortgage lender would take the outstanding amount plus any interested and costs incurred and you/your mum would receive the remainder.
If you do not like/trust your broker, find a new one. There are plenty around and its important you trust them and get on with them otherwise you will probably be more stressed than if you did it yourself rather than less stressed.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Hello ACG,
Thank you so much for your informative and prompt reply, I really appreciate the reassurance you have given me.
You are correct, I disliked the technique of selling the extra services - it made me reflect on the techniques I used to use in sales.
I am considering taking out the first level of insurance incase I was injured. However the reason I can save my money is because I do not just add another tenner here and there. I have to analyse the total cost of £10 a month over many years vs the likelihood and amount they will actually pay off, but having the peace of mind. We are likely to be overpaying each month anyway and my pay in the company is set to rise so I am confident in our ability to repay. My dad pays £800 for our current house anyway so we could look into him officially donating a little each month - I believe maintenance payment is considered at 50% of its value.
I will look into getting my mother's zero hour contract included in the application and what circumstances are required for that.
So thank you again for clearing a few things up, I have questions to ask my broker and one way or another we will get this house.
I really appreciate the input from everyone so far,
Kind regards,
Ivan0 -
Personally I think anyone with a mortgage relying on an earned income should have Income Protection to some degree or another. I doubt you will miss £20 a month - if the mortgage was £20 a month more I bet you coud find it?
BTW, im not trying to sell you a policy and I really would not word it like that in appointments... but your not my client and I do think its important you think about it. According to LV, their average claim period is around 6-7 years (much longer than your sick pay) that also falls in line with the average sickness benefits claim more or less.
Best of luck with it, but let us know if you have concerns on either the mortgage/protection, im sure you will get there.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
afzaal1988 wrote: »Just done a quick search. Santander would lend you £70000 with 35 years term on your £14000 income.
Few years ago i got 65 thousand on 25 years term and my wage at that time was around £16500
you can also try natwest. my broker suggested these 2 bank to me at that time
They won't by the way.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
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