Help me understand mortgage illustration papers

luizarios

Mortgage advisor has send me an illustration paper for a mortgage which they are required to do by the FSA, I can't put all of it here as it's highly confidential info but the last page of it lists the other mortgages available.



The advisor said the Woolwhich was the only one I could take as I didn't fit the affordability calculator of any other. However the list has a mortgage from First Complete (highlighted) and it has a PASS next to it, I asked for this one and he said I didn't pass the affordability calculator. But if I didn't pass the affordability calculator, what does the PASS next to the mortgage option means?

luizarios

I think the previous image was not very visible, so please find a small extract (hopefully it will be bigger enough for you to see the PASS)



Highlighted the mortgage he said it's the only I can have and the one I asked for

Many thanks

ACG

I dont use whatever software your advisor has sent you, but whenever i use my sourcing software I put down the clients income as £100k.

The reason being is that sourcing systems do not have the capability of assessing everyones income/expenditure in conjunction with every lenders affordability calculator.

Also does Pass mean you have passed affordability or you have passed criteria or. something else?

luizarios

ACG wrote: »

Also does Pass mean you have passed affordability or you have passed criteria or. something else?

That's exactely what I'm trying to find out

ACG

Why are you not asking your broker what the pass refers to?

luizarios

Because I suspect foul play. I was first given a 3.49% mortgage and only after that one failed (due to them giving the bank a lot of wrong information I never gave them, once the information was corrected, it turned up I didn't pass the affordability calculator for that first mortgage) I was given a second mortgage with 3.19% interest rate and passed it, the second one is a much better deal than the 3.49% so wondering why they offered me the worse mortgage first? Mortgage offer says they got money for referring me so suspecting their ''best deal'' is based on the one with higher commission rather than the real best deal to myself so doing some investigation..

Senior_Paper_Monitor

There are several sourcing systems and several options of display in most systems - we have no way of telling what system/options your broker is using.


Your mortgage broker will know what he/she is using and how he/she set-it up. He/She is really the best source of information for you.


Like most brokers I know (including ACG above) we turn off most filters (certainly anything to do with income/expenditure/affordability) in a search because they can exclude options that we might be able to work - and in the case of affordability they are extremely crude.


Some systems have a 'near miss' option etc - the list is endless.

ACG

I would very much doubt it.

Your broker may get different commission rates to me so take these figures with a pinch of salt....
Virgin Money would pay me 0.35% of the mortgage amount.
Woolwich would pay me 0.33% of the mortgage amount.

To put that into perspective, on a £100k mortgage we are talking about £20. Of that £20, his network would take a cut and so would the tax man, so its probably closer to £12 difference... is it worth getting a complaint and risking losing his license for so little?

You might have a poor broker and he may be biased towards the commission, but things must be bad if £20 his swaying his judgement.

I have literally just had to go and check the rates I get paid as I just assume all lenders pay 0.35% if its more its a bonus, if its less then so be it - swings and roundabouts. I actually use Woolwich more than I do Virgin.

But you can check the virgin affordability calculator yourself - http://intermediaries.virginmoney.com/tools/affordability-calculator/loan/6df8ed59-0e43-4fc8-a8b4-c7b1351800bb

luizarios

Thanks for your answer, that's very interesting indeed, first mortgage was Natwest so any chance you could tell me what's the commission for that one?

I don't know if dishonesty or just incompetence, to give you an idea, I was never given the Key Facts for the first mortgage (you know, that illustration that you guys have to give), even thou the fact sheet clearly states:

"We are required by the Financial Conduct Authority (FCA) - the independent watchdog that regulates financial services - to provide you with this illustration."

The fact sheet extract you have above is from the second mortgage which was done by another advisor (his manager).

ACG

Natwest pay me even less, funny as I have also used them more than Virgin too.

0.3% I get form them.

I have just realised the figures i have given you are after my network takes a cut so they are a little higher than that but the principle still stands in that it makes so little difference its not worth worrying about - just goes to show how rarely I check it by the fact I dont even understand the sheet they are on lol.

winkiwin

The pass indicated on the report has no connection to suitability rather it just shows products that have passed the filters the IFA has set. e.g. fixed mtg / 3-5 years