FTB - Mortgage Questions!

sgx.saint

Hello.

I am a first time buyer, with a deposit available of £41,000 to put towards a property.

I live in Glasgow and have been looking at properties between approximately £90,000 and £110,000.

I have found a property I like and have informally discussed an offer with the estate agent for around £103,500.

To achieve this, I will require a mortgage of £62,500.

I was originally planning on securing a mortgage through my bank, Nationwide, not just because they are my bank, but because they seem to have some good deals, specifically for Nationwide FlexPlus account holders.

Because rates are so low, I was planning on taking a fixed rate mortgage for between a 3 to 5 year period.

This will allow me to budget and know where I stand for the first few years of the mortgage without worrying of a rate change.

The best rate for four years with Nationwide is 2.39% and my monthly payments would equate to around £277 per month over 25 years, which according to all my personal calculations is perfectly affordable.

I am employed, earn £23,100 per year and have no other debts aside from a student loan.

I met with a Nationwide Mortgage Advisor in branch who ran through the online affordability checker, which I could have done myself if I had known that is all that was going to happen at my first appointment.

Anyway, the advisor stated I could borrow up to £69,000, which is more than sufficient.

However, long story short, the advisor in branch did not include items such as petrol and road tax in the regular travel costs box and as such, when I have redone the affordability calculation, it now means I can only borrow around £57,000 over 25 years.

So, I have a few questions that I was hoping you kind folk here on MSE could help answer.

Firstly, I could of course increase the mortgage term which would give me sufficient scope to achieve the mortgage I require.

I am 32 years old and I would be looking at around a 28 year mortgage. Does that seem reasonable?

Secondly, am I right in assuming that the affordability calculators, or specifically the Nationwide calculator, are set to use a high interest rate?

The rate I would be actually paying would be 2.39% but I assume the checker is set to a much higher rate to adapt to changes in interest rates?

Thirdly, a few people I know have suggested using a broker instead of going straight to Nationwide. Does it make sense in my circumstances to use a broker?

Fourthly, can anyone recommend a broker? I have heard good things about London & Country...

Sorry for the long post, but I could really use some advice.

Thanks in advance.

kingstreet

sgx.saint wrote: »

However, long story short, the advisor in branch did not include items such as petrol and road tax in the regular travel costs box

That's because those items aren't supposed to be entered there.

Such costs are averaged using the household figures provided by the ONS. You should only enter specific additional costs, such as a season ticket for travel to and from work.

amnblog

You can go direct but it appears you have already questioned the advice you have received from the Nationwide Employee.

sgx.saint

kingstreet wrote: »

That's because those items aren't supposed to be entered there.

Such costs are averaged using the household figures provided by the ONS. You should only enter specific additional costs, such as a season ticket for travel to and from work.

Thanks for the reply.

The in branch advisor only included the cost of my monthly rail ticket in this box.

However, when I completed the exact same online calculator, with a different advisor over the phone, they said to include road tax and petrol in this box.

So I am now a little confused as to who is correct!

amnblog wrote: »

You can go direct but it appears you have already questioned the advice you have received from the Nationwide Employee.

Thanks.

I haven't raised the matter with Nationwide, but I have questioned the advice I have received.

kingstreet

As usual you can ask three different people who work for a lender the same question and get three different answers.

"Normal" costs don't go in the box and the train costs do.

The first "advisor" was correct.

amnblog

It is starting to appear that the broker knows more about it than the Bank Staff do.


The difference is that the Bank Staff can be ignorant and still get paid - a broker cannot.

sgx.saint

kingstreet wrote: »

As usual you can ask three different people who work for a lender the same question and get three different answers.

"Normal" costs don't go in the box and the train costs do.

The first "advisor" was correct.

Very true, I'll perhaps call them again to see what I get told third time around.

With those figures removed, the mortgage amount is perfectly achievable.

sgx.saint

amnblog wrote: »

It is starting to appear that the broker knows more about it than the Bank Staff do.


The difference is that the Bank Staff can be ignorant and still get paid - a broker cannot.

Which is one of the reason I am now leaning towards a broker.

Though, in saying that, the mortgage amount required is now back in scope if those figures are removed from the calculator.

Would a broker be interested in my situation? Or am I best going straight to the bank.

sgx.saint

Okay, just off the phone to the Nationwide Mortgage advice line.

They have confirmed that in the box "Any regular monthly travel costs?" on their online affordability calculator, you should enter fuel and road tax costs.

Which again means the mortgage amount I require over 25 years is not feasible.

So I either increase the term, or swap lenders, or use a broker who will be able to help with my circumstances.

kingstreet

This place is hard work sometimes.

Here's what our BDM provided to us post-MMR in May last year;-

The modelled expenditure covers the average expenditure that would be required to run a typical household. The modelled assumptions are based on the average expenditure profile of people living in a similar household and therefore may not necessarily be reflective of the customer’s own specific circumstances. The following expenditure categories have been modelled:

• Housekeeping including food
• Utilities and telephone including mobile phone & internet
• Clothing including footwear
• Household goods and repairs e.g. household maintenance, furnishings, appliances
• Personal goods e.g. toiletries, cosmetics
• Allowance for basic recreational activities e.g. gym, sports participation
• Allowance for non-essential transport
• General insurances (e.g. car insurance, contents insurance)
• Protection costs (based on Decreasing Term Assurance)
• Equity shareholder’s monthly interest charge (calculated from declared property details)

So, since then we're submitted about a hundred Nationwide applications which all followed that pattern and every one was accepted without question.

sgx.saint

kingstreet wrote: »

This place is hard work sometimes.

Here's what our BDM provided to us post-MMR in May last year;-



So, since then we're submitted about a hundred Nationwide applications which all followed that pattern and every one was accepted without question.

Thanks. I appreciate that and it does make sense to me, however what option do I have if Nationwide are adamant that they are included?

I can't refuse to provide or include them if Nationwide say they should be included in the box.

Am I better doing this through a broker?

I think I may call London & County anyway to see whether they can beat or match the Nationwide offer anyway.