Just about to take the plunge....

MountainMan101

My partner and I have just decided to take the plunge into the world of house buying. I'm just preparing for stress of the period because a week before a house convinced us we want to get a mortgage I had started switching my bank account to make more money and dumping the remaining 11 months of a car loan onto a 12 month 0% credit card. And on top of that my savings for the house deposit are in shares and they've had a bit of dip.

Yesterday we went and saw an "independent" FA based in an estate agents. She was pretty good at explaining it all and she did come up with the same result for the cheapest 2-yr fixed mortgage and cheaper than I found for 3-yr (mainly because I hadn't considered really high fee >£1000 regardless of rate). The estate agent is one of the Sequence group.

The catch was that whilst she picked the best mortgage from millions, they use a single supplier for each of life, b&c and crtitical illness insurances (life and critical illness separately and two policies not a joint). So she was looking at 5 commissions for these and about £100 a month (Direct Line £50, Cavendish ~£30 but haven't compared level of cover).

Now I'm quite happy to do the mortgage with her (although I'm looking at a few that weren't included in her search) - I'm not quite clear what we can haggle with her - would we be better approaching the lender directly, she did our Decis in Prin through Nationwide.

We'll almost certainly go elsewhere for insurance (unless she can cuts the costs or save us elsewhere). She recommended a solicitor but did say they weren't the cheapest - so how do we find the cheapest and is there much to be saved vs value for money. They do offer a no exchange no fee policy.

Is there anyway to cut the cost of surveys (we want the home buyer one, although the seller is a builder and has done great work it's 40 years old and we'd like someone to poke around. Also, the same for searches are they a fixed price?

Thanks for any advice proffered. I'm quite happy to try and keep reporting back as some kind of MSE guinea pig.

Philip

homer_j_3

MountainMan101 wrote: »

Yesterday we went and saw an "independent" FA based in an estate agents. She was pretty good at explaining it all and she did come up with the same result for the cheapest 2-yr fixed mortgage and cheaper than I found for 3-yr (mainly because I hadn't considered really high fee >£1000 regardless of rate). The estate agent is one of the Sequence group.

They are not "independent" - They offer mortgages from a panel of lenders and from a discussion I had with one of their advisers about 6 months ago, it was something like 20 lenders and do not charge a fee.

This could have changed since then but the true "independent mortgage advisers" will charge a fee for the advice they provide and rebate the commission that they receive.

The catch was that whilst she picked the best mortgage from millions, they use a single supplier for each of life, b&c and crtitical illness insurances (life and critical illness separately and two policies not a joint). So she was looking at 5 commissions for these and about £100 a month (Direct Line £50, Cavendish ~£30 but haven't compared level of cover).

Not entirely sure that I understand you fully on this point with regards to looking at commissions? Do you mean if you were to take up the policies, she was looking to receive 5 lots of commissions? Anyway, no advice should be based on this, if cover is required then it should be recomended and in such a manner that is deemed the most suitable for your specific situation.

If they only use one insurer for their insurance, why have you mentiond direct line and cavendish? They should provide you a quote from this.

Now I'm quite happy to do the mortgage with her (although I'm looking at a few that weren't included in her search) - I'm not quite clear what we can haggle with her - would we be better approaching the lender directly, she did our Decis in Prin through Nationwide.

If you are looking at ones she hasn't recommended that to me says that you do not think she has found you the best deal and this may stem from the fact that she works from a limited panel and is not looking at as many lenders that a true independent could.

Do not take money saving as using brokers and going direct as you will not be able to haggle with the setup costs - these are fixed and non-negotiable. Your broker should complete all the paperwork for you and do all the legwork so unless you fancy doing all that and having someone to deal with any issues that may crop up, I would avoid doing this.

We'll almost certainly go elsewhere for insurance (unless she can cuts the costs or save us elsewhere). She recommended a solicitor but did say they weren't the cheapest - so how do we find the cheapest and is there much to be saved vs value for money. They do offer a no exchange no fee policy.

This is a typical situation with most large estate agents. We have a similar arrangement. Cheapest isn't always best but the only way you can work out which is right for you is by going around a few local solicitors and getting full quotes from them. Ask the EA for the differences in service like - no exchange, no fee. Is it a fixed price, do they give you the next lot of searches free if this transaction doesn't go ahead for some reason? What are the opening hours, do they fit better with your working patterns. You may be better going local or you may be better going through a distant one like the EA's sols but its whether you buy the additional extras and value them at the difference in costs.

I would maybe go to a adviser for the insurances where they have access to at least 5 insurers to give you a better choice as their are differences in insurers and cheapest isnt always best but you need to be careful of expensive could be large commissions being paid to EA and the cover would be cheapest elsewhere if you see what i mean.

Is there anyway to cut the cost of surveys (we want the home buyer one, although the seller is a builder and has done great work it's 40 years old and we'd like someone to poke around. Also, the same for searches are they a fixed price?

Thanks for any advice proffered. I'm quite happy to try and keep reporting back as some kind of MSE guinea pig.

You should be able to arrange the homebuyers through the lender and usually this will work out cheaper because you are not paying for 2 people to do 2 separate visits but you could always ring around for quotes to local surveyors.

Philip[/QUOTE]

MountainMan101

Thanks for the reply. Just to clarify - I was searching other offers online just to check what she said was true. She needed a calculator to do things like work out 1% or 5% of values, so I had a slight mistrust.

Also, I understand what an independent adviser is - that's why I used " " around independent. Thanks for the info on surveys - they can organize the better survey and only pay the extra cost not 2 surveys, so I'll do that.

As for solicitors - I've got more info on theirs now - they have 7 day a week contact, and both myself and partner work 25/30 miles (in opposite directions) from what is "local".

And yes I think she was setting herself up for 5 (or maybe 3) commissions for insurance as she was doing separate policies for each of us for life assurance and critical illness. The Direct Line and Cavendish quotes were some I found this morning.

Is she likely to make it harder work if we don't do the insurance through her? For the first year is getting building and contents through her to make it easier as the mortageg company will need to see proof.

Thanks
Philip

homer_j_3

no problem.

With locations of work as they are, you may benefit from using one that operates over phone and through post. You could use someone like econveyancer http://www1.utdgroup.com/legal/client/home.asp or you could do a google search for conveyancing companies. It is likely that you will get cheaper as the EA will be getting a kickback on the cost but the EA may argue that they can keep control of the process if you use their solicitor. I personally would be comfortable using my own choice but I am confident in this through my job.

You do not need to take ANY insurances out with the broker but as I said, how do you know what is good or bad. You need professional advice on protecting yourself as often trying to DIY in this area, unless you are in the know, you will be more than likely to get something that doesn't cover you correctly and/or will never pay out.

I wouldn't imagine why she would make your mortgage anymore difficult for not doing insurance but if you feel she does, you can always use the complaints procedure that she will have explained to you in the key facts document that she issued to you. If you are buying through them, they will want to get the mortgage through asap also.