Anybody want to recommend mortgage broker for HTB Wales mortgage

dgtazzman

Hi all,

I put reservation down on a newbuild in Wales over the weekend and have been slowly working on the mortgage for it. The builders gave me the details of an IFA they recommend, I have gone through my finances with them, they have indeed recommended me a mortgage product (no application done yet, just early stage recommendation), but I think the rate of the product they are recommending to me can quite easily be beaten.

Maybe it has something to do with the fact the product they are recommending comes with GBP 300 cashback, which they will pocket on top of the commission from the lender as well as my GBP 350 fee if I decided to proceed with them.

Purchase price: GBP 192,000
Own deposit: GBP 9600 (5%)
HTB Wales equity loan: GBP 38.400 (20%)
Mortgage: GBP 144,000 (75%)
My income is sufficient to get the mortgage, that has been confirmed by 2 brokers already as I first was looking at a different house and the builders of that one had me talk to their recommended broker too.

They have recommended me a Virgin Money mortgage, 2 year fix, fixed rate of 4.49%, amounting to payments of GBP 799,58 a month.

If I do my own little search, I come up with products for between GBP 600 and GBP 700 a month (rates around the 2.2% mark for a 2-year fix), depending on the initial term, though these are based on HTB England, so I don't know if it's fair comparing.

I'd like to get a second opinion from another mortgage broker that is used to dealing with HTB Wales as I fear the one the builders recommended is trying to pull the wool over my eyes. Maybe they aren't. but something just feels off to me.

Your help is much appreciated. PM's are welcome if you are a broker and think you can help as I know you can't advertise that in public on here ^^

JPB123

If there is a cashback with the product then it goes to you, not the broker. The proc fee that they receive from the lender is in Section 13 of your KFI, plus whatever fee they're charging.

I am an Independent Mortgage Adviser

You 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.

JPB123

Also, that rate is for HTB2, the indemnity scheme, not the Shared Equity scheme. Rates at 75% LTV are less than half that.

I am an Independent Mortgage Adviser

You 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.

dgtazzman

That's what I thought, I think the broker is under the impression I own another property, while the property I own will be sold next week (completion on Wednesday), so in December, when the newbuild I'm buying is complete, I won't own another property and will, on paper, be a FTB.

I'll get back in touch with the broker and see as the figures he is giving me just don't add up.

And yes, the documentation he has given me also clearly states the cashback is going TO HIM, and not me, 300 pounds worth. His fees are listed as:

- The 350 pounds I would have to pay him
- Commission from the lender
- 300 pounds cashback from the lender

JPB123

That's not what cash back is for, unless you choose to give it to him. It won't go to him, it's passed to you via your solicitor.


You won't be a FTB again though just because you've paid the mortgage off. Like your virginity, once it's gone....


You can apply for HTB as a home owner, you just can't complete until you've sold the other property. That applies to both schemes. I think someone's made a !!!! up.

I am an Independent Mortgage Adviser

You 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.

dgtazzman

I know I'm not a 'FTB' in the sense of it, but I believe for mortgage purposes etc. I would be classed as one as I won't be moving home/porting the mortgage I have (which is a joint mortgage with my ex anyway, hence why I sold up as she wanted her name off the mortgage so she can start looking to buy with her new love interest and I had no desire to stay in the ex-marital home long term) and I'm not remortgaging. There will be a 5 month period before completion on my new house where I won't be a home owner, but renting, joy...

Anyway, maybe the cashback thing was a typo as I've now noticed on another page is actually says it will be paid to my solicitor.

Still think he f'd upped on the mortgage though, see what he comes back with tomorrow. The mortgage he is recommending does give him a nice 720 pound commission, on top of the 350 pounds I would have to pay him. Considering the amount of commission, I would have expected a reduction in the fees I have to pay, or is that my Dutch genes being greedy?

Jonbvn

dgtazzman wrote: »

Still think he f'd upped on the mortgage though, see what he comes back with tomorrow. The mortgage he is recommending does give him a nice 720 pound commission, on top of the 350 pounds I would have to pay him. Considering the amount of commission, I would have expected a reduction in the fees I have to pay, or is that my Dutch genes being greedy?

You are not being greedy. The advisor probably has to give the developer some incentive for their recommendation.

BTW, I think you should first look at reducing the interest rate, since in the longer term it will far outweigh things like cash-back and commission.

kingstreet

If the cashback is in section 12 of the KFI - additional features it is payable to you by the method chosen by the lender in question.

The commission payable to the broker for introducing the business, submitting the application, providing the documentation and seeing it through to completion is in section 13 - using an intermediary.

amnblog

Your current broker has made a fundamental mistake and is quoting you a Virgin Money product for the wrong type of H2B scheme. The 4.49% rate is for the H2B Guarantee scheme.


If you are buying under the equity loan scheme (therefore also selling all other property owned on of before completion) potential rates should run from the early 2% range.


Just engage yourself a broker who knows what they are doing.

kingstreet

I agree with amn.

I hadn't taken in the rate.

Lenders offer the same products on HTB - EL in Wales as they do in England, but the lender list is different.

Last time I looked for example, NatWest wasn't on the list.

amnblog

I have made a note about the idea of the broker keeping the cashback!


That one has some legs.