First time buyer - HSBC mortgage or go with broker

MancChris

I'm a first time buyer and I've just put in an offer on a house. The broker recommended a mortgage for us with Virgin (quite fitting for my first time. Ahem...). It's fixed at 3.03% for 5 years, then goes to the SVR of 4.99% for two years, before a discount of 0.25% is added meaning it would be 4.54% (as it would affect the current rate, I know this can change). Fees of £995 to be added to the mortgage.

Using the tools on MSE I've seen what looks like a really good option with HSBC (who I bank with, although the joint account with my partner is TSB, who she banks with personally). The best looking option there is fixed rate of 2.88% for 62 months then their SVR of 1.99%! The fees are massive though, £1877. But still, looking at the longer term this seems fantastic. Is there anything I am missing?

I know the broker takes in to account your personal circumstances, but could it also be missed if HSBC isn't available through a broker?

Also, I was a bit concerned because I asked him if we needed a mortgage offer in place before putting in an offer on a house, and he said no, you do that once an offer has been accepted. Since then, literally anyone I've asked who's been through the process of buying a house said you need an offer in place. I put this to him and he said in all the years he has been a broker he has never done that. I know friends are not the experts, but still, what do people think? The estate agent has asked for a copy of the offer letter, and there have been other bids as well, so I'm concerned i could miss out if i don't get an offer in place.

libf

Your friends probably have an AIP, not a mortgage offer, when they're making offers on houses. An AIP is a general indication of how much will be lent, a mortgage offer is specific to a property.

It may not be a good idea to show the AIP to the estate agent if it's for a lot more than you're willing to offer. Instead get them to speak to the broker to confirm it's possible.

FTB12

Agree with libf, We had the AIP for when we were offering on a house then when the offer was accepted applied for the full mortgage.

betmunch

Its just the AIP you need to put an offer in.


And its not needed, but it is good practice. Along with having your conveyancers ready to go.


HSBC and TSB are only available on a limited distribution to brokers so it is possible that yours didn't include them, you just need to ask.


HSBC have a reputation for knocking back the loan available after a month of underwriting so watch out for that.


TSB get a much better review from my sources that can use them.

amnblog

Chris

Your searching for product details does not take in to account your financial situation and whether either HSBC or TSB would lend to you.

Your broker is obviously confident Virgin will lend to you.

If you have queries, your broker is the best place to air them.

If you run off on your own seeking a deal with HSBC or whomever you may find yourself with no mortgage and no new home.

ACG

HSBC d not deal with brokers so your broker would nt include them.
TSB do not deal with every broker so your broker MAY not deal with them.

Your broker will have taken your circumstances in to account when making a recommendation - which in all honesty seems odd in itself if you have not found a property. The purchase price/LTV/rates etc may differ between now and when you find somewhere.

Have you checked whether HSBC/TSB would accept you?
When I do my research I find out what is coming up best and then cross check the clients circumstances with the lenders requirements and work my way down until we get a match.

Also your friends will be talking about an AIP (Agreement in principle) or DIP (decision in principle) both the same thing and both not really worth the paper they are printed on. Some estate agents do insist on them but not all.

dunstonh

HSBC cherry pick. So, if you have potential issues or are pushing criteria, then HSBC may not be the lender for you.

As stated by others, you cannot have an offer letter without having the property. The offer letter is what you get at the end of the process. What you need now is the agreement in principle.

swindiff

HSBC I found to be very picky. Tried them first for a remortgage. Only wanted to borrow £100k on a property valued at £165k. Salary of £40k, partner's part time salary of £15k. We also have a BTL bringing in a surplus of £300/month. I filled out a spreadsheet detailing all our outgoings and incoming showing a surplus of £1160/month before any recreational spending. Remortgaging with them would have saved a further £125/month and we still managed to fail their affordability calculations.

We ended up going to a broker who got us a deal with Nationwide which was actually a few pounds per month cheaper too.