Frustrated FTB Advice needed - IFA recommended fixed rate keeps changing!

MonkeyMurphia

hi

my girlfriend and I have just had a bid accepted on a flat which we are happy with.

A few months back we were recommended an IFA who met with us one evening and was very helpful and knowledgeable and due to his previous dealings with friends we were happy to listen to his advice. He is totally independant and whole of the market.

When we told him we had an offer accepted he came back immediately with 3 fixed rate mortgages:

(d)2 years fixed at 5.79% ~ £960 pcm,

(e)3 years fixed at 5.99% ~ £979 pcm &

(f)5 years fixed at 6.19% ~ £998 pcm

We plumped for the 3 year fixed but by 6pm friday evening this had been withdrawn adn the best 3 year rate was 6.49%. So we then went for the 2 year, but today that was withdrawn and the next best 2 year rate is now 6.68%.

Which leaves us with 5 years being the best offer (b ut i'm afraid to go for it for a) length of time and b) in case THAT changes too.

In a tiz we've scoured the comparison sites to see if we can get something better. most of the lenders though will charge the higher lending fee which can equate to approx. £3000.

However i have found one called Giraffe (part of Bank of Ireland) which has a 2 year rate at 5.77% and 5 year at 5.63% but with no HLC making this the best deal we can now see.

We are confused, frustrated, tentative, all the things not ideal when trying to get on the property ladder.

Plus i've read today rumours that the interest rates could be cut as inflation is at 1.8 now.

if anyone could give me advice then that would be greatly appreciated.

herbiesjp

Whilst some lenders are indeed in the process of increasing deals - some lenders are reducing some deals and fixed rates are some of them.

A lot of these withdrawn deals can still be accessed if done in time via on-line systems.

Has the adviser come back with any fresh research for your preferred 2 or 3 year fixed rates?

MonkeyMurphia

he advised the new 3 year rate this morning and the new 2 year rate on friday evening.

herbiesjp

What figures are you looking at?

What is the property value? What mortgage amount do you need?
What are your two gross yearly basic salaries?

Do you have any other debts in the background?

dunstonh

With the recent credit crunch, the mortgage providers more reliant on borrowing to lend are finding it harder to offer lower fixed rates whilst those more reliant on savings to lend are not having the same problems.

So, its no surprise to see the deals changing as quickly as they do. Plus, you are coming to the end of the quarter and it is quite normal to see more deals withdrawn in this week before.

MonkeyMurphia

the flat is £160k and we have a deposit of £8k/5%.

our combined salaries are £47.1k and we have outgoing loans/credit cards totalling £170 per month.

have we picked a bad time for getting a mortgage? would holding out until october be advisable or a bad move?

herbiesjp

Based on those figures, and looking at deals that do not charge a HLC, there are several cheaper deals than those you mention.

Howeber wheterh or not they are suitable will depend entirely on what fees you want to pay, what flexibility you want from the mortgage, and also if you are eligible for the schemes

dunstonh

have we picked a bad time for getting a mortgage?

I dont think you have picked a bad time from your personal point of view. However, you have picked a period when lenders are tightening up and deals are less easy for them to finance.

would holding out until october be advisable or a bad move?

Deals are likely to get worse for those lenders borrowing to lend but deals using savers more to lend are possibly going to be a bit better or no different. I dont think waiting is a problem.

You also need to remember that any mortgage you buy now is quite likely to be improved upon at some point. There are around 20,000 mortgages and deals become available or change daily so sometimes you just have to draw a line and say this is what you are going for.

MarkyMarkD

If you are borrowing 95% LTV, HLC will cost you around 1.5% of the property value. Over 5 years that's equivalent to 0.3% per annum. So don't rule out all lenders just because they charge HLC.

It doesn't honestly sound like your adviser is giving you very good advice if you can source better deals than him by spending a few minutes on the internet. Saying the best 2 year fixed rate you can get is 6.68% is just silly unless, as others have questioned, you have other debts or poor credit history.

MonkeyMurphia

MarkMarkD - thanks for your input.

from the scan i did this morning the morgage from Giraffe was the only comparable one i could find i.e. without HLC. I just wonder how long offers like that are available and if the lender can withdraw it before the necessary has been done. I don't want to dismiss my current mortgage advisor for a deal i source myself only for it to be withdrawn and i'm forced to go cap in hand back to my original advisor.

MarkyMarkD

If you submit an application whilst a product is available, you should normally get that product. So the only reason that you are continually losing products is that your adviser isn't getting a completed application form to the lender in time (either on paper or more likely online).

As I have said before, fixed rates are generally going down, not up, right now so it's not a problem you should be suffering in general.