Nationwide Mortgage Interview - Query

kate98_2

I recently had my mortgage interview on the phone with the Nationwide mortgage advisor.

I was given some options of mortgage year fixed rates and mortgage terms over the phone but when I expressed a preference for a 5 year fixed rate over 30 years I was told that I wasn't allowed to choose the mortgage duration and could only make my own choice if I did the application online rather than via his financial advice on the phone.

This led to me being pushed into a 10 year fix over 29 years increasing the amount I was happy to pay per month. As I was told I couldn't have 30 years at a 5 year fix as I have too much monthly savings? Is this correct?

Thanks

glosoli

There are two things here:

1) The mortgage adviser has to establish the objective for your term. This could be, for example, minimising the repayments until retirement, or it could be having the repayments around your specific budget. Did you tell him your budget, and explain what you were using your surplus income for? I.e you were happy to pay £1000 during the fixed rate period, and wished to keep the remainder for savings, investing, so on and so forth. If you said something like that, and they recommended you a term which gave you repayments higher than that, and if you said you were not comfortable with the repayments, it does not sound right to me.

2) In regards to your preference for the fixed rate, did you specify why a five year fixed rate was best for you (putting interest rates aside). An example might be you wanted a five year product as this ties in with when you wish to make a reduction to the mortgage balance without penalty, or you considered a fixed term longer than this too inflexible, in case your circumstances changed in future, or this tied in with when you wanted to move house in future. Again, he should have listened to the underlying reasons as to why you required this product. If you expressed good reason as to why a five year fixed was best for you, rather than a ten year, then again, this doesn't sound right to me.

amnblog

You went up the 'wrong leg' of the flowchart.

Go to a broker and get your mortgage set up in a way that is right for you on your preferred terms.

Thrugelmir

Was 29 years the maximum mortgage term that the NW would offer you? Does this take you up to your state retirement age?

kate98_2

We said we would prefer the 5 year fix as that was a more comfortable repayment for us over 30 years, and in our budget. He said only 25 years at 5 year fix would be available.

We were told that the underwriters might be concerned if we change our budget now even though we had always said that our budget was based on the 5 years and he said that 10 years was the only option to take. Stating the underwriters would listen to the phone call and find it concerning that we are wanting to change? Would this be correct?

He suggested that as we are putting £1000 a month into savings, this is too high.

We are in our 20's so it isn't lending into our retirement. We don't want to jeopardise our application but would have been happier with our preferred option.

amnblog

Dump them and get yourself some advice you can fathom.

glosoli

You need to explain to him further justifications for a five year product rather than focusing on the monthly repayments. Think of reasons as to why a ten year product would be unsuitable for you. If you explain this to him with good reason, and he continues to recommend a ten year product to you, in my opinion this would constitute bad advice.

Secondly, mortgage advice is not the realm of an underwriter. Mortgage advisers give advice, i.e it is why we have qualifications, and why we are regulated, and underwriters approve credit applications. I do not see why the underwriter would have an opinion on this.