the *perfect* remortgage lender

SouthLondonUser

Yes, sure, brokers are regulated, but… there is always a certain degree of subjectivity in determining which product is more suitable and why, right? One could always argue that a given mortgage was slightly more expensive but had a greater chance of being approved, or maybe had lower prepayment penalties so greater flexibility, or whatever.

Don’t get me wrong, I am not suggesting there is an epidemic of brokers lining their pockets recommending unsuitable products. I am simply suggesting that approaching a middleman, any middleman, with a modicum of information about the sector never hurts.

SouthLondonUser

PS But maybe it’s just me being paranoid After all, I do my MOTs in shops that don’t service my specific brand, so I know they have no incentive in finding non-existent faults to fix!

kingstreet

SouthLondonUser wrote: »

Yes, sure, brokers are regulated, but… there is always a certain degree of subjectivity in determining which product is more suitable and why, right? One could always argue that a given mortgage was slightly more expensive but had a greater chance of being approved, or maybe had lower prepayment penalties so greater flexibility, or whatever

But there is no absolute. We are objective. Our clients impose their subjectivity on us and rightly so.

How we determine the best deal is by discussion with the potential client. I can tell you what I think is the best deal and give the reasons why I think that. However, if you as the client have different priorities you will probably not agree.

Let's say the lowest rate for a five year fix is 2%. This product allows you to overpay by upto 10% of the outstanding balance each year. Another is 2.2% but it allows overpayments of 10% of the initial loan each year. Finally, the third deal is 2.3% but it allows 20% of the outstanding balance.

The absolute is deal one is best because it has the lowest rate. On discussion with the client, deal three suits him better. It's the best deal for him because he wants to be able to overpay more without penalty.

Then we have lender service and in my sector the need to exchange contracts in 28 days. Then we have fees to consider, criteria and so on.

Only by communicating with the client can we establish what is the right route and therefore there can never be 'a one size fits all' conclusion.

As a consequence it's virtually impossible to select a lender for commission reasons and it would be extremely dangerous because as we've already identified there is so much information and competition. Most of us would rather have 100% of something by offering the best overall deal, than nothing by favouring a particular lender which pays more where the client can find an obviously better alternative himself.

When all is said and done, we have to justify what we have recommended and at any time in the future, the client can complain and we have to shell out £550 for someone to determine if what we did was correct.

getmore4less

Axieros wrote: »

@getmore4less:

42K salary, 6.3K annual bonus, 7.2K child support

I'm trying to get £215K for the new mortgage; property value £400K+ based on recent sales

monthly outgoings:
£290 childcare costs (using the new tax free childcare program), one child. This will reduce to £0 by the end of this school year (secondary school age)
£200 pension contributions; these are optional - I can temporarily stop them if needed
£124 oyster card
£102 council tax
£76 service charge and ground rent

£10.9K cc debt @ 0%, no other loans or debt. This will drop to less than £10K by the time I actually re-mortgage; I pay £400 at the moment towards the CC debt, more than min payments which are 2.25% of the balance.

@kingstreet: thanks. Your post reassures me that it's worth going through a broker

@NinaSwiss: thank you. Just an idea of the fees helps, I genuinely don't know what to expect, I haven't been in the market in a while...

What's the current mortgage key information?

You say the debt is old going down slowly why?
One year of bonus would have nailed most of it.

Where is all your money going.

You want to borrow more and consolidate.

You can probably get this wrapped up to look attractive but there is a lot of money going somewhere not on your limited list.

........
edit: to add some numbers

base net £2600pm with bonus less the pension as that's at 40% £2,800pm
add the child support £3,200/£3,400

£215k @ 2% over 20y £1090pm, 25y £915pm

your mortgage is currently smaller by at least £10k + your extra borrowing

if we say £1k now and the £500pm from above costs, another £400pm to feed and pay the bills + the £400pm on the current £10k CC that's still £900-£1,100pm to account for.

Should be doable but if you really are spending all your money with the smaller mortgage where do you cut back?

glosoli

amnblog wrote: »

Regulated sector.

A Broker has a responsibility to recommend a more suitable product where it is available. A Lender does not.

If a bank does not have a product which is suitable for the customers circumstances then the mortgage advisor cannot make a recommendation.

copperclock

Have you got any scope for holding off on the extension for a year or two while you pay off the debt? Doesn't seem like a great idea to turn 0% unsecured debt into long term debt on your home carrying interest.

Even if you got half of it paid back it might open your options for the mortgage/extension money in the not-too-distant future.

Good luck whatever you decide.

amnblog

glosoli wrote: »

If a bank does not have a product which is suitable for the customers circumstances then the mortgage advisor cannot make a recommendation.

The Lender can quite legitimately 'sell' a product that costs 50% more than a competitor's product. A Broker has to 'advise' the client of the better rate.

For example we have clients who had adverse credit when we placed them two years ago. Now the credit has cleared out and the current lender has legitimately offered them 3.79% going forward. We will place them closer to 1.79% now that they qualify for a wider range of lenders.

jim2334

We are just waiting on the offer for a five year fixed (1.83%), £995 fee with Tesco. We went direct to the lender and its been fairly simple.

Filled out initial application online, got an agreement in principle. Then got a hard copy printed off and witnessed signed, ID verified (post office) - sent in payslips and one months bank statements. The next week the valuation came through and the underwriter gave us a green tick for affordability. Now just need to sign the offer and send to the surveyor (which was provided by Tesco) and it will all be done.

I don't think a broker is needed unless you're in a difficult position credit wise, or found you already had a a failure, or are just to unsure of the process. We used a broker as first time buyers, and they were very helpful, but for the remortgage we did it ourselves.

If you have a decent credit score and your finances show you can afford repayments, its a pretty simple process to go through if you know how to use search comparison sites and interpret the different deal variables (fees, APR etc)

robatwork

If the perfect one existed there wouldn't be others.

Here's some names:
HSBC
Coventry
Yorkshire BS
First Direct

Although the best rates for long fixes have steep fees ie. > £1000

What you're asking this forum is to do your research - you need to put in the legwork or.... use a broker.

I'm not a broker.

Axieros

@getmore4less: the old debt is because of family issues, I don't need to go into details, not relevant here. It was much higher, it's been decreasing steadily for the past 2 years, and I don't have new debt.

My query was more like - are there lenders who will take on this new mortgage, under the circumstances? Total net monthly income is ~ £3400 (bonus and chd support included). Current mortgage payments are less than a third of that, they're £1020 at 2.4% fix, which ends in 3 months time. 21 years left.

The new mortgage payments would be lower even with debt increased, because rates are now <2% - if I can access them, that is. My plan was to overpay the new mortgage monthly (by the amount I'm now putting on credit cards anyway, which are £400+ at the moment).

@robatwork: from your list, I believe none of those lenders are taking into account child maintenance when checking affordability, unless it's backed by a court order or CSA order, which I don't have. All I have is 3+ years of bank statements showing regular payments.

@copperclock: I could wait but I've already waited and both the kitchen and the bathroom are in a sorry state, and I don't mean cosmetic, the bathroom tile is literally falling.