Mortgage for first time buyer

Moneypenny83

Hi all, I’m after a bit of advice. My husband and I are currently trying to get a mortgage for a new build house we have found (first time buyers). We are hoping to use the help to buy equity loan. The house we’ve found is a new build and the developer states in order to get the free legal fees we have to use the broker they recommend. We had a meeting with the broker who took all of our details etc. We then heard back from her after she tried to get a decision in principle for us, but it failed due to my husbands credit file having a default we didn’t know on it from 2.5 years ago. Since then she has been very poor at contacting us. We heard back from her yesterday and today she applied to the same lender again for a DIP! Of course it was unsuccessful again. She then said she would be with clients for the rest of the afternoon so would approach another lender tomorrow. She is thinking of approaching principality, but I have researched this lender this afternoon and they do not accept child benefit as income, which would lower our affordability below what we need it to be for the house we have found. I just wanted some advice as to whether this is normal? She seems to have made several errors, not advising us to check all of our credit files before an application (we checked only Experian as we didn’t know about check my file) and applying to the same lender twice and also being poor at communicating with us. We have been with her for over a week now and she still hasn’t got us a DIP.

I have, in the mean time, been in contact with another broker (simply adverse) and they have managed to get us a DIP after 2 days of me contacting them and are ready to apply for a mortgage for us when we are happy to do so. Unfortunately they charge £1995 for their service so I was hoping our first mortgage broker would be more successful so we could avoid a fee. We would also have to pay our own legal fees which is another £1000.

I am a doctor in the NHS and have a fixed term contract so this seems to limit the lenders we can approach and now we have learnt of my husbands default which adds another issue. We need someone who will approach lenders who are appropriate for us and our situation but I now have no faith in our original broker. I just wanted to know if this is normal for a broker or not? Am I being unfair to our original broker? £1995 is a lot of money to pay, but they do seem to be much more focussed on us and on getting it sorted.

Thanks in advance!

MovingForwards

Rule number one - never use a broker / solicitors recommended by a developer / estate agent.

Rule number two - you get what you pay for.

Do you think you have had good service from broker one?

£2k is a fair amount of money but look where £0 got you.

Would you be happy with broker one stabbing in the dark? Or would you prefer a broker who actually wants to help you?

rijack

As mentioned, you will read all over the internet to never go with the people the developer, EA etc. recommend.

Broker wise, there will be plenty out there who are good at what they do. I personally used L&C, they are free and get their commission once you're placed into a mortgage so there is incentive for them to try to place you in appropriate products. That being said, an independent who might charge a fee may give you a better personal service.

It's worth just looking around at reviews and recommendations to see where you might end up really. A good broker i assume will be able to point you towards lenders who may not put so much bearing on a default but it will likely depend on what it was for, and the amount. A small phone bill that is settled is much less likely to have negative impact than a £20k personal loan of which you still owe something.

csgohan4

if you have an adverse credit history, good brokers will charge, not sure that high though. L+C/Free brokers I would not recommend for more than out of the normal cases like yours.

Moneypenny83

Thanks for your responses. The default was for £200 British Gas bill. I agree it seems appropriate to pay a good broker who will find a lender who suits us, just finding the fee hard to stomach and then the legal fees on top. We have already signed a reservation form with the developer and on it it states that they will pay our legal fees, with no mention of us having to use their recommended broker, so I wonder if we can hold them to this?

Verix

On a purely personal basis I would say £1,995 is right at the top end of broker fees and for such a small default i'm surprised a 'normal' broker wouldn't be able to help you. I assume the simply adverse broker is aware of the fact you want to do help to buy and has factored that in to who the DIP is with? You would expect there to be a difference in the level of service between a fee free broker and someone charging £2k.

In terms of the legal fees issue, I would speak to the builder. Explain you've not had great service from their recommendation and you don't think they'll get everything sorted in time for you. They may be able to recommend someone else or allow you to find your own broker whilst still paying the fees for you.

Generally speaking I would advocate at least speaking with the recommended broker because in the case of new build they should be experienced with the different criteria, help to buy applications and time frames required. I don't see that having a relationship between an estate agent/developer and a broker is an inherently bad thing. It means the developer knows who to get in contact with, and in this instance, who to shout at to get things sorted more quickly.

Good luck with it and let us know how you get on.

katherz44

It's definitely worth doing lots of research before you rush into anything.

As other's have said, be wary when using services linked to the developer as they don't tend to have your best interests at heart. I would avoid using their recommended solicitor at all costs. Again, do lots of research, trust pilot and which! are also great online tools to help compare.

Speaking from personal experience, we actually decided to use the mortgage broker who our developer recommended as they had such positive online reviews, but we did lots of research before hand. We're using Meridian Mortgages, and I would recommend them... they make their money from the lender after completion.

Although we don't have any defaults, I do have historic late payments and high credit utilization but our mortgage adviser was great, very knowledgeable and placed us with Halifax. We were accepted right away and now awaiting valuation and our mortgage offer.

Moneypenny83

Thanks for everyone’s comments, they’ve been useful whilst we’ve been deciding which broker to go with. We heard back from our original broker (recommended by developer) and she has managed to get us a AIP with Principality and we went on to submit a full mortgage application last Friday. So fingers crossed she’s made a good choice for us.

There’s a hard search showing on credit files for the AIP with Principality, does anyone know if passing this makes it more reliable than a soft search and wether it makes a full application more likely to be successful. I’m pretty sure that our broker was upfront about my husbands default from the start, so hopefully nothing to worry about but this whole process is proving quite stressful.