First time mortgage questions

byeo

Hi everyone,

I'm close to my deposit target but I have a few questions I'd like answering if possible.

I've been saving notes plus £1 & £2 coins in a jar for the past year, I've probably only got around £350-£400 saved but I plan to break the jar and deposit it into my savings, would this look "dodgy" when they check my accounts out or because it's a low amount will they not care and are more worried about larger amounts?

Also, I have two credit cards, one is a HSBC 2k limit with a £0 balance and I also have a First Direct (HSBC) credit card with a 7k limit and £0 balance. Even though both balances are £0, would two cards go against me or are they more concerned with the actual balances on the cards? I don't have an issue getting rid of one but I would like to keep one for an emergency.

Thank you

MortgageMamma

First question - won't be a problem as its not a large amount

Second question, no problem if a zero balance but any positive balances will affect your mortgage affordability

I see you are a first time buyer. I know this forum is a great help, but you should get some professional advice before you take your first mortgage. It can be very stressful if it goes wrong. A good broker will educate you about the process and products and next time around, you will be armed with the knowledge you need.

Most brokers will look at your circumstances and help you work out how much you can afford to borrow and the monthly payments for free. We can then find a mortgage to match your personal circumstances and do all the legwork.

MM

byeo

MortgageMamma wrote: »

First question - won't be a problem as its not a large amount

Second question, no problem if a zero balance but any positive balances will affect your mortgage affordability

I see you are a first time buyer. I know this forum is a great help, but you should get some professional advice before you take your first mortgage. It can be very stressful if it goes wrong. A good broker will educate you about the process and products and next time around, you will be armed with the knowledge you need.

Most brokers will look at your circumstances and help you work out how much you can afford to borrow and the monthly payments for free. We can then find a mortgage to match your personal circumstances and do all the legwork.

MM

Thanks for the quick response.

Would a positive balance effect the mortgage for the worse? I don't plan on having a positive balance but it's nice to know what's what.

I do plan to speaking to a broker, I plan on giving London & Country a call firstly, heard good things about them.

MortgageMamma

Hello Byeo

Having a positive balance would affect your mortgage affordability but proportionately. For example there is a big difference on how a £5k balance would affect a mortgage as opposed to a £1k balance. Lenders all calculate mortgage affordability differently.

As a first time buyer I feel obliged to tell you that the service from London and Country can be patchy. They are a huge phone based mortgage brokerage and the experience levels of their advisers varies. You can get good ones, you can get some that aren't great but one thing I think you need to consider is would you rather sit down with someone and have a conversation face to face, build a bit of trust, have enough time to ask all the questions you need to, and be able to speak to the same person every time? If so, find a local broker/mortgage adviser to help you.

To L&C you are just a number, you are insignificant because they deal in large volumes. I honestly think you would get far better service using a local broker, and not just that, when you come to remortgage in a few years time, the chances are that local broker that you have a good relationship with will remember who you are and will be on hand to help you via any new circumstances, life changes etc.

You can't put a price on that sort of relationship with a professional - so consider having a real advice, not being rushed through a process for the sake of saving a couple of hundred quid.

byeo

MortgageMamma wrote: »

Hello Byeo

Having a positive balance would affect your mortgage affordability but proportionately. For example there is a big difference on how a £5k balance would affect a mortgage as opposed to a £1k balance. Lenders all calculate mortgage affordability differently.

As a first time buyer I feel obliged to tell you that the service from London and Country can be patchy. They are a huge phone based mortgage brokerage and the experience levels of their advisers varies. You can get good ones, you can get some that aren't great but one thing I think you need to consider is would you rather sit down with someone and have a conversation face to face, build a bit of trust, have enough time to ask all the questions you need to, and be able to speak to the same person every time? If so, find a local broker/mortgage adviser to help you.

To L&C you are just a number, you are insignificant because they deal in large volumes. I honestly think you would get far better service using a local broker, and not just that, when you come to remortgage in a few years time, the chances are that local broker that you have a good relationship with will remember who you are and will be on hand to help you via any new circumstances, life changes etc.

You can't put a price on that sort of relationship with a professional - so consider having a real advice, not being rushed through a process for the sake of saving a couple of hundred quid.

Thank you, that's good to know, I'll have to start searching for local brokers. Is there a database of brokers by region or is it a case of searching Google?

MortgageMamma

There are websites you can use - I work in Buxton but thats probably a bit far from you

You can use vouchedfor thats an OK one
Also cherryfind
Unbiased.co.uk

The best thing to do before you select a broker is read reviews and if looking for one in your actual town, talk to people you know and see if they can recommend someone. Make sure you feel comfortable with them and that they give you plenty of time and explain all the process properly.

Don't forget to search also for independent financial adviser not just a mortgage adviser/broker, and most IFAs do mortgages also and there could be a good one on your doorstep.

Typical fee's are around £275-£495, anything more for what you are needing would be excessive. There are brokers (Like L&C) that don't charge fees, but if you only want a small mortgage you are running the risk of bad service again.

byeo

MortgageMamma wrote: »

There are websites you can use - I work in Buxton but thats probably a bit far from you

You can use vouchedfor thats an OK one
Also cherryfind
Unbiased.co.uk

The best thing to do before you select a broker is read reviews and if looking for one in your actual town, talk to people you know and see if they can recommend someone. Make sure you feel comfortable with them and that they give you plenty of time and explain all the process properly.

Don't forget to search also for independent financial adviser not just a mortgage adviser/broker, and most IFAs do mortgages also and there could be a good one on your doorstep.

Typical fee's are around £275-£495, anything more for what you are needing would be excessive. There are brokers (Like L&C) that don't charge fees, but if you only want a small mortgage you are running the risk of bad service again.

Sorry for all the questions but why should I choose a Broker who charges a fee over one who doesn't?

I was under the assumption that those who don't charge a fee get "paid" from whoever they recommend and I eventually choose whereas someone who I'm paying couldn't care less as they get their fee either way?

amnblog

byeo wrote: »

why should I choose a Broker who charges a fee over one who doesn't

Why buy a BMW when a Dacia still rolls down the road.

It’s about VFM.

[Deleted User]

under the assumption that those who don't charge a fee get "paid" from whoever they recommend

Correct - now think which product an unscrupulous or lazy broker could choose to recommend. Would you expect that to be the best for you, or perhaps the best commission for them? Would you really feel in a position to go against their recommendation with your level of knowledge in this field?

Not all brokers are like that of course, and for a FTB the value of a good broker is well worth the fee both in terms of the process and the hand-holding/explanations if something unexpected happens and you need it.

byeo

So a "free" broker could already have a bank they want me to go to as their "preferred choice" (even though it's my decision). Whereas one who I'm paying has to work for that fee so will do their best to get what I really want/need?

When do brokers get paid, before or after?