Help to Buy - IFA or specific FA for advice?

buel

Hello,

My wife and I would like to buy a house (freehold) using H2B, although we consider our chances low being as;
- She is on maternity leave until October
- I’ve just changed jobs
- We owe £17k on loans and Credit Cards

Positives are;
- Our combined salary is £62,000
- Our credit records are very good with no missed payments
- The house/s we are interested in are around the £215,000 mark but we can raise the £11k needed for the 5% deposit.
Would it be better to see an IFA or a specific FA who deals with H2B schemes for advice?

Edit - one thing that concerned me about the plot we are looking at is that there is a ‘management fee’ for the upkeep of the play area that is being built next to the houses. Am I right in thinking that these type of things can sometimes increase in cost with no regulation in place?

ACG

Speak to a Mortgage Advisor/Mortgage Broker.
Financial Advisors or IFAs are usually more pensions/investments than mortgages.

SonOf

Most IFAs do not personally give mortgage advice. They will either have access to or employ mortgage brokers within their business or refer to a third party to do it.

So, a whole of market mortgage broker (who may happen to work within an IFA firm but many do not) would be your target choice.

buel

Thank you, both.
Best to pay a fee rather than any other options?

SonOf

Best to pay a fee rather than any other options?

If its a very large mortgage, then fee with commission rebate is a good option to take. A smaller option would be better with commission option.

If you are in an area of low house prices then its normal for the broker to have a small fee as the commission is going to be low. Typically around £150-£500 is the ballpark.

buel

Thank you. My wife just rang a local mortgage broker and he said that because my wife is on maternity leave then it leaves a small pool. Then he said that he will ‘do some digging’ and see us tomorrow for a free consultation!?! How does that work?

kingstreet

As an experienced newbuild and HTB equity loan specialist I'd say there is more than a handful of lenders open to someone on maternity leave with a simple process of evidencing income and confirming any future childcare costs.

Lender and the HTB affordability calculators will take the debt and the HTB loan into account and will tell you what you can borrow and therefore your maximum purchase price with the deposit and loan added.

Our usual fee is £250 but for our "partner" builders we waive our fee, so we work from commission-only on such cases, regardless of the size of the mortgage. We give the same standard of advice and arrangement either way.

Many builder specialist brokers work the same way.

An estate charge for communal areas is normal these days as local councils won't take responsibility, despite the council tax take from the new properties. Check these are not onerous before making a commitment to purchase.

buel

Really brilliant stuff! Thank you!

buel

kingstreet wrote: »

As an experienced newbuild and HTB equity loan specialist I'd say there is more than a handful of lenders open to someone on maternity leave with a simple process of evidencing income and confirming any future childcare costs.

Lender and the HTB affordability calculators will take the debt and the HTB loan into account and will tell you what you can borrow and therefore your maximum purchase price with the deposit and loan added.

Our usual fee is £250 but for our "partner" builders we waive our fee, so we work from commission-only on such cases, regardless of the size of the mortgage. We give the same standard of advice and arrangement either way.

Many builder specialist brokers work the same way.

An estate charge for communal areas is normal these days as local councils won't take responsibility, despite the council tax take from the new properties. Check these are not onerous before making a commitment to purchase.

Thank you again for this.
Could you please offer some advice on whether the fact I’ve just changed jobs is an issue? I have a contract as a teacher so it’s decent money, etc. I’m just concerned that the changing of jobs might add to any concerns regarding the maternity leave.
Thank you.

Also, being as we have scraped the deposit together, are there many more fees payable?

Retired_Mortgage_Adviser

Wife's maternity leave - not an issue as long as you can get a letter from the employer confirming return to work date and salary

Your job change - a brand new job (on probation) might eliminate a few lenders, but again not an issue. You mention a contract, is it an FTC or a permanent one?

17k debt - will reduce affordability but with 62k income and the house price you're looking at, it shouldn't be a problem.

Given the maternity, your broker will ask you for an estimate for childcare costs to factor in the affordability, or alternate arrangements (grandparents, etc). If you have to pay for childcare, it may impact the affordability significantly. When making an estimate all it needs to be is reasonable.

Based on the very limited information in the thread, it appears to be a fairly straightforward case and you could well use one of the fee-free brokers recommended on the MSE page here.

Other fees - solicitors (around £1000-1500), mortgage product fee (if applicable, can be added to the loan), moving costs, etc.

buel

kingstreet wrote: »

An estate charge for communal areas is normal these days as local councils won't take responsibility, despite the council tax take from the new properties. Check these are not onerous before making a commitment to purchase.

Thank you for the advice you gave. The meeting with the broker went well!

On the above, what would be acceptable? I think I was quoted £120 per year?