FTB: Mortgage broker advice - Offer not what I expected

NewShadow

Greetings. 

First off, I know the thing to do is to call my broker and ask him, but... 

Just had my mortgage offer land on the doorstep *yay, someone will loan me money!!* 

Thing is... the terms aren't what I expected given the conversation I had with my broker before he submitted the application - but I'm not sure if it matters/if it's a bad thing or if I should just roll with it... ?

Basically - we spoke generally twice about what I wanted from the mortgage. I think the key questions/responses were:

- how long did I want to pay it off: I want it paid off at 20 years given that's when I hit 55, but I was flexible if that was 25yrs with overpayment or 20 as term, and knew I could remortgage for a shorter term at the end of the initial period if needed. 
- would I prefer a longer or shorter fix: I would much prefer a longer fix given I value predictability/the longer the better; and I know that means a higher rate but I'm comfortable with that. 

I was expecting to have some info regarding specific rates/terms/offers available and have to pick which one to go for, but that didn't happen. I was asked if the full application could be submitted at the LTV we'd agreed, so I assumed the info about rates would happen later based on what the lender offered... but it seems not. 

Today the offer lands on my doorstep - from Halifax, and I knew we were going with Halifax so I'd looked at their website for an idea of their products and liked the look of their 5yr fix at 1.8% for 25 years with the ability to overpay so that was what I was kind of expecting... but it seems they've offered me a fix till March 2023 at 1.44% for 20 years with a £1k fee added to the mortgage - I can't remember if the other one had a product fee/if it was the same or not. 

Now - broadly speaking... is there much difference? I guess I just feel a bit 'out of the loop' in that the specific decisions re what product to go for were made without my input. For all I know this could even be a better deal - math isn't my strong suit - and it feels... petty... to bring this up as an issue. 

*Blegh* I don't know. 

WWYD? 

Any and all comments appreciated. 

kingstreet

Can only say we would have provided illustration(s) and discussed options before you decided on your chosen product/term etc. We definitely would not have done as you describe. Halifax broker and direct products are different so no point looking on Halifax website. It's simple to change product and term, the latter subject to affordability of course.

Mortgage_Adviser

The maiin thing is that the mortgage approved. I would always only apply for the mortgage product that we have agreed with the client for in order to avoid the situations like yours.

It may not be overly difficukt to change your mortgage to 5 year fixed over 25 years (Unless there was an age factor involved eg 25 year mortgage was taking you above the age of 70). Just talk to your adviser. This should be reasonably straight forward.

NewShadow

Thank you both. 

As you say - the main thing is that the mortgage has been approved and this means I can buy the house at the price I want. 

I guess the question is if changing things now is of any practical benefit - which I assume you wouldn't feel comfortable commenting on because it skirts dangerously close to advice? 

Spending some time reflecting on what I'd say to someone else if they posted this:

Having the term at 20 years, rather than 25 and overpay, is more or less the same thing - I guess I'd have the choice of not overpaying if it was 25 years and I hit a financial snag - but the monthly payment is comfortably affordable, I can change the terms after three years and this gives the possibility of paying it off even sooner...

I also don't know what the rates might be for broker products at 25 years compared to 20...? 1.44% seems broadly competitive when I'm looking at the 'MSE best buys' - that's a question to write down for the broker I guess.

It has increased my LTV from 74% to 75%, but if the rate is still competitive - and it's reduced the amount I need to put down for my deposit - has that effectively done anything other than meant I've got an extra couple of grand to facilitate moving and settling in?  

One question I guess you guys could answer - would changing the terms during the initial 10 day consideration period mean other credit search/having to provide more documents or would it be a paper exercise only?

Plus - any hypothetical examples/anecdotes from other clients that you feel would not breach professional boundaries... please do feel free to share  

kingstreet

NewShadow said:

One question I guess you guys could answer - would changing the terms during the initial 10 day consideration period mean other credit search/having to provide more documents or would it be a paper exercise only?

No. Five min job only.

EverythingIWant

Some of us can only dream of 1.44% products, I’m on 4.74% :’) 

amnblog

Really poor communication from your Broker here.

Having the term at 20 years, rather than 25 and overpay, is more or lessthe same thing - I guess I'd have the choice of not overpaying if it was 25 years and I hit a financial snag - but the monthly payment is comfortably affordable, I can change the terms after three years and this gives the possibility of paying it off even sooner... 

YES MORE OR LESS THE SAME THING
I also don't know what the rates might be for broker products at 25 years compared to 20...? 1.44% seems broadly competitive when I'm looking at the 'MSE best buys' - that's a question to write down for the broker I guess. 

MORTGAGE TERM DOES NOT EFFECT THE RATE
It has increased my LTV from 74% to 75%, but if the rate is still competitive - and it's reduced the amount I need to put down for my deposit - has that effectively done anything other than meant I've got an extra couple of grand to facilitate moving and settling in?  

YOU MEAN ADDING THE FEE?
One question I guess you guys could answer - would changing the terms during the initial 10 day consideration period mean other credit search/having to provide more documents or would it be a paper exercise only?

AS SAID FIVE MIN JOB, NO HASSLE

NewShadow

amnblog said:

It has increased my LTV from 74% to 75%, but if the rate is still competitive - and it's reduced the amount I need to put down for my deposit - has that effectively done anything other than meant I've got an extra couple of grand to facilitate moving and settling in?  

YOU MEAN ADDING THE FEE?

Hmm checking my understanding - from the offer paperwork: 

"This offer is based on borrowing  £97,500 plus £999 of fees to be added to the loan."

House value is £130,000 - Which I believe means I put down £32,500* on completion and that's it's a LTV of 75%? 

My intent - as expressed in the emails we exchanged relating to the full application and in my signature - was to put down a minimum of £33,800 to give a LTV of 74% - hence a potential loss of equity, but possibly balanced by the reduced term... 

As I said - I'm not sure/don't think I've lost out by this misunderstanding and I'm not unhappy per se - I'm vaguely reassured by the relaxed tone of the responses I'm receiving here and appreciate your time commenting  



*excluding the outstanding broker and solicitor fees, of course. 

[Deleted User]

This is so shoddy.

When I'm submitting a case I have to note the date I provided the illustration, the date I got approval to move to application, and the date application was submitted. 

I also have to send a letter that details your requirements and reasons why I couldn't meet any of them
 
If you asked for a 5 year fix, you should have a letter saying why you couldn't have one.  Same with the term. 
And you should also have some sort of declaration saying you agreed to add a fee on top of your loan.

As others have said, it's easily fixable but is just a real shoddy process from your broker. 

There is no reason a mortgage offer should give any surprises.  It should be exactly the same as the illustration they should have gone through with you prior to application. 

NewShadow

Thank you - I really appreciate your insight and explanation of what 'should' have happened - but, please don't take this the wrong way... this is the point where I could do with some one knowledgable but NOT a broker bound by professional codes of practice to comment on the thread 🤣🤣

I appreciate it's not standard/good practice - but this is the situation I'm now in, and I'm trying to figure out if it would be of any benefit to me to 'make a fuss' or change anything at this stage. 

It doesn't seem that I'm materially any worse off and I can't see any advantages to 'complaining'* given the info kindly provided above - but I don't know if that's because I don't know enough about the alternatives/options, and I'm not sure if I now trust this broker enough for him to explain if I did raise a concern... 

*blegh* I'm going to sleep on it and see how I feel in the morning. 

Thanks again all. 


* I use inverted commas because I don't mean a formal malpractice complaint as opposed to mention it when I next speak to him 

[Deleted User]

Ask for a copy of your suitability report and your fact find.  

You might not feel materially worse off now but if you want to complain about anything down the line you will want to know your conversation has been accurately recorded on the fact find at this point.   

Questions to ask to see if you are better or worse off:

Why are you adding £999 fee to the loan rather than paying it upfront?  That fee will accrue interest over the years and has increased your debt.  You could have paid it now if it was needed. 

Was it the best advice to even take a fee based product at all? Your mortgage doesn't feel big enough to justify a fee being good advice at all.  So you've got 999 fee that won't save you £999 of mortgage payments over the next 2 years.  So you are worse off financially with this mortgage against another one. 

20yr or 25yr doesn't matter if making overpayments anyway.  Unless your overpayments will be more than 10% of your balance in which case a 25 Yr term will limit your ability to overpay.