Remortgage Hell With Financial Advisor

vnet

I've recently remortgaged using the bad credit remortgage company. They were very helpful. They might be worth emailing. Hope that helps.

Leon_W

Pull the other one vnet.

Paying a £2500 broker fee ain't helping anyone !

Brokers like that want putting out of business.

dunstonh

Blimey, that company are rip off merchants. It is companies like that which give the industry a bad name. They charge a massive fee and keep the commission, which on poor credit cases is usually much higher than than conventional mortgages.

skywalker_20

Leon_W wrote: »

Hi Skywalker

I think it will be impossible for your parents to remortgage. As posted above, it's not that brokers (or lenders for that matter) don't want to help, we do, but, as it stands at the moment, there simply aren't the mortgage products out there at the moment to enable it.

Brokers simply don't have the products available that we did just a few short months ago due to the "credit crunch" and this goes for lenders also. They may be willing to lend to credit impaired or "sub prime" borrowers, but if that money is not available on the money markets at a decent rate then their hands are also tied.

It would be easy to turn around now and blame GMAC,but it isn't as simple as that. GMAC borrowed the money 3 years ago in order to lend it to your parents at a fixed rate which unfortunately they fell behind with. They will obviously protect their interest which I think you understand (as your post was quite measured) but can they offer your parents another deal ?? Well they might,but you have to bear in mind that interest rates have risen markedly since your parents took out their fixed rate anyway so the likelyhood of them actually cutting their mortgage payment is practically nill, the increase is inevitable. Also take into consideration that GMAC would have to pay more to borrow the same amount.

I fear they will be hit by increased payments whether they remortgage (unlikely) or not. I'd them to talk to GMAC as the rate they are offered (if they do) is going to be the best they will get.

All the best.

Useful advice, thanks very much Leon.

Any advice re: the £50 per month charge?

luckyfool

skywalker_20 wrote: »

Useful advice, thanks very much Leon.

Any advice re: the £50 per month charge?

The positives here are that they will have made at least 6 clear payments by the time their deal with Gmac expires. Whether they can remortgage elsewhere is going to depend heavily on how much equity there is in the property, and to a degree on how many payments were missed in the last 12 months. From January to June how many calendar months did your mother make no payments at all in, or less than 90% of the normal payment?

The likelihood is that if there is 25% equity in the property then she should be able to source a remortgage, and to be honest even if she had missed all 6 payments from Jan - June 07 the rate on the new mortgage is still likely to be better than the Gmac SVR ( I would expect the Gmac reversionary rate to be anything up to 9%+). Definitely check what if anything Gmac will offer (as a securitising broker only lender you may well find that they are unwilling to offer a new deal, instead referring your parents on to their original broker). Then speak to an independent whole of market broker who can search the market and find out what options your parents might have.

Hope this helps.

luckyfool

skywalker_20 wrote: »

Useful advice, thanks very much Leon.

Any advice re: the £50 per month charge?

It's frustrating, but legal. It will have been itemised within the tariff of charges at the outset of the mortgage and there are significant additional costs to a lender in managing a mortgage that is in arrears. This of course would be resolved if your mother can catch back up, either through paying arrears off directly or remortgaging to another lender. Of course if you do consider remortgaging, make sure that the new deal is affordable, otherwise your mother may be better off selling up when her penalty ends and renting for a while?

skywalker_20

Thanks all for your help.

Luckyfool- I don't think that any payments were made Jan-Jun although there hasn't been one missed since then.

Another bit of advice needed. She's told me she's having an 'advisor' out to visit to discuss remortgage options etc this week. I'm rather sceptical as she's usually far too trusting. He's supposedly independent, she found him looking on the internet and he says he doesn't charge a fee....

What sort of questions should I be asking to ensure he's credible? Ask if he is a whole of market broker for a start... what about his fee... he get's paid in the end surely (he says from the firm he arranges the mortgage with) but what should I be questioning? Also, will he contact GMAC on my mother's behalf to ask them about a new deal? Further advice much appreciated as always.

Thanks,

dunstonh

He's supposedly independent...
...Ask if he is a whole of market broker for a start

To be independent you have to be whole of market and offer the ability to pay be fee (with commission rebated) if you choose.

She should also check the adviser is whole of market/independent in all areas and not just mortgages.

She's told me she's having an 'advisor' out to visit to discuss remortgage options etc this week. I'm rather sceptical as she's usually far too trusting.

The vast majority of advisers have never had a complaint. (FOS published figures earlier in the years saying over 80% had not had a complaint). Of those that had complained, only 16% were against independents.

So, as long as she is avoiding tied agents and salesforces she should be fine.

There has to be a balance between being far too trusting and far too sceptical.

what about his fee... he get's paid in the end surely (he says from the firm he arranges the mortgage with) but what should I be questioning?

If he is truly independent, then you can pay by fee or commission. The adviser should issue a key facts about our services for both mortgage and insurance and on there it should be clear from that if the adviser is whole of market (home insurance tends to be a classed as a panel for technical reasons so expect that one to be different).

dreamylittledream

luckyfool wrote: »

It's frustrating, but legal. It will have been itemised within the tariff of charges at the outset of the mortgage and there are significant additional costs to a lender in managing a mortgage that is in arrears. This of course would be resolved if your mother can catch back up, either through paying arrears off directly or remortgaging to another lender. Of course if you do consider remortgaging, make sure that the new deal is affordable, otherwise your mother may be better off selling up when her penalty ends and renting for a while?

I doubt £50 a month can be justified as a reasonable and proportionate charge to an account where a payment agreement to repay arrears has been agreed.

Would be probably worth investigating the possibility of complaining about these monthly arrears charges, some successes have already been reported in this area and the principle is little different to bank/credit card charges.

Although its worth bearing in mind starting such a complaint could rapidly exhaust GMAC's good will.