Mortgage broker - ask me anything

motherlode

@K_S Thank you, that's reassuring. Makes the 2 week wait for the appointment a little less stressful!

K_S

motherlode said:

@K_S Thank you, that's reassuring. Makes the 2 week wait for the appointment a little less stressful!

2 weeks for an advisor appointment?! Wow, wish I could get away with that
All the best!

Dazzie

Hi I would really appreciate some hep. I have found a house that I really like that is a work/live property. The property was built approx 4yrs ago. Has anyone any experience of getting a mortgage for one. Is it straightforward process ? Many thanks 

K_S

Dazzie said:

Hi I would really appreciate some hep. I have found a house that I really like that is a work/live property. The property was built approx 4yrs ago. Has anyone any experience of getting a mortgage for one. Is it straightforward process ? Many thanks 

@dazzie If you don't mind expanding on it, how exactly is this a "work/live" property?

Dazzie

The bottom floor has a unit that’s is classed as B1 some people in these property’s use them as solely residential use and some as work units (one person runs a florists and another a interior design).  Above is the house which is c3 we would use the whole property as a residential house. 

jicms

K_S said:

@jicms I think what you're looking for is a RIO (retirement interest only) product which you can source either directly from a lender or a specialist broker.

I'm really surprised the mainstream brokers recommended by MSE took you all the way to the application stage as I wouldn't expect them to advise on these.

There is a decent range of RIO products out there now across a handful of lenders. Unfortunately (though understandably) the compliance requirements for advising on such products is very high so a lot of brokers (including myself) don't do it.

If you're struggling to find a broker, might be worth talking to Nationwide or L&G directly, both of whom offer RIO products.

https://www.nationwide.co.uk/products/mortgages/borrowing-in-later-life/retirement-interest-only

https://www.legalandgeneral.com/retirement/retirement-interest-only-mortgage/

Thank you very much for your reply.  If there are any brokers specialising in this area please let me know!
Nationwide are on my list but having approached a few lenders directly as well as the brokers I've been reluctant to try them only to get the same answer. 
I'm surprised they're finding our situation so unusual, it seems pretty straightforward other than that we're approaching retirement.

K_S

Dazzie said:

The bottom floor has a unit that’s is classed as B1 some people in these property’s use them as solely residential use and some as work units (one person runs a florists and another a interior design).  Above is the house which is c3 we would use the whole property as a residential house. 

@dazzie Thanks. Not all lenders will, but there are lenders who will lend on part-commercial properties (such as the work/live unit you've described) on normal residential terms, subject to a valuation of course.
If the valuation comes back fine, the rest is no different to a normal residential purchase, albeit with a bit more conveyancing work, such as checking what the B1 classification could be changed into.

Dazzie

Thank you appreciate your comments. 

annetheman

Hi broker(s) please may you help?

I have had a broker recommend a lender A based on "affordability and good working practices" but the thing is compared to another lender B, the initial fees are £1,000+ higher and also the interest rate is +1.4% so over the fixed period I will pay approximately £3,000 more.

What is the rationale really behind a broker recommending a higher interest rate product with higher initial fees? This doesn't make sense to me, given that I am buying a Shared Ownership property, I want to keep affordability %age as low as possible on my shares?

Figures if it's helpful:
Lender A = 4.04% 5 year fix, £560 total fees
Lender B 5.49% 5 year fix, £1,233 total fees

K_S

annetheman said:

Hi broker(s) please may you help?
I have had a broker recommend a lender A based on "affordability and good working practices" but the thing is compared to another lender B, the initial fees are £1,000+ higher and also the interest rate is +1.4% so over the fixed period I will pay approximately £3,000 more.
What is the rationale really behind a broker recommending a higher interest rate product with higher initial fees? This doesn't make sense to me, given that I am buying a Shared Ownership property, I want to keep affordability %age as low as possible on my shares?
Figures if it's helpful:
Lender A = 4.04% 5 year fix, £560 total fees
Lender B 5.49% 5 year fix, £1,233 total fees

@annetheman As I understand it, you are basically asking why has the broker recommended a more expensive product. Based purely on the reason given "affordabilily", I would assume that your case meets the affordability criteria of Lender B but not of Lender A. I hope that makes sense?

As for "good working practices" you will have to ask the broker to clarify but if I had to guess I would think they mean services levels, etc.

They should be able to explain their rationale properly when recommending a product. If you are in doubt, you should feel free to ask him the same, I'm sure there will be adequate justification.