Mortgage broker - ask me anything

chelseablue

Our fixed rate of 1.79% expires soon and I’m seeing that discount rate or tracker mortgages are lower than fixes. 

I’m thinking of going for a discounted rate instead of a fix or is that a bad idea? 

K_S

pjm2002 said:

Hi there, 

Newbie, and really struggling with uncertainty on taking out a new mortgage product after several years on a 2.09% rate. I tried to carefully weigh up the options - either pay circa 6-65% as a guaranteed fixed term, or switch to a tracker for two years at 1.39%.  I chose the latter less than a week ago, but even in that time circumstances have changed so much, and I know feel as though the rise of the base rate will take us to well over 7% in total by next summer. So my worries are:

- Can I cancel the product I chose? I've had my offer in writing but there is no definition on a withdrawal period on my part (I paid no fees for the product so don't have to worry about this)
- If I review the options today vs a week ago, is there a chance the fixed term guarantee will end up being less than whatever mess the base rate will end up as by next Spring?

I get that it's a two-year tracker, so not potentially long enough to push us into financial ruin, but I'm really worried about whether I've made a really bad choice AND equally worried about pulling that offer and choosing something worse. I do appreciate these things are all balanced on very fine detail and the margins are small, and it's so difficult to know for sure. What would be your advice in this situation (on a general level). 

@pjm2002 Assuming that you're talking about a remortgage (new lender) and not a product-switch (same lender), typically, you don't need to 'accept' or cancel an offer. It will be deemed to be accepted if/when your solicitor completes the conveyancing and asks the lender to release funds for completion.

So if you don't want to proceed with the remortgage (new lender) offer, all you've to do is not act on it.

kazzyb123

K_S said:

kazzyb123 said:

Hi,

if I take out a 5 year fixed rate mortgage do you know the percentage for early repayment charges if we move and decide to remortgage after 2 years?

it will probably be NatWest but is it roughly the same for all lenders? Thanks 

@kazzyb123 It differs across lenders and products. For NatWest it could be (please confirm on your illustration) a sliding scale from 4.5% in year 1 to 1% in year 5, for others a flat x% until the final day of the fix, for others a pro-rated 1% per year remaining on the fix, etc.

With most mainstream lenders, you will have the option to apply to port the fix to the new property so you can avoid paying an ERC.

Thanks for the reply, if it is NatWest do you know the % for each year please?

so if yr 1 is 4.5% and yr 5 is 1% what would yr 2,3 & 4 be??

thanks

pjm2002

K_S said:

pjm2002 said:

Hi there, 

Newbie, and really struggling with uncertainty on taking out a new mortgage product after several years on a 2.09% rate. I tried to carefully weigh up the options - either pay circa 6-65% as a guaranteed fixed term, or switch to a tracker for two years at 1.39%.  I chose the latter less than a week ago, but even in that time circumstances have changed so much, and I know feel as though the rise of the base rate will take us to well over 7% in total by next summer. So my worries are:

- Can I cancel the product I chose? I've had my offer in writing but there is no definition on a withdrawal period on my part (I paid no fees for the product so don't have to worry about this)
- If I review the options today vs a week ago, is there a chance the fixed term guarantee will end up being less than whatever mess the base rate will end up as by next Spring?

I get that it's a two-year tracker, so not potentially long enough to push us into financial ruin, but I'm really worried about whether I've made a really bad choice AND equally worried about pulling that offer and choosing something worse. I do appreciate these things are all balanced on very fine detail and the margins are small, and it's so difficult to know for sure. What would be your advice in this situation (on a general level). 

@pjm2002 Assuming that you're talking about a remortgage (new lender) and not a product-switch (same lender), typically, you don't need to 'accept' or cancel an offer. It will be deemed to be accepted if/when your solicitor completes the conveyancing and asks the lender to release funds for completion.

So if you don't want to proceed with the remortgage (new lender) offer, all you've to do is not act on it.

My apologies. It’s a switch with my existing lender. 

WorldCitizen

Hi there, question for my son.

We are particularly interested in Nationwide (would apply directly online):

1. When checking for mortgage affordability do they take into account such outgoings as car insurance and fuel?

2. Does Nationwide ask for an employment contract or payslips only?

(He changed jobs 2 months ago / payslips are issued weekly / there are different amounts of working hours each week, and there is no such thing as 'basic hours' in payslips, just the number of hours worked multiplied by a rate per hour).

K_S

kazzyb123 said:

K_S said:

kazzyb123 said:

Hi,

if I take out a 5 year fixed rate mortgage do you know the percentage for early repayment charges if we move and decide to remortgage after 2 years?

it will probably be NatWest but is it roughly the same for all lenders? Thanks 

@kazzyb123 It differs across lenders and products. For NatWest it could be (please confirm on your illustration) a sliding scale from 4.5% in year 1 to 1% in year 5, for others a flat x% until the final day of the fix, for others a pro-rated 1% per year remaining on the fix, etc.

With most mainstream lenders, you will have the option to apply to port the fix to the new property so you can avoid paying an ERC.

Thanks for the reply, if it is NatWest do you know the % for each year please?

so if yr 1 is 4.5% and yr 5 is 1% what would yr 2,3 & 4 be??

thanks

@kazzyb123 For the specific 5yr fix product that I applied for for my client most recently it was 4.5%-4.25-4-2.5-1%. 

Just so I don't unknowingly mislead you, the above may or may not be the same for the product that you are applying for, your broker or the lender (if direct) should send you an illustration/KFI/quote which shows this clearly before you submit an application.

jenni_fer

What are the chances of Nat West extending an offer that expires in November until end of Jan?
Trying to work out if we are about to lose our buyers!

K_S

@jenni_fer NatWest will normally allow a 1 month extension through a well established process. Beyond that they'll need to apply for a new product/rate, whatever is available at the time.

jenni_fer said:

What are the chances of Nat West extending an offer that expires in November until end of Jan?
Trying to work out if we are about to lose our buyers!

jenni_fer

K_S said:

@jenni_fer NatWest will normally allow a 1 month extension through a well established process. Beyond that they'll need to apply for a new product/rate, whatever is available at the time.

jenni_fer said:

What are the chances of Nat West extending an offer that expires in November until end of Jan?
Trying to work out if we are about to lose our buyers!

Thanks, game over then as they have stated they can't afford the new rates.

Thank you 

sidneyvic

Bit of a blunt question but are mortgage advisors paid more for five year fixes rather than 2 year ? Getting push towards 5 year fix at over 6% but everything tells me to only fix at 2 years at that rate .....