Help with mortgage

lonibra

moneysavinghero said:

Brokers are never free of charge. They want paying for what they do. Some may not charge you directly but will get a fee from the mortgage provider (who will of course accounted for this in the rates they give - this is why it is not always cheaper to go with a broker)

OP, this is incorrect.

The procuration fee (commission) paid by the bank to the broker has no effect on the interest rate of the product.

Even if you go direct, you won't get a "discount" on the interest rate, the bank also has to incur costs to service your application, take on the risk of advice, etc.

moneysavinghero

lonibra said:

moneysavinghero said:

Brokers are never free of charge. They want paying for what they do. Some may not charge you directly but will get a fee from the mortgage provider (who will of course accounted for this in the rates they give - this is why it is not always cheaper to go with a broker)

OP, this is incorrect.

The procuration fee (commission) paid by the bank to the broker has no effect on the interest rate of the product.

Even if you go direct, you won't get a "discount" on the interest rate, the bank also has to incur costs to service your application, take on the risk of advice, etc.

As Lonibra (one of the mortgage brokers that stalk this forum) shows, you can get exactly the same rate going direct with Nationwide as you get going through a broker. What the above doesn't show is whether said broker will be charging a direct fee to the consumer. No such thing as a free lunch in life - but will always be plenty of people making easy money selling 'free' lunches that will swear they are really are free.

Bank has to incur costs wherever you go direct or not, but if you go via a 'free' broker they also have to incur the cost of the brokers fee.

Will123321

moneysavinghero said:

Firstly you need to get a Decision in Principle (DIP). This is the mortgage provider saying in theory they would be willing to lend you x sum of money. Once you know how much you can get a mortgage for you will know which houses are within your budget. The Estate Agent will likely also want to see your DIP before they allow you to view houses (they don't want to waste time showing houses to people who can never actually buy them). Once you have viewed a house you like just call up the Estate Agent and make your offer. Once your offer has been accepted then you apply for the full mortgage.

In your situation as you don't really know what you are doing it might be better to go with a broker who can hold your hand throughout the process.

How to apply for DIP? I'm not looking for a big sum of money anyway as i don't want yo pay huge amount of money a month.

The most confusing for me is, the process.

I'm not sure if i need first to apply for mortgage or find a property. And all other procedures. 

Will123321

I'm also confused regarding fixed rate or initial one, what's the difference, and which one is the best to choose in long term? 

AdrianC

Will123321 said:

I'm also confused regarding fixed rate or initial one, what's the difference, and which one is the best to choose in long term? 

Initial rate may be a discount, but still variable.
Fixed rate is... fixed, no matter what the variable rate does.

Which is better? Hold my crystal ball for me a second...

lonibra

moneysavinghero said:

lonibra said:

moneysavinghero said:

Brokers are never free of charge. They want paying for what they do. Some may not charge you directly but will get a fee from the mortgage provider (who will of course accounted for this in the rates they give - this is why it is not always cheaper to go with a broker)

OP, this is incorrect.

The procuration fee (commission) paid by the bank to the broker has no effect on the interest rate of the product.

Even if you go direct, you won't get a "discount" on the interest rate, the bank also has to incur costs to service your application, take on the risk of advice, etc.

As Lonibra (one of the mortgage brokers that stalk this forum) shows, you can get exactly the same rate going direct with Nationwide as you get going through a broker. What the above doesn't show is whether said broker will be charging a direct fee to the consumer. No such thing as a free lunch in life - but will always be plenty of people making easy money selling 'free' lunches that will swear they are really are free.

Bank has to incur costs wherever you go direct or not, but if you go via a 'free' broker they also have to incur the cost of the brokers fee.

I'm not a broker, but I know enough about mortgages to know that you don't get a discount on the rate by going direct, which is what you said. None of this is hidden, you can check the MSE mortgage finder to compare for yourself.

Are you saying that an 80% LTV purchase mortgage from Halifax/HSBC/Nationwide has a higher rate through a free broker (Habito, L&C, other MSE recommended free brokers) than if you went direct?

moneysavinghero

If the whole thing is confusing you then maybe it is best that you find a mortgage broker. They will be able to get the DIP sorted for you. They will also advise you on anything else you need help with.

You could also get a DIP by visiting your chosen mortgage providers website and going through their application process.

Fixed Rate vs Variable rate.
FIXED: You know what rate you are going to pay for the length of the fix. Great if you are worried interest rates might rise, not so great if they fall
VARIABLE: The interest rate may change throughout the length of the mortgage. It could either go up or down depending on central bank decisions.

Will123321

moneysavinghero said:

If the whole thing is confusing you then maybe it is best that you find a mortgage broker. They will be able to get the DIP sorted for you. They will also advise you on anything else you need help with.

You could also get a DIP by visiting your chosen mortgage providers website and going through their application process.

Fixed Rate vs Variable rate.
FIXED: You know what rate you are going to pay for the length of the fix. Great if you are worried interest rates might rise, not so great if they fall
VARIABLE: The interest rate may change throughout the length of the mortgage. It could either go up or down depending on central bank decisions.

Example, if I'm based in London, but would like to buy property in an other city, where should i look for a broker? 

moneysavinghero

Any broker will do. They don't have be in the same city as the house is. If you really don't have a clue how to find a broker then you could find a property first and call up the estate agent to book a viewing - they would then probably direct you towards their in-house broker to get a DIP from them before continuing.

Will123321

moneysavinghero said:

Any broker will do. They don't have be in the same city as the house is. If you really don't have a clue how to find a broker then you could find a property first and call up the estate agent to book a viewing - they would then probably direct you towards their in-house broker to get a DIP from them before continuing.

Thanks. So first i need to see the property and if I like it, ask for DIP?