To go FA or not for mortgage renewal time.

B0bbyEwing

Bought our house 10yrs ago. Went in with an IFA who handled it brilliantly. Very happy with the service as we didn't have a clue.

Fixed in at 5 years & then 5 years ago went back to him as didn't really know what we were doing again. Turned out the cheapest deal was to stay with our existing lender - Nationwide. We wanted to fix so fixed in at 5 years once again .... which is up for renewal in a couple months or so.

I can move to another deal with Nationwide as it stands right now no penalty or if I move on then I can go with another lender from September onwards. 

With so much up in the air, I'm wondering 2 or 5 year, or even 10 since I've seen deals pretty similar to the 5 year fixed ... but for 10 years. 
Whatever the weather, it's fixed we want to stay, just the duration we're not sure.

I know the FA has no more a powerful crystal ball than the next man but they're dealing in the area of mortgages daily as a job so I'd think they'd have better knowledge than myself.

Or can you not really go wrong by hopping on any random comparison site & going with the best deal - removing any 'need' for any advisor?

Because once again, I'm unsure what to do really. 

MFWannabe

What are the rates with current lender? 

simon_or

I have a great broker who's saved me thousands of pounds over the years but even she freely admits that she has absolutely no idea of where rates may be in a few months time, let alone a few years. So I wouldn't place any particular weight on an IFA or broker's opinion about future mortgsge interest rates .

What she has done in the past is help minimise the risk from rates going up. For example, for a BTL remortgage I had coming up this year, she booked in a rate more than 8 months before the end of the fixed period with a bank that allowed a 3 month extension on top of the initial 6 months so even though rates went up a lot in that time, I was somewhat protected against that. That's something I wouldn't have known to do myself.

Whether you go direct or use a broker, I would suggest securing a mortgage rate asap, even if you are 7-8 months out of the end of the fix. If rates go up between now and the end of your fix, you sit tight and complete on it. If rates go down, you can switch to a lower rate. 

daivid

B0bbyEwing said: 

Or can you not really go wrong by hopping on any random comparison site & going with the best deal - removing any 'need' for any advisor?

My limited experience of brokers is they will suggest the cheapest deal they are certain you will get. This is not necessarily a bad thing, when I bought I went with the broker and all went smoothly which is worth something when buying. I may, in the 2 years of that 1st product have been overpaying but at least I had the house…

When it came to remortgage time the broker pushed a product I was as good as certain to get, but using best buy tables I identified another that would save me over £150 per month with a good chance of acceptance. For me it was worth risking not getting the better deal - I could get the other a month later if needed and rates at the time were stable. I get the brokers view though, they do the work but get nothing if the application falls through. Further to this if your needs are not straightforward the broker may know of specialist products, on the other hand if you can get a best buy product the broker probably can’t do any better.

bluelad1927

It seems strange that you are asking for advice about using an advisor who previously gave you good advice?

Altior

The OPs fixed rate deal is ending toward the end of a significant rate hike. This is almost the worst outcome. 

They could perhaps have paid a modest ERC and secured a much better rate when it was obvious what the direction of travel was going to be last year.

PixelPound

What's the deal with your broker? Mine charged for the first, but doesn't for remortgage - advice was similar to you, product switch.

B0bbyEwing

MFWannabe said:

What are the rates with current lender? 

23rd June a 5yr fixed was putting me at 5.09% initial rate, £518.65/mo.
Last week I'm sure that was up at £550/£560 but don't quote me on that as I never got the screenshot.
Today the same deal sits at 5.24% initial rate & £525.16/mo.

That's with me making an assumption on house value based on what others in the area are going for and Zoopla.

B0bbyEwing

simon_or said:

Whether you go direct or use a broker, I would suggest securing a mortgage rate asap, even if you are 7-8 months out of the end of the fix. If rates go up between now and the end of your fix, you sit tight and complete on it. If rates go down, you can switch to a lower rate. 

I wasn't aware you could do this - 'save' a deal kind of thing.

It was only recently I learned you had to get a valuation on your house when remortgaging. I didn't know that as we didn't have it done when we renewed our deal last (for the first) time. I assume it was all computer generated as we stayed with our existing lender. It was on this forum though that I found by going to another provider, I could be looking at having to faff about booking people in to come out & value the house - taking time off work which isn't easy as it is. 
Not sure we we never had to go through that rigmarole last time round.

B0bbyEwing

bluelad1927 said:

It seems strange that you are asking for advice about using an advisor who previously gave you good advice?

...only if you don't spend more than 1 second to think about why I'm asking such a question. Otherwise it's not strange.

Last time round there was no real volatility going on. Rates were low. Our first 5 years were something like 3.19% and our current 5 year deal is something like 2.14% I think. Whatever the .xx% the first numbers are accurate. 

Last time round I completely didn't know what to do. I'd gone on to Nationwide's site to get a rough idea but beyond that I had zero idea. Then when I went to the IFA, he loaded up a load of deals on his computer, the cheapest being the exact Nationwide deal I'd been looking at. I remember thinking at the time - if only I knew, I could've sorted that myself, but the key thing was I didn't know.

Note - this was also 5 years before being told on this forum I would need to faff about getting valuations which I've just mentioned in a post just now. I wasn't aware at the time as I didn't have to do anything beyond turning up, saying our deal needs renewing, what is best & then saying ok let's go for that one then. That was my involvement. 

But now, the rates are up and down like a <insert bad joke here>. That wasn't the case back then.

So with so much bouncing around with rates, I'm wondering are advisors themselves even going to have a clue over clueless Joe Bloggs? Or is it just like picking the lottery numbers at the weekend in that they're not going to know any more or less than me on what's better than what to pick?

B0bbyEwing

Altior said:

The OPs fixed rate deal is ending toward the end of a significant rate hike. This is almost the worst outcome. 

They could perhaps have paid a modest ERC and secured a much better rate when it was obvious what the direction of travel was going to be last year.

Could've. £1,600-£1,700 I believe it was.
But there's lots of could'ves. I could've gone variable at the start & saved myself a load of money over the time. I didn't because I wanted to know for sure what'd be coming out each month. Each time we locked in we thought - rates can't get much lower. We were wrong.
No point in bothering with could'ves, only what can be done from now forward.

"Obvious" - yep around the time Truss was PM I remember the rates shooting up & up. Then she left & they settled/reduced a bit so to then keep shooting up might've been obvious to you but not me. I don't keep tabs on these things daily. I lock in on a 5 year deal & that's basically it for 5 years for me.

But yep, it's not an ideal scenario as you say. Still, it's the one I have to deal with.

Aside from who to go with, the other question is 2/5/10, variable/fixed. Who knows.