Confusing or what?

judi24

Is it me being dim or is mortgageing getting more and more confusing???

I am 38 and have a mortgage of some description since I was 21 - but now trying to remortgage after a split from my husband - I am left feeling so confused and scared about taking out a new mortgage.

I have become an absolute mortgage bore - quoting interest rates, tie ins, repayments etc to the point where my friends and family are ready to gag me! BUT i still can't work out what's the best deal for me!

Do i use a broker? do i try lenders direct? who offers best deal? do I fix or or look at trackers? what about off set mortgages? the figures always look good but are they real?

I will have a big mortgage on my own and as it is the biggest investment I am ever likely to make I am anxious to get it right!

I don't suppose I'm looking for answers!!!!
Just having a bit of a meltdown about it all! :eek:

natman

Hee heee, I am not laughing at you, just laughing as i beleive you are spot on, and i bet you have in fact melted down!!!!

One of the worse things also is a lot of advisors highlight that its worth moving your mortgage product every so often to get the best deal, so all this may happen again in a few years................

I went old style - I got myself a base rate tracker mortgage at 0.5% above base rate some 9 years ago and it has held me in pretty good times, even now 9 years later, people would like to pay 5.5% which is the rate i am paying.
I think your right in wanting to make sure the product you choose is good. A lot of people do go through independant financial advisors and i suspect this at present is a good route to take.
I had the following factors regarding my mortgage -
Had to be flexible - over payments if needed dependant on my salary and circumstances
Rate had to be decent - not the best but decent for the flexibility.
No penalties for overpayments

I took my mortgage out in 1999 for 25 years - due to over payments and paying bits here and there i have 6 years and 3 months left.

A starting point might be to look at moneysupermarket.com - look at the mortgage products, payment type etc to get a rough idea, then look at chatting to an advisor.

it is a minefield out there, but theres plenty of help!!!!!
good luck

judi24

Thanks natman! I do believe you are laughing at me though!

I have looked at money supermarket and although it is helpful to some extent it is still confusing!

I think part of my problem is I can't do anything until September when the fixed rate on my current mortgage comes to an end! Mortgage advisors have said they will look at my case at the end of June - but in the meantime I keep reading everything I can find on mortgages and getting myself more and more confused!!!!

I might have to ban myself from the computer for a month!!!!

_Andy_

Judi - I think you're suffering from 'paralysis through analysis'. Maybe initially break your decisiond down, eg.

Do you want the stability of having a fixed rate or are you going to be happy with a rate and payment that could go up and down?

Do you want capital repayment or interest only?

etc...

Once you've done that you can use Moneyfacts or Moneysupermarket to get an idea of whats available on the market. Bear in mind rates are changing all the time so you'd be advised to get a deal sorted out ASAP

judi24

I have always gone for a fixed rate but with everything that's going on with the mortgage situation some of the stuff I've read suggests a discounted or tracker mortgage may be better at the moment!
That is where my confusion started!
I got worse by then exploring offset mortgages!
Everyone I've tried to speak to say i'm being a bit premature looking now when my fixed rate doesn't end until the end of september - but I can't help looking!

bermondse1

Preparation and self-education is key to making the right decisions Judi - so good on you!

"Better" is a subjective measure however. Don't get too hung about about finding the "absolute cheapest" product - it's not just about the raw financials and costs, it's also about aligning the product with your own goals, and plans.

As Andy suggested - as a first step, perhaps you need to think about what you want out of your mortgage, but in "lifestyle" terms, or in relation to your own personality. These map quite easily over to the various features of different mortgage products.

e.g. is consistency of payments important to you, for budgetting purposes, or are you comfortable with payments that fluctuate? This will influence whether you go for a fixed or variable rate.

Is it important to you to be able to pay off your mortgage as soon as possible, or not? Flexibility in terms of overpayments or an offset facility might be important in this case.

Do you have significant savings and/or are you a higher rate taxpayer? An offset account can be a very tax efficient tool in these circumstances.

Are your circumstances likely to change in the next few years? e.g. might you consider moving? This will increase the importance of early repayment charges or portability.

Once you've defined the key criteria that are important to you, perhaps ranked them, and then mapped these to the various product features you then need to put in the legwork on Moneysupermarket to shortlist some actual products from lenders.

The difficult bit is then deciding which is the cheapest product, given the various combinations of fees vs interest rates, and fixed rate periods.

The basic rule is that the higher the loan amount, the less fees influence the final cost. Conversely the lower the loan amount the more that the fees influence the total cost (quite noticeably).

If you've narrowed down your search to three or four products, then this in itself should help you focus, instead of getting overwhelmed by the range of choice.

judi24

Thanks for that bermondse1. That reply was very helpful in making me think about what is important in my current circumstance.

I have now noted some answers to the questions you suggest asking myself and can already see more clearly what my prioroties are! I am now focusing my search a little more.

Still not sure bout using a broker or not! The thread on supporting brokers is not helping at all!!!!

ixwood

You will be able to find the best deals from here. Check out the latest threads, or just list your circumstances ask what's the best deal around.

I personally think inflation and interest rates (8%ish is the long term average) are only going to be going up in the next few years, and I'd be very wary of trackers, but that's obviously speculation.