Can one of you kind mortgage brokers help please

foreversummer

Hi

I've been along to the mortgage broker who arranged my current mortgage for me. My current mortgage expires on 19th October. I am happy to go ahead with the Woolwich Lifetime tracker which he has given me the details of, but he says that there is no rush to get the application in as I have still got several months before my current mortgage expires. He proposes doing it sometime later this week or next.

I am very worried that the rates will be gone up by then but he does not seemed concerned.

Should I be worried, or will he have somehow reserved this rate for me prior to application?

Don't want to keep chasing him unnecessarily.

Foreversummer

beecher

If you are so concerned about rate changes I wonder if a tracker deal is the best option for you? Interest rates will almost certainly go up as the year progresses so it is likely the tracker rate will be at a higher rate in October regardless of when you fix.

homer_j_3

As beecher says. If you go for a base rate tracker - it will be the margin above the base rate in October that is your actual rate. If you are just concerned that the margin above base rate is what may increase then you should ask that the broker secure that rate asap due to your concerns.

nspnick

If I were you then I would certainly want soemthing in place NOW. Also as beecher says please look at fixed rates aswell. Definitley act now though in what ever you do.

_Andy_

The rate will only be secured once an application is submitted to Woolwich by your broker.

NewCliche

You are completely right foreversummer. The tracker might go up, i.e. if the deal is base rate plus 0.79%. Woolwich could change this at any time to BBR plus 0.89% or even higher. They also might lower the rate as well, but the likelihood of that is slim.

It is a bit soon for submitting the application, so your adviser needs to check the drawdown date deadline from Woolwich. The deal he has offered you might have to have the funds drawn down before the 19th October. If not, then I would put the application in if a client was asking me to so that the rate was booked!

I think you have to take into consideration what beecher has said. But we dont know your full circumstances so it's impossible for anyone to say whether you should choose a fixed or tracker rate.

Also, make sure that the Woolwich deal has no early repayment charges, so that it gives you freedom to move out of it if fixed rates get better. Or you can jump ship if you feel that the tracker rate might be going up too high at any point.

I am a Mortgage Adviser

You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.

foreversummer

Thanks for all your speedy replies!

It is the tracker margin that I am concerned about. Currently .99 over base rate which I find acceptable at present (although a lot more than our current tracker 0.13 below)!

The 'to fix or to track' dilemma is one we have found difficult to decide upon. There are no fees with the tracker compared with £995 fees for a five year fixed. So even if rates go up a few times over the next year, we should hopefully not lose out. I am of the mind that we will go into or very near to a recession and that rates should come down next year - although I do understand that there is no certainty that this will happen. The tracker does seem to offer us a little flexibility and we can jump ship if necessary.

NewCliche - I believe that the Woolwich hold rates for 6 months so there should be no problem with draw down in October. I do have penalties on our current deal if we pay it off before. I hope this is right?

Just one other thought - do Brokers normally get notification if rates are being withdrawn? Therefore, maybe he does not feel rushed because he can always get the application in quickly should be get notification that rates are going up.

Thanks once again for all your comments.

payless

what the LTV ( mtg/ value )
Does tracker have a tie/ penalty
is his research only on "broker deals" / are you paying the broker a fee or just commission?

NewCliche

Some lenders are enforcing drawdown dates on some of their products even though the rate is booked for a certain period of time.

I'm not sure what the Woolwich are doing for that tracker, so to err on the side of caution theres no harm in asking your broker to check. Its probably OK but its just a little thing to consider that I thought I should point out.

Brokers usually get emails on any changes in rates from Woolwich as long as they are registered with the company for submitting applications. The length of notice we get varies from a few hours to a few days.

foreversummer

Hi Payless

Thank you for replying. No, I am not paying the Broker and I do realise that you can get better deals going direct. But, as my husband is a Company Director of his own business being paid a low salary and receiving dividends etc, I find it easier to use a broker.

Foreversummer

foreversummer

Hi Payless

Now have the information:

Property valued at approx £280,000. Current mortgage £116000. There is a 1% penalty payable in the first three years to get out. However, there are no upfront fees at all.

Last week, when I spoke with him, he was able to get a 5.99 fixed with either Woolwich or C&G. Looks like these have now gone. Hence I'm concerned that the Tracker will go before he's done the application.

Foreversummer