Other Mortgage advice? My bid for a house accepted!! Updated!

Updated: 27th July 2009

Our bid for our first home just got accepted and now we start the process of going through all the mortgage providers to seriously look at choosing one.

We have spoken to the estate agents broker who has referred us directly to some deals without any commision himself - he states he will hopefully make his commission on us buying insurance for the property through him instead.

I am currently looking at HSBC and their mortgage deals seems ok but I thought some feedback would be good:

Basically:

total mortgage to borrow is £100k

fixed rate for 2 years at 3.24% rising to hsbc's variable rate after 2 years which is currently 3.94% (but no doubt would be much different 2 years from now...but still cheaper than other places which most are saying 3.99% currently...which would be higher I would estimate two years from now anyways)

Monthly repayments of £487 per month.

Mortgage arrangement fee of £599

Any views on this?

Also any suggestions on better deals? I have checked moneysupermarket to no avail and they dont seem to come close - most fixed rates seem to start at around 3.99% region rising to 4% after the fixed rate period with 4% being the "current" variable rate which makes me think it will no doubt be higher than hsbc's a couple years from now!

Phew its confusing I know but im slowly getting my head around it.

Tips? suggestions? keep em coming! biggest purchase of my life soon so all advice is welcome!

 

check out www.moneysavingexpert.com always got lots of useful information on there, otherwise i cant be much help me and the misses managed to get a 10 year fixed deal at a not to unreasonable rate a 5-6 years back so have not been looking around recently

 

nice will check it out! thx minimad!

any more advice/experiences are welcome!

 

does you bank have a special account card eg HSBC plus account. Ive got this card and one of the many benifits of the card is speacial deals on Mortgages and also it comes with other stuf which saves me an aweful lot a mnth with only payin a smal amount for the use of it.

Also try and haggle with them after you have a few quotes it worked for my mates

good luck

 

Try to find a good independent financial advisor. We have been lucky that our solicitor's has their own independent who is paid a salary by the law firm, he does not get any commission on selling mortgages, insurance etc so he is finding the best deal for us, not the best deal for himself. So a valuable question to all ways ask is how much commission the advisor gets on the mortgage he is recommending. Check the fees you have to pay for setting up the mortgage and what kind of penalties you (might) get for changing to another provider later on.

Also when looking around DO NOT let them search for a decision in principle on a mortgage until you have found an advisor you like as having a cluster of mortgage enquiries on your credit record affects your credit rating.

My flat went on the market yesterday so i'm about to go through all this in the near future again my self. Good luck!

 

Cool!

Yeah I had spoken to someone who told me not to get agreements in principle as they affect your credit rating so i avoided it until I need it.

Any advice on where I can find independant mortgage advisors? ones that will search for the best deal?

Hmm...good advice so far! thanks! oh and good luck with the flat sale!

-Solidus

 

The way that houses are bought and sold in Scotland is quite different to England so all our property sales are controlled by the legal profession so my advice might not be too relevant. For finding a financial advisor personal recommendation is the best place to start. After that I looked for someone I could get on with and who seemed level headed and sensible. A few of them immediately tried to recommend one mortgage over the others with out really explaining why which is when the commission alarm bells started ringing. The one we chose showed us everything available, then struck off the dodgy self certified lenders, then narrowed the choices down to the mortgages which fitted our payment options the best. After that there was about 10 left and he took the time to explain the pro's and con's of each mortgage. This was all done on the computer infront of us and was a very transparent process.

Ask lots of questions too. A good financial advisor will be able to explain it all in a way which is easily understandable.


[offtopic] We've had one viewing and one offer so far and the local paper is considering our place for their 'featured property' which is quite cool! [/offtopic]

 

Hope this is not against the rules, What area of aberdeen is your flat located in?

 

I would recommend a HELOC if you have them. This is how I am financing my first house. It is effectively a giant credit card. Therefore if you need money you can go up to your limit yet it works like a mortgage payment.

Overall though watch out for closing costs as those might set you back 3-4k, if you can pay down at least 20% of the house as a down payment. You will get lower rates if you do that.

 

City Center, just off of Golden Square.

 

Woah, just a tad over my budget, lol. looking for a flat soon (currently bide in westhill).

 

just remember that even though the base rate is so low currently, a Fixed rate mortgage might not be the best deal. 1. the rate of the fixed rate mortgage will not be close to 0.5% and 2. the fee you pay for a fixed rate did go up a few months back when I was looking around, so would have offset any savings benefit i might have made if the base rate rose. fixed rates are good for knowing how much you will spend each month for the next few years but are not always the cheapest or best rate for your circumstances.

 

http://www.confused.com/

http://www.comparethemarket.com/ (not http://www.comparethemeerkat.com/ which is worth a visit nontheless).

Fixed rate mortgages are not about getting the cheapest deal --they are about protecting you against insane interest rate hikes (which will be coming to a bank near you in the next 2 years).

Their higher-than-base rate interest will also protect you against unwelcome surprises when you switch to a variable rate mortgage in a few years' time. If you can afford a fixed-rate mortgage now, you will be able to afford a variable rate mortgage when the base rates have gone up.

 

Updated: 27th July 2009

Our bid for our first home just got accepted and now we start the process of going through all the mortgage providers to seriously look at choosing one.

We have spoken to the estate agents broker who has referred us directly to some deals without any commision himself - he states he will hopefully make his commission on us buying insurance for the property through him instead.

I am currently looking at HSBC and their mortgage deals seems ok but I thought some feedback would be good:

Basically:

total mortgage to borrow is £100k

fixed rate for 2 years at 3.24% rising to hsbc's variable rate after 2 years which is currently 3.94% (but no doubt would be much different 2 years from now...but still cheaper than other places which most are saying 3.99% currently...which would be higher I would estimate two years from now anyways)

Monthly repayments of £487 per month.

Mortgage arrangement fee of £599

Any views on this?

Also any suggestions on better deals? I have checked moneysupermarket to no avail and they dont seem to come close - most fixed rates seem to start at around 3.99% region rising to 4% after the fixed rate period with 4% being the "current" variable rate which makes me think it will no doubt be higher than hsbc's a couple years from now!

Phew its confusing I know but im slowly getting my head around it.

Tips? suggestions? keep em coming! biggest purchase of my life soon so all advice is welcome!

 

Go Fixed mortgage, you will save yourself SOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO much hassle once the markets rebound (and then some). What you pay extra will be well worth it. I have a mortgage at 4.75% on 76k and right now my monthly payments are only about 350/mo. I think you should be able to manage 4% without any problem

 

Fixed rate all the way! Only thing I make a payment on is housing for my son and grand daughter.

And by the way $76K buys a nice double garage or horse barn in Denver. Yeeks!

john

 

One problem with fixing, is that it limits your options, such as if you had to sell or if you wanted to knock down and build something else, etc.

There is also the option of fixing part of the loan, so if you wanted to redevelop for example it wouldn't be a problem. Many people split thier loan like this to get the best of both worlds, as in a 50/50 bet on variable & fixed rates.

But if fixing is right for you, i'd say go for about 4 years. I say this because i'm guessing rates will be pretty crap in about 2 years time, so you'd be better off settling on a tiny bit crapper rate for longer, instead of landing in a really crap rate!

But at the end of the day, it's all a gamble, and trying to predict the future isn't easy, which is just one reason why everything i'm saying here can be completely wrong! There are heaps of possible scenarios that can see rates just as low in two years time, just as there are plenty of reasons why rates can be 10% or more in two years time.

Remember, that this is all my opinion, and i could be wrong

 

IMO, if you're going to struggle to repay and can't afford a price hike then fix it.
If you can afford a bit more then take a gamble for the tracker - overpaying now while life is sweet and knocking years off your mortgage.

Just remember rates are historically v v low and just 15 years ago would be 10%+ so there is plenty of room for it to rise...

Spoiler

Oh, and btw I have a 100% mortgage fixed at 6.09% from August 2007 so clearly my own advice was wasted on me!!

 

First of all congratulations on your successful bid.

I'm not up to speed with the latest deals but that sounds pretty good to me. If your looking for the security of a fixed rate and those monthly payments are within your comfort zone then go for it. Remember that as interest rates are rock bottom, things are bound to go upwards... but you need to offset that with a slump in the housing market so hopefully the value of your home will rise at a comparable or higher rate.

Mind you with the amount of interest i've had in my place it doesn't seem like much of a credit crunch although we are in a bubble up here.

 

I have a 90% mortgage at 5.99% fixed for two from may 2008 and I am looking enviously at the variable rates at the mo. It'd save me almost £200 a month

Anyway, I chose fixed because regular, predictable monthly expenditure was very important to me, and if that is what you would like, then you should consider it strongly.

Also, with the market and economy as it is, anything other than a repayment mortgage is probably a bad choice. Interest only relies on savings or equity to repay the balance and neither of those are going to be particularly fruitful at the mo