Mortgages........!
Discussion
We had a mortgage advisor...nice bloke...who was helping us arrange a flexible mortgage.
He was very helpful, but a bit 'forgetful' and not the quickest off the mark, so I decided to do some of the leg work myself - which is when I realised I really didn't need him...
He did say though, that he thought my plan to go for a long term fixed rate mortgage of 10 to 15 years was daft.
He reckoned there is no point - just redo the deal in 3 or 5 years because the interest rate may come down...
Now I think he just wanted repeat business in 3 years, we want fixed rates as long a possible so we know where we are financially for the foreseeable future.
Is it me?
Or am I missing something here?
He was very helpful, but a bit 'forgetful' and not the quickest off the mark, so I decided to do some of the leg work myself - which is when I realised I really didn't need him...
He did say though, that he thought my plan to go for a long term fixed rate mortgage of 10 to 15 years was daft.
He reckoned there is no point - just redo the deal in 3 or 5 years because the interest rate may come down...
Now I think he just wanted repeat business in 3 years, we want fixed rates as long a possible so we know where we are financially for the foreseeable future.
Is it me?
Or am I missing something here?
Minimax 
Actually, I'd be inclined to agree with hm there. Interest rates won't go any higher in the current economic climate, instead they're more likely to stay on hold or drop slightly over the course of the next 3-5 years.
You're right on the point about needing an adviser though. Unless you're a complete basket case, then you should be able to seek the best deal out yourself. All my adviser did for me was point me in the direction of the mortgage and fill the form in for me!
You're right on the point about needing an adviser though. Unless you're a complete basket case, then you should be able to seek the best deal out yourself. All my adviser did for me was point me in the direction of the mortgage and fill the form in for me!
ive just taken out my first mortgage and the lady who did out advising was very helpful. i do agree that they can be a bit pointless as with a small amount of leg work and trip to www.moneyfacts.co.uk and thats all you need. look at them as a paper shuffler and a phone monkey and you'll then reliase there worth 
plus ours didnt charge as they made enough commission along with the building and contents, always a result.
also i went for a 5yr fixed as it was a good rate, the interest rates are so low that i cant see them dropping enough to make you think shit i lost out there, but 5yrs at a good rate will always hold you good if it suddenly shot up steeply. just my 2p'nce.
plus ours didnt charge as they made enough commission along with the building and contents, always a result. also i went for a 5yr fixed as it was a good rate, the interest rates are so low that i cant see them dropping enough to make you think shit i lost out there, but 5yrs at a good rate will always hold you good if it suddenly shot up steeply. just my 2p'nce.
Capped mortgages might be more of an option, wont go above a certain rate but will go down if the interest rate drop.
Make sure you dont have any tie in at the end of any fixed or capped period.
We got an advisor to do ours and found a mortgage that I couldnt find anywhere else but was a stonking deal. So the good ones can be worth it we didnt pay they just got the "finder fee" from the lender.
If you feel things are not progressing fast enough use another advisor, they should be wanting to help you as they will hope that you will also get your life insurance through them etc.
Make sure you dont have any tie in at the end of any fixed or capped period.
We got an advisor to do ours and found a mortgage that I couldnt find anywhere else but was a stonking deal. So the good ones can be worth it we didnt pay they just got the "finder fee" from the lender.
If you feel things are not progressing fast enough use another advisor, they should be wanting to help you as they will hope that you will also get your life insurance through them etc.
Interest rate expectations
Interest rates are expected to remain broadly flat. Whilst high energy prices have had an effect on headline inflation and the Bank of England raised rates, core inflation is under control, and headline interest rates were reduced in August 2005 and are expected to be reduced further in 2006. The UK economy has matured with inflation held in check by the Bank of England, which, since June 1997, has set monetary policy independently of the government.
UK Base Rates, 1980 – 2005.
Indeed, there was considerable volatility in rates before 1997, with several periods where the cost of borrowing had to rise sharply to offset earlier interest rate reductions. Between 1980 and June 1997, the Base rate ranged between a high of 17% and a low of 5.25%. The average rate was nearly 10.4%. By contrast, rates since June 1997 have averaged barely half this level (5.2%), standing in a comparatively narrow range of between 3.5% and 7.5%.
Simply, base rates since independance of the bank, are a function of GDP+RPI. GDP is forecast to fall, albeit slight, and RPI looks relatively stable.
Best option at the moment IMHO is "offset" if you have any spare capital, but long term fixes help planning. Wait though as market expects at least one more drop of UK rate by the summer.
Interest rates are expected to remain broadly flat. Whilst high energy prices have had an effect on headline inflation and the Bank of England raised rates, core inflation is under control, and headline interest rates were reduced in August 2005 and are expected to be reduced further in 2006. The UK economy has matured with inflation held in check by the Bank of England, which, since June 1997, has set monetary policy independently of the government.
UK Base Rates, 1980 – 2005.
Indeed, there was considerable volatility in rates before 1997, with several periods where the cost of borrowing had to rise sharply to offset earlier interest rate reductions. Between 1980 and June 1997, the Base rate ranged between a high of 17% and a low of 5.25%. The average rate was nearly 10.4%. By contrast, rates since June 1997 have averaged barely half this level (5.2%), standing in a comparatively narrow range of between 3.5% and 7.5%.
Simply, base rates since independance of the bank, are a function of GDP+RPI. GDP is forecast to fall, albeit slight, and RPI looks relatively stable.
Best option at the moment IMHO is "offset" if you have any spare capital, but long term fixes help planning. Wait though as market expects at least one more drop of UK rate by the summer.
tb rich said:
look at them as a paper shuffler and a phone monkey and you'll then reliase there worth
ignorance? or offensive? or possibly both?
what an ill informed view. I can only assume (charitable mode: on) that you've not met many IFA's
tb rich said:
also i went for a 5yr fixed as it was a good rate, the interest rates are so low that i cant see them dropping enough to make you think shit i lost out there, but 5yrs at a good rate will always hold you good if it suddenly shot up steeply. just my 2p'nce.
however you make a good point here
I think it's important to remember that not all cases are as straight forward for people as they may be for the average well to do PHer
minimax said:
look at them as a paper shuffler and a phone monkey and you'll then reliase there worth
ignorance? or offensive? or possibly both?
what an ill informed view. I can only assume (charitable mode: on) that you've not met many IFA's
I have met or spoken to quite a few in my time and have to say that at least 50% (of those I have met) are unfortunately the above, one came so close to losing me a purchase that after 3 months of incompetance and a failure to understand the basic terms of the mortgage he was proposing that I was almost violent with him. I agree however that mass generalisations are never good and to add balance, 2 of my current mortages on buy to lets would not have been possible without a broker (I even approched the lender of one property direct for a loan on another property and they said it was only available through the broker).
Find a good broker and, much like you would a good conveyancer, stick with them. Personally I would rather pay them a fee for the service and be hopeful that I was getting unbiased advice, not just the deal that was reaping them the most commission. Wherever commisions are involved, always ask to see the commission figures as well, I believe that you have a right to see these and will often give you a better idea of how independant the advice is.
minimax said:
I think it's important to remember that not all cases are as straight forward for people as they may be for the average well to do PHer
yeah like mine. I needed a true self cert, and to complicate it at the time I hadnt sold the old place, was borrowing 100k from the folks to bridge it and my basic salary is only 12k, the rest being in dividends from my ltd company...
The IFA i used did make a nice bit of commision but then he did do all the running around and form filing , oh yes and took us both out for a nice expensive meal after the deal was done...
We did a discounted rate for the first 2 years, and I'll use him again to renegotiate a new mort when the 2 years are up, should be a lot easier now though as with just the one house there should be more options....
2.5 years ago I organised a FIxed Rate 10 year mortgage at 4.66 % (with brittannia) which takes me nicely to pay it off in the same time.
My wife's friends husband is a financial advisor and was very interested in seeing what he might have suggested had I checked with him first.
He said that I'd "Done Well" but said that normally he'd suggest 5 years as a max. I'm just hoping the interest rate goes up to 15 % so I can act like a smug t
t !!!
My wife's friends husband is a financial advisor and was very interested in seeing what he might have suggested had I checked with him first.
He said that I'd "Done Well" but said that normally he'd suggest 5 years as a max. I'm just hoping the interest rate goes up to 15 % so I can act like a smug t
t !!! touchingcloth said:
look at them as a paper shuffler and a phone monkey and you'll then reliase there worth
ignorance? or offensive? or possibly both?
what an ill informed view. I can only assume (charitable mode: on) that you've not met many IFA's
I have met or spoken to quite a few in my time and have to say that at least 50% (of those I have met) are unfortunately the above, one came so close to losing me a purchase that after 3 months of incompetance and a failure to understand the basic terms of the mortgage he was proposing that I was almost violent with him. I agree however that mass generalisations are never good and to add balance, 2 of my current mortages on buy to lets would not have been possible without a broker (I even approched the lender of one property direct for a loan on another property and they said it was only available through the broker).
Find a good broker and, much like you would a good conveyancer, stick with them. Personally I would rather pay them a fee for the service and be hopeful that I was getting unbiased advice, not just the deal that was reaping them the most commission. Wherever commisions are involved, always ask to see the commission figures as well, I believe that you have a right to see these and will often give you a better idea of how independant the advice is.
all fair enough, I get touchy about people over generalising about things so I was a bit reactionary
re: the point about seeing commission, if the amount they receive from the lender (known as the procuration fee) is more than £250 they must declare it to you.
all information including commission will be on the Key Facts Illustration which must be presented to the customer as the precursor to the actual explanation of the recommendation...unless it's a BTL mortgage in which case it's an unregulated transaction whereupon the customer must be given a terms of business letter whi has much the same information on it
minimax said:
look at them as a paper shuffler and a phone monkey and you'll then reliase there worth
ignorance? or offensive? or possibly both?
what an ill informed view. I can only assume (charitable mode: on) that you've not met many IFA's
tb rich said:
also i went for a 5yr fixed as it was a good rate, the interest rates are so low that i cant see them dropping enough to make you think shit i lost out there, but 5yrs at a good rate will always hold you good if it suddenly shot up steeply. just my 2p'nce.
however you make a good point here
I think it's important to remember that not all cases are as straight forward for people as they may be for the average well to do PHer
Or it may have just been a light hearted forum comment
and mainly aimed at the IFA in question at the begining of the thread. - no offence intended to any IFA's. My girfriends father actually is an IFA so I have met a few!
My biggest worry with any fixed rate mortgage is the penalties for early redemption. If you need to sell within the fixed period you can end up paying £1000s in penalties.
I had a job with a very well known firm in a secure profession and my office was shut within 6 months of purchasing a house. Circumstances really can change very quickly.
If it weren't for redemption penalties they are a great idea
I had a job with a very well known firm in a secure profession and my office was shut within 6 months of purchasing a house. Circumstances really can change very quickly.
If it weren't for redemption penalties they are a great idea
Coco H said:
My biggest worry with any fixed rate mortgage is the penalties for early redemption. If you need to sell within the fixed period you can end up paying £1000s in penalties.
I had a job with a very well known firm in a secure profession and my office was shut within 6 months of purchasing a house. Circumstances really can change very quickly.
If it weren't for redemption penalties they are a great idea
the vast majority of fixed (or any other type) deals will allow you to port the deal to a new property..not ideal if you're going in to rented but great otherwise
The Financial Consultant
A Financial Consultant parks his brand new Porsche in front of the office
to show it off to his colleagues. As he's getting out of the car, a lorry
comes speeding along too close to the kerb and takes off the door before
zooming off.
More than a little distraught, the consultant grabs his mobile and calls
the police. Five minutes later, the police arrive. Before the policeman
has a chance to ask any questions, the consultant starts screaming
hysterically:
"My Porsche, my beautiful granite grey Porsche is ruined. No matter how
long it's at the panel beaters it'll simply never be the same again!"
After the consultant finally finishes his rant, the policeman shakes his
head in disgust. "I can't believe how materialistic you bloody Financial
Consultants are," he says. "You lot are so focused on your possessions
that you don't notice anything else in your life."
"How can you say such a thing at a time like this?" sobs the consultant
looking at his damaged Porsche.
The policeman replies, "Didn't you realise that your right arm was torn
off
when the truck hit you."
The consultant looks down in horror ........"F***ING HELL !" he
screams........ "Where's my Rolex ????..."
A Financial Consultant parks his brand new Porsche in front of the office
to show it off to his colleagues. As he's getting out of the car, a lorry
comes speeding along too close to the kerb and takes off the door before
zooming off.
More than a little distraught, the consultant grabs his mobile and calls
the police. Five minutes later, the police arrive. Before the policeman
has a chance to ask any questions, the consultant starts screaming
hysterically:
"My Porsche, my beautiful granite grey Porsche is ruined. No matter how
long it's at the panel beaters it'll simply never be the same again!"
After the consultant finally finishes his rant, the policeman shakes his
head in disgust. "I can't believe how materialistic you bloody Financial
Consultants are," he says. "You lot are so focused on your possessions
that you don't notice anything else in your life."
"How can you say such a thing at a time like this?" sobs the consultant
looking at his damaged Porsche.
The policeman replies, "Didn't you realise that your right arm was torn
off
when the truck hit you."
The consultant looks down in horror ........"F***ING HELL !" he
screams........ "Where's my Rolex ????..."
Gassing Station | The Pie & Piston Archive | Top of Page | What's New | My Stuff