Luke

Anyone in the business????Been chating with a few of the big players....

Looking at getting a 90% mortgage. Not wanting to pay lots of insurance fees etc.

Anyone else going for a first time mortgage??? What sort of deals are you getting??


(Edited to bring the loan down to 90%)

[Edited by Luke - 3/31/2003 9:58:08 AM]

OllieC

I flog 'em for a living, Luke.... and am deeply cynical of most of the financial industry. Generally you'll have lots more choice if you can stump up 10% deposit. Also, if you can stay within 3.5 times single income you'll probably get more choice. First time buyer's mortgages can be worth looking at (less fees etc.) - but beware of getting something for nothing.

Usually the only insurance you must have is buildings insurance but you should be allowed to buy insurance from whoever you want. You can shop around for this but some of the cheap providers also provide shoddy service as part of the deal. Critical Illness & Life cover is a good idea - think through the possible consequences of not having it – (e.g. having to sell a house whilst dieing from some disease) but you don't need it to borrow the money.

By law I can only talk about my organisation's products as I'm tied to that company. But I think we have the cheapest at 3.39%, fixed for 2 years, no tie-ins etc. Fees always vary from lender to lender. I reckon it's a bit low when the replys on here are from people trying to sell stuff - so I'm not going to tell you who I work for. Buy the Observer today and look in the money section. Then phone around and ask lenders what their criteria are.....

Hope this helps.

Ollie

MattW

Buy a copy of What Mortgage? (WHSmith stock it). Gives a good overview of latest products and usually some decent articles about house buying.

Diesel

Make sure you compare APR with APR as this will include fees etc.

I got a Northern Rock flexible mortgage at 3.99 disc for 3 years. You go for as much as you can, pay back what's left over after you have bought the house, and can then 'draw down' that money at a later date to buy a loaded BMW X5 and keep the Scoob too! Dohh daydreaming again I like the system cos it can reduce the DAILY interest you pay, and if I'm out of work for a bit it will be OK (as I've 'overpaid') and WITHOUT paying that £100 a month unemployment insurance.

Ohh and dont use 'tied' brokers - they cant look at the whole market for you. Even if you do use a broker check the deal direct with the mortgage company - it may be better direct.

Have you chosen curtains yet

OllieC

1) There's no such thing as a tied broker
2) "Independent" means "not tied" - it doesn't mean they will necessarily use the whole market - they get different commission depending on who's mortgage they sell. For example, some lender's don't pay any commission so their products are rarely recommended. The IFA must give "best advice". To most people this should usually be the same as "cheapest advice" but to them it can mean something completely different.
3) Don't rely on the APR - this was invented back in the 70’s when it was assumed that everybody would keep their mortgage with the same lender until it was paid off. One of the assumptions is that you will stay on SVR once any discount or fixed period has ended. You're just not going to do this nowadays. Much better to look at what it will actually cost you in £'s over, say, 2 or 5 years.
4) Fully agree with Diesel that being able to get your money back is great. I’m just about to spend all my hard repaid capital on a new WRX. The wife isn’t so keen on this feature of the mortgage……

fast bloke

Aim for 10% deposit - You should be able to avoid MIG entirely.
I give wholly independent advice - any good independant broker should do so regardless of proc fee. Otherwise you can sue their *** for the difference

(You will be obliged to take life insurance as well as buildings insurance. No-one cares about critical illness, contents, or MPI)

ChrisB

I wasn't obligied to take Life cover but I did as it added about 30p a month on top of critical cover.

OllieC

Quote:

"You will be obliged to take life insurance as well as buildings insurance"

Sounds like you're talking to55 there, m8..... which lenders insist on this?? Luke's trying to keep costs down - life cover might not be the best thing (i.e. if he's single) or might be something he'll look at later.

scoob_babe

I thought MIG could only be avoided if you were borrowing less than 70% not 90% - check this. When I bought my flat in 1997 and had 95% mortgage, I did have to pay the MIG which I added to monthly repayments however the market has changed a bit since!
PS both lenders i have dealt with (previous and current) wanted life insurance cover

fast bloke

OllieC - I am looking at a list of the companies that require life cover. You are correct - Life cover is not mandatory for every lender. However - About 90% will insist. Every company appears to insist on buildings cover. (No doubt you will post the exception to prove me wrong )

OllieC

Fast - saying you were talking to55 was a bit unnecessary/strong/offensive - sorry about that (but that's me first thing on a Monday morning when I've had an hour stolen by the daylight police...)

Good to hear an IFA putting customers first - but you have to admit that many are influenced by proc. fees. It's so hard for people to know who is putting them first and who is putting their commission first....

Would be interested to know who insists on life - never heard of anyone letting you off without buildings though.... CIC & PHI are my favourites anyway.

Take it easy

Ollie

fast bloke

Ollie - The lenders don't care if you are single or married with 15 kids. They don't want to have to sell your house if you die, as they technically need to reposses if from your estate, which they can't do until the estate has cleared probate. The total process can take between 6 months and two years. A fair number of lenders still ask for life policies and endowments to be assigned. I think this may be related to Northern Ireland probate system, as there is a strong bias of local companies asking for assignment of policies.

Our two biggest UK based lenders would probably be Halifax and Nationwide. Halifax insists on policy assignment and Nationwide requires that you have sufficient life insurance, but does not require assignment.

Proc fees don't vary that much for us. It would be unusual for there to be more than 50-100 quid between best and worst. Hardest part of my job is finding new clients. I am not going to risk losing one who should be an income stream for years to come over the sake of 100 quid.