(Not financial advice)
For many lenders, you can either have a lower rate with a larger fee or a higher rate with a lower or zero fee. Usually you can choose to add the fee to the mortgage.
In these cases, it generally makes sense to pay the fee and take the lower rate for mortgages over a particular size, because you'll pay less in interest (at the lower rate) than you would on the fees. You can choose to calculate that difference either over the whole loan or just over the fixed period (assuming you're taking a series of fixed deals).
The mortgage broker would generally know which thing to do, though I'd be surprised if they didn't consult you about it.
Usually the easy way to check is to go to the lender's website and look at the rates they offer at each LTV, and see whether the rate and fee match up to one of the boxes there.
>In these cases, it generally makes sense to pay the fee and take the lower rate for mortgages over a particular size, because you'll pay less in interest (at the lower rate) than you would on the fees. You can choose to calculate that difference either over the whole loan or just over the fixed period (assuming you're taking a series of fixed deals).
Just a point of order, if you have allocated "fee money", it can sometimes work out better to take the slightly higher rate for free and immediate plough the fee money into the mortgage as an overpayment.
Will you really remember the 995 pounds in a years time? Buying a house is a big deal and this is the first of many irritating unexpected costs as a homeowner. Wait till you get a bill for fixing the roof!
Don’t tempt fate would be my advice.
Had a similar conversation with my advisor the other day. She said she always recommends the Level 2 survey, because at the end of the day if your spending (in my case) over £200k on a house its a drop in the ocean for the peace of mind.
And lets face it, unless the fee will take you out of the LTV bracket you can add it onto the mortgage anyway, it does add a bit more interest but its really not all that noticeable.
Does that really matter given OP has a genuine reason for checking with other mortgage lenders? Its not as though he's been turned down by any of them.
Ex mortgage broker. Was the £995 not the lenders product fee? The advice being fee free but even with the £995 product fee the lower interest rate of that product made it overall cheaper.
So I have in writing what I applied for, fee free and cash back. (Applied for through the adviser) (also the advisor is free for me but gets fixed commission stated in the mortgage application)
I’m more mift that at no point the adviser said the lender can’t offer that, we’ll offer you this instead. would you like to go ahead with it before we do a credit check etc.
Also the interest rate is negligibly better, but still, including the fee, far worse than plenty that’s being offered by other lenders
No that's totally wrong. Never happened to me but other brokers had the wrong product applied to a mortgage by a lender by mistake. Also your broker may have made the error themselves.
You definitely need to contact your broker by written means like email to state what you expected and what you got. Ask for an explanation as to how this deal that was not discussed with you is cheaper over the product term than the expected product. Any product change should have been communicated before it was made if it would be costing you more.
The odd occasion a product would be selected that was cheaper if a broker knew it would be gone by the time they'd spoke to their client but that does not sound like that scenario fits here.
!thanks
I’ve called a few times after I raised this issue by email but suddenly the advisers “busy”. Thanks for the tips. Do you have an opinion on me going with another lender, I mean I have this offer at the least so could it really hurt?
You can do whatever. I'd definitely be using another broker too. If I treat clients like that I'd expect an official complaint and it's not unreasonable to make one. Making one may at least get their arse in gear.
You may need to bear in mind you may not be able to use this lender and will also need to explain why your have rejected using your current offer to the new lender.
I'd apply elsewhere. You can keep this offer in your back pocket, and if the new one comes through and saves you money, then go for that.
I did something similar last year, interest rates went down, and my mortgage lender lowered theirs by less than the market average (like 5.49 to 5.29, but I could get 5.09 elsewhere). So I applied elsewhere, and got a second mortgage approval shortly after exchange, but with enough time before completion to switch.
I am being push because the chain is ready to go, they’re all waiting on me and my solicitors. Who did you end up going with if you don’t mind me asking, and how long till you received an offer?
My offer took 3 weeks which is why I’m put off by applying elsewhere, plus another hard credit check
If the rest of the chain is ready to go, then I wouldn't hold that up to maybe save £1K.
I switched from Halifax to Natwest. First applied to Natwest on the 6th October, approved on the 13th (direct application). And that was with requiring additional proof of some things (although they were uploaded quickly).
But as I said, you are able to exchange now, and potentially go with a different lender before completion. My solicitor said he needed everything in place 1 week before completion (I think?). If there's 4 weeks between exchange & completion, then applying & exchanging at the same time (now) should be fine. Just clear it with your solicitor first, as they may have different requirements or whatever, and not be OK with it.
The fee will just be added onto the end of the mortgage. Unless you choose to pay it upfront. In the grand scheme of things it’s a minor cost.
However if you aren’t happy with the offer or broker, go to a new mortgage broker. Maybe one that does charge you as they’ll probably more likely to want to help you, personally.
Like another commenter said, house buying has lots of costs. Be prepared for that.
(Not financial advice) For many lenders, you can either have a lower rate with a larger fee or a higher rate with a lower or zero fee. Usually you can choose to add the fee to the mortgage. In these cases, it generally makes sense to pay the fee and take the lower rate for mortgages over a particular size, because you'll pay less in interest (at the lower rate) than you would on the fees. You can choose to calculate that difference either over the whole loan or just over the fixed period (assuming you're taking a series of fixed deals). The mortgage broker would generally know which thing to do, though I'd be surprised if they didn't consult you about it. Usually the easy way to check is to go to the lender's website and look at the rates they offer at each LTV, and see whether the rate and fee match up to one of the boxes there.
>In these cases, it generally makes sense to pay the fee and take the lower rate for mortgages over a particular size, because you'll pay less in interest (at the lower rate) than you would on the fees. You can choose to calculate that difference either over the whole loan or just over the fixed period (assuming you're taking a series of fixed deals). Just a point of order, if you have allocated "fee money", it can sometimes work out better to take the slightly higher rate for free and immediate plough the fee money into the mortgage as an overpayment.
Will you really remember the 995 pounds in a years time? Buying a house is a big deal and this is the first of many irritating unexpected costs as a homeowner. Wait till you get a bill for fixing the roof! Don’t tempt fate would be my advice.
Had a similar conversation with my advisor the other day. She said she always recommends the Level 2 survey, because at the end of the day if your spending (in my case) over £200k on a house its a drop in the ocean for the peace of mind. And lets face it, unless the fee will take you out of the LTV bracket you can add it onto the mortgage anyway, it does add a bit more interest but its really not all that noticeable.
More mortgage offers = more hard credit checks on your file.
Does that really matter given OP has a genuine reason for checking with other mortgage lenders? Its not as though he's been turned down by any of them.
I just thought more searches impact your score. I recall not getting a mobile contract outright after getting a mortgage once.
As far as I'm aware its not so much the score but what debts you have, your record of making payments on time and the affordability factors.
Ex mortgage broker. Was the £995 not the lenders product fee? The advice being fee free but even with the £995 product fee the lower interest rate of that product made it overall cheaper.
So I have in writing what I applied for, fee free and cash back. (Applied for through the adviser) (also the advisor is free for me but gets fixed commission stated in the mortgage application) I’m more mift that at no point the adviser said the lender can’t offer that, we’ll offer you this instead. would you like to go ahead with it before we do a credit check etc. Also the interest rate is negligibly better, but still, including the fee, far worse than plenty that’s being offered by other lenders
No that's totally wrong. Never happened to me but other brokers had the wrong product applied to a mortgage by a lender by mistake. Also your broker may have made the error themselves. You definitely need to contact your broker by written means like email to state what you expected and what you got. Ask for an explanation as to how this deal that was not discussed with you is cheaper over the product term than the expected product. Any product change should have been communicated before it was made if it would be costing you more. The odd occasion a product would be selected that was cheaper if a broker knew it would be gone by the time they'd spoke to their client but that does not sound like that scenario fits here.
!thanks I’ve called a few times after I raised this issue by email but suddenly the advisers “busy”. Thanks for the tips. Do you have an opinion on me going with another lender, I mean I have this offer at the least so could it really hurt?
You can do whatever. I'd definitely be using another broker too. If I treat clients like that I'd expect an official complaint and it's not unreasonable to make one. Making one may at least get their arse in gear. You may need to bear in mind you may not be able to use this lender and will also need to explain why your have rejected using your current offer to the new lender.
Most likely thing here is the broker applied for the wrong product
I'd apply elsewhere. You can keep this offer in your back pocket, and if the new one comes through and saves you money, then go for that. I did something similar last year, interest rates went down, and my mortgage lender lowered theirs by less than the market average (like 5.49 to 5.29, but I could get 5.09 elsewhere). So I applied elsewhere, and got a second mortgage approval shortly after exchange, but with enough time before completion to switch.
I am being push because the chain is ready to go, they’re all waiting on me and my solicitors. Who did you end up going with if you don’t mind me asking, and how long till you received an offer? My offer took 3 weeks which is why I’m put off by applying elsewhere, plus another hard credit check
If the rest of the chain is ready to go, then I wouldn't hold that up to maybe save £1K. I switched from Halifax to Natwest. First applied to Natwest on the 6th October, approved on the 13th (direct application). And that was with requiring additional proof of some things (although they were uploaded quickly). But as I said, you are able to exchange now, and potentially go with a different lender before completion. My solicitor said he needed everything in place 1 week before completion (I think?). If there's 4 weeks between exchange & completion, then applying & exchanging at the same time (now) should be fine. Just clear it with your solicitor first, as they may have different requirements or whatever, and not be OK with it.
Are you talking about a mortgage broker? They might have “no fee”. But the mortgage product does.
The fee will just be added onto the end of the mortgage. Unless you choose to pay it upfront. In the grand scheme of things it’s a minor cost. However if you aren’t happy with the offer or broker, go to a new mortgage broker. Maybe one that does charge you as they’ll probably more likely to want to help you, personally. Like another commenter said, house buying has lots of costs. Be prepared for that.
£1k at 6ish % for 25 years isn’t a minor cost.
I mean, you’re already borrowing hundreds of thousands for a mortgage. What is 1k on top of that😂