Mortgage advice

[Andy_W]

We took the hit last year and paid an early repayment penalty of around 1700 quid in order to take a new 5 year fixed. It is more important to us to have consistency in our payments. Ours went up approx. £170 per month, but if we had waited until April this year when the old product ended, it would have been up over £400 per month and that just isn't feasible for us.

We are quite lucky in that we put a large deposit down so our LTV rate is around 53% which should protect us for the house price decreases everyone is expecting.

Its interesting reading comments above from people and mortgage advisors. We used MAB and have for 10 years and the guidance we got really helped us see what worked for our circumstances. There isn't a one size fits all model.

I feel for everyone stuck on high LTV's or SVR's right now. Its a horrid situation to be in.

I've done that before with a 5 year fixed too, taking the hit early can save a lot in the long run, but it's just a case of gauging if you think things are going to get better or worse.

You made a great decision going to your advisor early (your probably figured things were going to get worse), and your advisor clearly backed that up

 

[ForssAwakens]

We took the hit last year and paid an early repayment penalty of around 1700 quid in order to take a new 5 year fixed. It is more important to us to have consistency in our payments. Ours went up approx. £170 per month, but if we had waited until April this year when the old product ended, it would have been up over £400 per month and that just isn't feasible for us.

We are quite lucky in that we put a large deposit down so our LTV rate is around 53% which should protect us for the house price decreases everyone is expecting.

Its interesting reading comments above from people and mortgage advisors. We used MAB and have for 10 years and the guidance we got really helped us see what worked for our circumstances. There isn't a one size fits all model.

I feel for everyone stuck on high LTV's or SVR's right now. Its a horrid situation to be in.

Ye a common question we get is what are most people doing, but it should have no bearing on what you want to do. As you say there sing a one size fits all, everyone is individual

 

[ForssAwakens]

I've done that before with a 5 year fixed too, taking the hit early can save a lot in the long run, but it's just a case of gauging if you think things are going to get better or worse.

You made a great decision going to your advisor early (your probably figured things were going to get worse), and your advisor clearly backed that up

I really doubt the adviser would have backed up ‘that things are going to get worse’ but will have rather listened to the concerns and advised to those concerns

Eg it’s more important for me to pay the erc now and take a chance in the rates than be pinged with even higher rates later

 

[BaronSmoggie]

I really doubt the adviser would have backed up ‘that things are going to get worse’ but will have rather listened to the concerns and advised to those concerns

Eg it’s more important for me to pay the erc now and take a chance in the rates than be pinged with even higher rates later

Yes, we told him what we were worried about and rather than try and predict the future he helped us to see where the crossing point for us would be in terms of % rates where the decision became an easy yes or no. That was key for us. I'm the only one that works, my wife is a full time mum to our daughter who has autism, so we have to make every penny count. Neither of us are particularly smart financially, we aren't trading shares, we just put money away every month in to savings, I have a work pension and we own our home, so we rely on people smarter than us to help us without an agenda and MAB have been great.

 

[ForssAwakens]

Yes, we told him what we were worried about and rather than try and predict the future he helped us to see where the crossing point for us would be in terms of % rates where the decision became an easy yes or no. That was key for us. I'm the only one that works, my wife is a full time mum to our daughter who has autism, so we have to make every penny count. Neither of us are particularly smart financially, we aren't trading shares, we just put money away every month in to savings, I have a work pension and we own our home, so we rely on people smarter than us to help us without an agenda and MAB have been great.

Sounds like you got cracking advice, and from what I hear the MAB are pretty good

 

[Boro in Devon]

I was until ten years ago, a mortgage risk consultant for a few of the major lenders, a few observations on the comments in this thread.

If the banks think that house prices will drop. They will tighten lending criteria, particularly for anyone with little equity in their property. So it will hit FTB's very hard and a mortgage will only be available for people with a clean credit rating.

If the banks think that interest rates will rise. The current affordability calculations often use a 5% interest rate as this is considered the norm, they will then use a stressed interest rate of an additional 2.5%. This can be flexed up at higher ltv's.

Current interest rates are approaching what is considered the norm. Current pricing is done by the accountants and is based upon the deals available from the money markets and so there is some variability. Mortgage criteria is assessed by using the econometric models and will be assuming that rates will not fall.

If you think that you can not afford your current payments. Talk to your mortgage lender quickly. I was part of a strategy called pre arrears. This was planned to stop you falling behind and in arrears. Things can be done with term/ interest rate/ interest only, to assist you. It is not in the banks interest to have you falling behind and them realising a loss in the event of repossession. We preferred to keep people in their house until they got clear of negative equity.

I hope that these points help, and good luck to everyone who is worried about their mortgage.

 

[alvez_49]

I actually fear people are going onto SVR expecting zirp to return early 2024. This is in my opinion madness.

 

[Andy_W]

I really doubt the adviser would have backed up ‘that things are going to get worse’ but will have rather listened to the concerns and advised to those concerns

Eg it’s more important for me to pay the erc now and take a chance in the rates than be pinged with even higher rates later

Depends on the MA/ FA I suppose, and I'm not sure about the rules of that for either, on what they can and can't say. I get on with my FA well, have been with the same guy for ~15 years, so I just say what I'm thinking and usually he's thinking the same thing, and he's effectively doing similar things which think I want to do, and I basically just want a sanity check.

 

[Andy_W]

I actually fear people are going onto SVR expecting zirp to return early 2024. This is in my opinion madness.

Going on the SVR would be absolute madness, but I don't think a 2-3 year tracker or discount variable would, and then maybe fixing or re-assessing from there, for some people anyway.

I don't think anyone is predicting going to back the 0-0.5% base rates, not from what I've seen anyway.

 

[Nano]

Depends on the MA/ FA I suppose, and I'm not sure about the rules of that for either, on what they can and can't say. I get on with my FA well, have been with the same guy for ~15 years, so I just say what I'm thinking and usually he's thinking the same thing, and he's effectively doing similar things which think I want to do, and I basically just want a sanity check.

Of course he is. You are suggesting all sorts of stuff that means big commission.

Most personal finance is simple and cheap. You shouldn't need an advisor unless you have a lot of money or need to avoid a lot of tax. There are odd cases like mortgages where brokers are privy to the better deals so it's worth paying.

 

[Andy_W]

Of course he is. You are suggesting all sorts of stuff that means big commission.

Most personal finance is simple and cheap. You shouldn't need an advisor unless you have a lot of money or need to avoid a lot of tax. There are odd cases like mortgages where brokers are privy to the better deals so it's worth paying.

Not fussed on the fees they're not high, especially in comparison to what I've saved. Also saves a lot of chew, also I just pay them through the company anyway. I've had a few deals where there's been no charge and I've just switched products online etc, not sure if they get a commission for that, but I'm not fussed if they do.

Mortgages get a bit complicated for me with being a director and not paid much via PAYE etc, mostly dividends etc, a few years back a lot of the online comparison tools wouldn't even factor for that (not even sure if they do now) and a lot of companies wouldn't entertain it (not even my own personal or company banks).

 

[ForssAwakens]

Depends on the MA/ FA I suppose, and I'm not sure about the rules of that for either, on what they can and can't say. I get on with my FA well, have been with the same guy for ~15 years, so I just say what I'm thinking and usually he's thinking the same thing, and he's effectively doing similar things which think I want to do, and I basically just want a sanity check.

Sounds like he’s quite good at massaging your ego to get your business

 

[Aet290204]

Sounds like he’s quite good at massaging your ego to get your business

I’m reminded of this bloke:

 

[Andy_W]

Sounds like he’s quite good at massaging your ego to get your business

Haha, whatever works for him, doesn't bother me in the slightest if he's made a few quid, glad he has, as he's helped save me a fortune in various ways, and helped a lot of friends out too.

 

[Andy_W]

I’m reminded of this bloke:

Yawn