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Thread: Online Mortgage advisors/rates? plus some other questions

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    Online Mortgage advisors/rates? plus some other questions

    Hi i am looking to purchase my first house in london zone 4/5 and was wondering if there are any websites to check whats the cheapest and bets deal i can get for a mortgage.

    am i better off just speaking to each individual bank or is there a website that can compare them all?

    i am not looking over 250k for a property just to keep the stamp duty low which is 3% currently if i am correct.

    How much would i need to purchase a house besides the deposit?

    from what i can see, i would need to pay for the above:

    • deposit(10% i will give for a 250k or below on a 30+ year mortgage)
    • stamp duty tax
    • solicitor fees


    Am i missing anything?

    Also, what are the typical expenses i would need to pay per month once i own my own property. so far i know of these things:

    • mortgage repayments 1200pm
    • gas ??
    • electric ??
    • water ??
    • council tax ??
    • Food 400pm
    • building insurance ??
    • broadband 20pm
    • Car one(insurance 45pm, car service 300 a year)
    • Car Two(insurance 100+pm, free for another 4 years)
    • Rainy day/savings 200-300pm






    I have another question though. i plan to have a stab at doing contract work as i can earn double what i am earning now getting 400 a day or more. i heard mortgage lenders dont like contractors and prefer people working on a stable perm role(nowadays what job is stable?)

    Thanks in advance
    Last edited by j.o.s.h.1408; 30-10-2012 at 12:59 PM.

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    Banhammer in peace PeterB kalniel's Avatar
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    Re: Online Mortgage advisors/rates? plus some other questions

    Moneysavingexpert website/forums has just about everything you need, both in terms of guides and helpful advice on the forums. I can't possibly provide as much useful information as there, but some quick tips from someone who's just gone through it:

    - mortgage interest rates will vary according to your loan to value ratio (inverse of % deposit essentially). To get the best rates try and get your deposit to 35%. It therefore may be cheaper overall to rent somewhere cheap and build up your deposit further (you'd have to work out which cost more - the difference in your interest or the rent).

    - if you don't want to do your own research/ringing up then mortgage brokers are probably worth a look - most people I know used them, I did not however, because..

    - some mortgage deals are not available to brokers, only direct applications from the customer. For example, First Direct. I supposed you could always go for both a broker and your own independent research. Don't know if you'd have to pay for a brokers time if you don't use one of their options however.

    - as well as the fees mentioned, you need to pay for a survey as part of the mortgage approval from the bank. There are different levels of survey available, the bank will say what the minimum level of survey they need is, though you might want more depending on the age of the property etc.

    - you also need house insurance - this will be a condition of the mortgage so needs to be in place in time to cover completion, so consider it part of your upfront costs for the start, and also ongoing costs.

    - don't forget moving costs, and leaving enough money to pay for your first set of bills, and allow for any overlap of your current housing situation/bills as the buying process can unexpectedly drag on

    - don't forget that unless you fix, mortgage interest rates and thus repayments can increase at relatively short notice - keep enough in easily accessible savings to pay for a few months repayment or sudden increases in rates.

    We can't possibly tell you what your bills will be - they will depend on the type/size/location of house, your lifestyle etc. etc.

    edit:
    Quote Originally Posted by j.o.s.h.1408 View Post
    I have another question though. i plan to have a stab at doing contract work as i can earn double what i am earning now getting 400 a day or more. i heard mortgage lenders dont like contractors and prefer people working on a stable perm role(nowadays what job is stable?)
    Contract work is fine, if you can show a typical level of earnings over the last three months say. If you are moving to contract work you might need some time to establish a history of earnings that the bank can use to assess your likely income.

    edit2:

    Read this before asking any more questions:
    http://www.moneysavingexpert.com/mor...mortgage-guide
    Last edited by kalniel; 30-10-2012 at 01:12 PM.

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    Re: Online Mortgage advisors/rates? plus some other questions

    "Missing" might include contents insurance, unless you lump it in with buildings insurance in a dual policy.

    A number of those expenses will be impossible to quantify without knowing a lot more about the building. For instance, size, number of exposed walls (a terrace, especially mid-terrace, is far more thermally efficient than a bungalow, because you have neighbours either side either minimising heat loss through those walls, or possibly, even helping to heat you if they like their heat up high), the type and extent of thermal insulation (walls, loft, etc), the efficiency of the boiler, the quality (and presumably presence) of double-glazing, and so on.

    Put it this way, my gas bill now is less than half what it was a few years ago, due the expenditure of a small flipping fortune on a new boiler and far better double glazing.

    Much the same could be said about electricity bills, because it depends on what you connect and turn on, and how you live your lifestyle.

    Also, of course, do you cook electric or gas? Do you have solar panels? And so on.

    Council tax varies depending on where you are, and on the valuation of the property at the relevant date.

    Water rates .... how many baths do you have compared to showers? How many people are living there? Obviously, a lot more water gets used for washing and loo flushing if it's you, the wife and eight kids than it does if it's you on your own.

    As for getting the mortgage, I can;t comment there other than generally as I don't have one, and the last time I applied for one was, well, let's just say before the crash, and I'm not talking about the 2007/8 one.

    All I would say is to be aware, as you know doubt are, that the only people that can give truly independent advice is people working for you, on a fee basis, and not either restricted on what products they can represent, or where they benefit from any kind of commission, or achieving of product-related sales targets. And, generally, you'll pay for that kind of advice merely because it isn't being paid for by hidden charges or commissions.

    Personally, I generally don't trust purchasing advice from someone trying to sell me something, and that most emphatically includes banks.

    So, all I'd say is that research tends to pay off. It cab be slow, painstaking, laborious and a colossal pain the the ass, but when you consider how much a mortgage costs you, over a period, it's worth doing the legwork.

    Also, consider carefully not just the costs but the T&C's. Are there any early-exit fees? What about termination fees? You might think that the latter is 25 years off and doesn't matter to you. That's what a friend thought, right up until her got a great job offer, overseas, about 18 months in.

    If a mortgage is fixed, what happens when the fixed term expires? You risk being locked in, if your circumstances change, to whatever the existing lender replaces it with. The days of chopping and changing mortgages when you change underwear are long gone. It's a seller's market out there, mortgage-wise. Deals that save you money now might end up costing in the long-run. Does any low-start rate merely back up the charges to be loaded on in a few years? If so, that's fine provided you know it, and take account of it, but a less risky option might be to avoid those fancy structures of mortgage product.

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    Re: Online Mortgage advisors/rates? plus some other questions

    Good point about the survey, Kal. And the cost of that can vary a lot. Josh, if there's ANY doubt about the condition of the house, get a proper full survey. It'll cost, but it'll give you far better early warning of problems, and may well result in bargaining power to get the house price down anyway. The "basic" survey is usually aimed at getting nothing more than an assurance for the mortgage lender that they can sell the place out from under you, if need be, and it's worth what they lend.

    I know a couple that bought a house I considered myself a year or so back, and they ended up with nearly £60k in largely unexpected bills. Makes me glad I opted out of that one. A full survey would have prepared them for most of that.

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    Re: Online Mortgage advisors/rates? plus some other questions

    Sometimes there are fees for mortgages, avoid percentage based.

    Also be sure to have lots of activity of money coming in and out of your bank account. Will help with your application.

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    Re: Online Mortgage advisors/rates? plus some other questions

    Quote Originally Posted by pp05 View Post
    Sometimes there are fees for mortgages, avoid percentage based.

    Also be sure to have lots of activity of money coming in and out of your bank account. Will help with your application.
    Can you explain your statements? Yes, there are often arrangement fees as part of the mortgage, but you shouldn't avoid percentage based just because they're percentage based, you should chose the fee structure that suits you best. Remember any upfront fee is money that could otherwise gone towards the deposit, so at the very least you need to think of adding to it in terms of the average interest rate over the term of the mortgage, and at worse, it could contribute to you having a worse LTV and thus worse interest rates. Depending on the value of the mortgage a % upfront fee or even a higher mortgage interest rate (for no-fee mortgages) might be better value, or they might not. You have to do the sums. Ditto all the different types of mortgage and repayment options. See the guide I linked to for more info.

    And how does lots of bank activity help your application?

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    Re: Online Mortgage advisors/rates? plus some other questions

    Quote Originally Posted by kalniel View Post
    Can you explain your statements? Yes, there are often arrangement fees as part of the mortgage, but you shouldn't avoid percentage based just because they're percentage based, you should chose the fee structure that suits you best. Remember any upfront fee is money that could otherwise gone towards the deposit, so at the very least you need to think of adding to it in terms of the average interest rate over the term of the mortgage, and at worse, it could contribute to you having a worse LTV and thus worse interest rates. Depending on the value of the mortgage a % upfront fee or even a higher mortgage interest rate (for no-fee mortgages) might be better value, or they might not. You have to do the sums. Ditto all the different types of mortgage and repayment options. See the guide I linked to for more info.

    And how does lots of bank activity help your application?
    Kal you're correct, it was a general statement. It is worth doing sums but many struggle to do that. Also ask yourself is the fee really saving you that much on those special promotional deals as well. On smaller mortgages generally I would argue less so.

    On the account it is something I heard from a broker a few years ago when he looked a relatives account who was applying for a mortgage. Majority of people just have income go in, expenses go out. What really helps is account activity. E.g. if you have 500 in your account savings on Monday, take it out and stick 450 back in 2-3 days later. Then day after take out 400 and put back 450. Do this regularly. I don't know the logic behind it but it helps.

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    Re: Online Mortgage advisors/rates? plus some other questions

    Quote Originally Posted by j.o.s.h.1408 View Post
    I have another question though. i plan to have a stab at doing contract work as i can earn double what i am earning now getting 400 a day or more. i heard mortgage lenders dont like contractors and prefer people working on a stable perm role(nowadays what job is stable?)
    Stay in perm salaried job while applying for the mortgage.

    Many brokers only need as little as 3 months payslips for perm jobs on a mortgage
    -contract or self employed are scored much lower (IMO often unfairly) and need to provide much more info.
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    Re: Online Mortgage advisors/rates? plus some other questions

    can a solicitor help calculate my potential outgoings based on the property i made an offer with?

    for a 25 year mortgage i pay around 1.4k

    u reckon its worth it? 25 vs 30/35?

    what do i benefit from it besides paying off my mortgage 5/10 years earlier?

    edit, 25 year mortgage with natwest:

    Lender NatWest FTB
    Product Name FTB 5 year Fixed rate
    Type of Mortgage Fixed
    Initial Rate 4.79%
    APR 4.40%
    Max LTV 90%
    Actual Cost Over 5 Years £80,299.00
    Monthly Repayments £1,287.95
    Scheme Duration To January 2018
    Lender's Base Rate 4.00%
    Portable
    Cashback £0 paid to you on completion.
    Early Repayment Charge 5% of outstanding loan before 31/01/2014, 4% of outstanding loan next year, 3% of outstanding loan next year, 2% of outstanding loan next year, 1% of outstanding loan for scheme period
    Number of Monthly Repayments 63

    35 year mortgage with natwest

    Lender NatWest FTB
    Product Name FTB 5 year Fixed rate
    Type of Mortgage Fixed
    Initial Rate 4.79%
    APR 4.30%
    Max LTV 90%
    Actual Cost Over 5 Years £69,357.40
    Monthly Repayments £1,105.59
    Scheme Duration To January 2018
    Lender's Base Rate 4.00%
    Portable
    Cashback £0 paid to you on completion.
    Early Repayment Charge 5% of outstanding loan before 31/01/2014, 4% of outstanding loan next year, 3% of outstanding loan next year, 2% of outstanding loan next year, 1% of outstanding loan for scheme period
    Number of Monthly Repayments 63

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    Banhammer in peace PeterB kalniel's Avatar
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    Re: Online Mortgage advisors/rates? plus some other questions

    Quote Originally Posted by j.o.s.h.1408 View Post
    can a solicitor help calculate my potential outgoings based on the property i made an offer with?
    Unless they know you intimately, no. A few things might help you get some clue:

    1) the energy ratings of the property. This is now mandatory, however the ratings last for 10 years so can be out of date. However you can probably assume that an energy band A property is going to be cheaper on the bills than an energy band E.

    2) the council tax band of the property.

    3) you *may* be able to get hold of a recent copy of the previous owner's utilities bills as part of the conveyancing process. Again, this doesn't account for lifestyle so isn't that much use, but it's something.

    u reckon its worth it? 25 vs 30/35?

    what do i benefit from it besides paying off my mortgage 5/10 years earlier?
    A longer term means lower monthly payments but more money overall wasted in interest payments to the bank.

    Plug some numbers into this tool:
    http://www.moneysavingexpert.com/mor...ate-calculator

    By the way, both of your mortgages above are 5.25yrs... A 25 year mortgage is 300 monthly repayments.

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    Re: Online Mortgage advisors/rates? plus some other questions

    It's worth getting as short a mortgage as you can afford. That extra 5-10 years could cost a large 5-figure sum over the life of the mortgage. Any quotes you get should give a total amount paid back at end of term sum, which is scary (usually at least double what you originally bought for). The quotes you have seem cheaper for the longer term mortgage because they are only quoting the amount paid during the fixed term.
    As for Adviser charging, there is a law coming in soon (next year, I think) where financial companies are no longer allowed to pay commission to FAs, so the FAs will have to charge an upfront fee. It's supposed to be in order to stop FAs pointing you towards the deal that gives them best commission, rather than being best for you...

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    Re: Online Mortgage advisors/rates? plus some other questions

    Quote Originally Posted by kalniel View Post
    Unless they know you intimately, no. A few things might help you get some clue:

    1) the energy ratings of the property. This is now mandatory, however the ratings last for 10 years so can be out of date. However you can probably assume that an energy band A property is going to be cheaper on the bills than an energy band E.

    2) the council tax band of the property.

    3) you *may* be able to get hold of a recent copy of the previous owner's utilities bills as part of the conveyancing process. Again, this doesn't account for lifestyle so isn't that much use, but it's something.


    A longer term means lower monthly payments but more money overall wasted in interest payments to the bank.

    Plug some numbers into this tool:
    http://www.moneysavingexpert.com/mor...ate-calculator

    By the way, both of your mortgages above are 5.25yrs... A 25 year mortgage is 300 monthly repayments.
    i dotn understand the bit in bold? both are different mortgages. one for 35 years and the other is 25 years. i pay an extra £200 for 25 years. the interest rates seems the same from those figures? i thought i pay less interest? Or do u mean that instead of paying interests for 35 years, i pay interest fro only 25 years thust in the long term, save money?

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    Re: Online Mortgage advisors/rates? plus some other questions

    Quote Originally Posted by j.o.s.h.1408 View Post
    i dotn understand the bit in bold? both are different mortgages. one for 35 years and the other is 25 years. i pay an extra £200 for 25 years. the interest rates seems the same from those figures? i thought i pay less interest? Or do u mean that instead of paying interests for 35 years, i pay interest fro only 25 years thust in the long term, save money?
    The number of monthly payments gives you the length of the term - it's 63 in both cases, which is 5.25 years. It looks like they're saying that for the first five years you pay these rates.. then they should go on to give you information about the remainder of the term but you haven't passed that on if they did. Because that remainder of term is longer for the 35 year mortgage the amount you pay each month should be less.

    In those examples you are paying
    a) 4.79% for five years, then if interest rates don't change* 4% for 20 years.

    b) 4.79% for five years, then if interest rates don't change* 4% for 30 years.

    The monthly repayments show you how much more you have to pay to pay it off in 25 years vs 35, as you can see, it's just less than £200 a month.

    If you plug the numbers into the link I gave you can see how much the difference in interest you save with the 25 year option is.

    *interest rates DO change - for the better and for the worse.

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    Re: Online Mortgage advisors/rates? plus some other questions

    Quote Originally Posted by kalniel View Post
    The number of monthly payments gives you the length of the term - it's 63 in both cases, which is 5.25 years. It looks like they're saying that for the first five years you pay these rates.. then they should go on to give you information about the remainder of the term but you haven't passed that on if they did. Because that remainder of term is longer for the 35 year mortgage the amount you pay each month should be less.

    In those examples you are paying
    a) 4.79% for five years, then if interest rates don't change* 4% for 20 years.

    You repay £1,288 per month
    Assuming your interest rate stays the same
    The total you'll repay, inc. interest and fees is £387,379


    b) 4.79% for five years, then if interest rates don't change* 4% for 30 years.

    You repay £1,106 per month
    Assuming your interest rate stays the same
    The total you'll repay, inc. interest and fees is £465,344


    The monthly repayments show you how much more you have to pay to pay it off in 25 years vs 35, as you can see, it's just less than £200 a month.

    If you plug the numbers into the link I gave you can see how much the difference in interest you save with the 25 year option is.

    *interest rates DO change - for the better and for the worse.
    added figures in bold.

    i pay an extra 77,965 overall if i do a 35 year mortgage!

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    HEXUS.social member Agent's Avatar
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    Re: Online Mortgage advisors/rates? plus some other questions

    Quote Originally Posted by j.o.s.h.1408 View Post
    added figures in bold.

    i pay an extra 77,965 overall if i do a 35 year mortgage!
    Don't ignore overpayments though. It's hugely situational (as with all mortgages), but in my case I went for a 30 year mortgage over a 25 which allowed me to save a bit more for a lump sum payment.

    If you can afford overpayments, do it. In my case I went for the cheapest, longest mortgage I could a few years back knowing interest rates were unlikely to change before the term was up (2 years). At Christmas I'll be making a significant overpayment that means I could lower my mortgage well below the initial suggested 25 years and still pay less than I would have before it
    Quote Originally Posted by Saracen View Post
    And by trying to force me to like small pants, they've alienated me.

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    Re: Online Mortgage advisors/rates? plus some other questions

    Quote Originally Posted by j.o.s.h.1408 View Post
    i pay an extra 77,965 overall if i do a 35 year mortgage!
    yessir

    Quote Originally Posted by Agent View Post
    Don't ignore overpayments though. It's hugely situational (as with all mortgages), but in my case I went for a 30 year mortgage over a 25 which allowed me to save a bit more for a lump sum payment.

    If you can afford overpayments, do it. In my case I went for the cheapest, longest mortgage I could a few years back knowing interest rates were unlikely to change before the term was up (2 years). At Christmas I'll be making a significant overpayment that means I could lower my mortgage well below the initial suggested 25 years and still pay less than I would have before it
    If no charges, then yes, the longer term gives you more flexibility - you can match the 25 year repayment rate or even exceed it and use that overpayment to either reduce the remaining monthly or (better) reduce the term of repayment. But beware charges..

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