# Mortgage help



## Dan_W (May 30, 2013)

Hi all,

Looking to buy our first home very soon and currently looking at mortgages.

When we originally was looking for a mortgage we went to an independent mortgage advisor who went through all the mortgages available to us. Most of them where pretty similar to be honest but he advised us that because we both banked with NatWest it may be worth going apply through them as they would have a record off us already. Obviously being a first time buyer my knowledge of mortgages isn't amazing. I have looked on money supermarket and the best rate is from Chelsea building society at 1.44% for a 2 year fixed rate. When I have looked on Natwest it is 1.94% for a 2 year fixed rate. My question to you is, what do I do? We really don't want to be declined as renting is just wasting our hard earned cash we could be putting into our own mortgage. Is it worth going through Chelsea or just stomaching the slightly higher rate from NatWest for two years then once we are on the property ladder then looking elsewhere?

Sorry for the extremely long topic.

Thank you for any advice given.

Dan


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## Dan_W (May 30, 2013)

To add to that Chelsea's overall cost for comparison is 5.1% where as NatWest is 4%. They make it so complicated for something that is stressful enough anyway.


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## bmerritt87 (Mar 24, 2013)

dan92 said:


> To add to that Chelsea's overall cost for comparison is 5.1% where as NatWest is 4%. They make it so complicated for something that is stressful enough anyway.


Hi, it's not just the initial rate that you look at to assess a mortgage. You have to take into account the product fee, the rate it will revert to at the end of the deal, and the incentives with the product. For example the Chelsea deal has a £1545 product fee with no incentives and reverts to a 5.65% SVR after 2 years which is almost 4 times the initial rate! it's also <65% ltv. Have you got 35% deposit? Now if your taking half a million pound mortgage the fee may be worth it but I'm guess as a first time buyer you want to keep costs down. How about looking for a FTB product with no fee, perhaps incentives such as valuation and cash back included and maybe a slightly longer fixed period to give piece of mind. 
A lot of people look for lowest rates but imo it has to be the full package that you look at. A good mortgage advisor should give you a range of options.


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## bmerritt87 (Mar 24, 2013)

Also bear in mind that not all lenders use brokers so before people start to say use a good broker/independent MA just bear that in mind. Sometimes even the brokers can't access the best deals if lenders don't accept introduced business. Start by looking at how much you want to pay upfront I.e. Product fee, val fee legal fees and look for a product that will fit within budget then obviously your deposit will determine the LTV products. Is it more important to get the very lowest cost upfront if so look at 2 year deals but bear in mind in 2 years rates may have gone up and you may find yourself having to pay much more. Rates to existing borrowers are generally not as good as to new customers. You could say you would re mortgage but you will then suffer the associated fees I.e. Product fee and solicitors again. As a FTB consider that a longer term fixed may be more suitable I.e. A 3 or 5 year fixed. I'm happy for you to inbox me if you want any help or advice.


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## Dan_W (May 30, 2013)

Thanks for your reply mate, I have a large deposit and would rather pay out now and keep the monthly cost down. They really make it much more complicated then it needs to be. After listening and reading about mortgages everyone think this is the time to get a mortgage as rates are about to rise obviously this is a gamble but maybe a 5 year plan would be better for safety.


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## Dan_W (May 30, 2013)

I have a meeting with the bank to discuss the mortgage properly on Friday, Also what sort of prices am I looking at paying for house insurance, haven't done a quote as of yet as I don't want to be phoned every 30seconds with people trying to sell it to me.


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## m4rkymark (Aug 17, 2014)

I wouldn't worry too much about the rate your going to go onto once your deal is over because chances are you will go onto another deal.


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## S63 (Jan 5, 2007)

dan92 said:


> I have a meeting with the bank to discuss the mortgage properly on Friday, Also what sort of prices am I looking at paying for house insurance, haven't done a quote as of yet as I don't want to be phoned every 30seconds with people trying to sell it to me.


Just like your car, house insurance prices vary greatly, shop around.


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## bmerritt87 (Mar 24, 2013)

m4rkymark said:


> I wouldn't worry too much about the rate your going to go onto once your deal is over because chances are you will go onto another deal.


This is not true, for two reasons. Firstly as mentioned most lenders offer higher rates to existing borrows at the end of introductory deals. The 2nd is some lenders can charge high fees to switch onto the best products at th end of the deal. As I said earlier, it's not just the introductory rate you need to look at. If the interest rate will treble at the end of 2 years and the charge you £1000 to go onto a better rate at double you initial rate it's still going to massive affect the monthly payment. Lenders don't make money on the initial deals, they make money when they retain you after the initial deal has finished. I appreciate as a FTB this may not be your main priority worrying about what may happen in 2 or 3 years time but it's an important factor. That's why potentially the longer term fixed products give that extra bit of security albeit for a slightly higher initial payment.


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## bmerritt87 (Mar 24, 2013)

S63 said:


> Just like your car, house insurance prices vary greatly, shop around.


My answer to this is speak to the lender who is providing the mortgage. 2 good reasons. They will want proof the house is adequatey insured before releasing funds and will be a condition on the mortgage that the solicitors have to comply with. A lot of lenders insist on been noted party on the policy which a lot of the cheaper online policy's won't do. Also in certain instances it is the responsibility of the buyer to insure the property between exchange and completion which if going with the lenders insurance is usually an added benefit of those policy's (but not in all cases)


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## m4rkymark (Aug 17, 2014)

bmerritt87 said:


> This is not true, for two reasons. Firstly as mentioned most lenders offer higher rates to existing borrows at the end of introductory deals.


they don't all offer higher rates to existing borrowers - some may well do this but they all don't. The building society we used to have our mortgage with(Nationwide) offered better rates for existing customers.



bmerritt87 said:


> The 2nd is some lenders can charge high fees to switch onto the best products at the end of the deal.


again they don't all do this - some may but not them all. Again Nationwide don't do this.


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## m4rkymark (Aug 17, 2014)

S63 said:


> Just like your car, house insurance prices vary greatly, shop around.


agreed - you can get massive savings by shopping around.


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## bmerritt87 (Mar 24, 2013)

m4rkymark said:


> they don't all offer higher rates to existing borrowers - some may well do this but they all don't. The building society we used to have our mortgage with(Nationwide) offered better rates for existing customers.
> 
> again they don't all do this - some may but not them all. Again Nationwide don't do this.


He isn't going to a building society though?? And my post did say most lenders not all. Your giving him advice based on your experience with 1 lender. I'm talking about General basics of the mortgage market that lenders make profit from retention of custom after initial rates.


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## Dan_W (May 30, 2013)

Thank you all for your help, we are looking to apply with NatWest because both me and my partner have banked with them for a number of years so hope we are more likely to be accepted, due to them having lots of information on us already. I'm now thinking fixing for a long period of time would be safer as the rates are quiet likely to rise.


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## Darlofan (Nov 24, 2010)

dan92 said:


> Thank you all for your help, we are looking to apply with NatWest because both me and my partner have banked with them for a number of years so hope we are more likely to be accepted, due to them having lots of information on us already. I'm now thinking fixing for a long period of time would be safer as the rates are quiet likely to rise.


It'll be easier like you say they know your financial history already. We move tomorrow and are remortgaging with existing mortgage provider as all they wanted were wage slips and credit card balances. When we looked at others they wanted to know everything from gyms to what we ate. Only exception was current mortgage provider and Natwest who we bank with as they said they know all that anyway.

Insurance wise you'll find Natwest expensive, get yourself onto confused.com etc and check them out, insurance on a house isn't as bad as you think, our 3 bed semi is £155 a year contents and buildings. DON'T be fobbed off with "oh you have to use us for insurance" you can use who you like. It will be a condition of the mortgage but all you have to do is show proof afterwards. 
Good Luck.


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## Dan_W (May 30, 2013)

Really hope it all goes well, viewing a place with a double garage on Saturday and really hope I'm not disappointed. Hoping it all goes well tommorow thank you all for your help.


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## Dan_W (May 30, 2013)

Also with credit scores what would most people deem to low?


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## chp (Jul 22, 2011)

dan92 said:


> Also with credit scores what would most people deem to low?


Despite what some credit rating companies would have you believe, there's no such thing as a specific standardised "credit score". Your credit worthiness will be based on your credit and repayment history, and this will be assessed and interpreted differently by each company you apply for credit with.


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## Dan_W (May 30, 2013)

chp said:


> Despite what some credit rating companies would have you believe, there's no such thing as a specific standardised "credit score". Your credit worthiness will be based on your credit and repayment history, and this will be assessed and interpreted differently by each company you apply for credit with.


I understand that the number itself isn't used but it gives you a rough idea. Also when will they want the deposit? im hoping I can add a little extra to it.


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