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How long to fix for with a high rate

Last post Mon, Jan 21 2013, 9:50 PM by Kimbodia. 4 replies.
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  •  Mon, Jan 21 2013, 9:50 PM

    Re: How long to fix for with a high rate

    Thanks for your comments.

    I spoke to another broker today who said they couldn't offer us the amount we want and recommends we go with the Halifax deal. I'm now happy to stick with the Halifax. My big question now is which deal, the 2 year at 4.79% or the 5 year at 4.99%, can you or anybody take a punt at what the Halifax SVR is going to be in 2 years time???? ie above or below 4.99% ?? this is something way beyond me.

    In 2 years time if the SVR is really high we'll have to find a new deal and given my husbands work situation and the fact that I'll still be off work being a housewife we'll be forced to use the same broker again and thus pay the expensive broker and arragement fees again which will leave me wishing we went for the 5 year deal in the first place. However, if in 2 years time the SVR is below 4.99% I'll be tied into a deal for a further 3 years paying the higher rate, any thoughts ???

    • Post Points: 5
  •  Mon, Jan 21 2013, 8:29 AM

    Re: How long to fix for with a high rate

    Dont get me wrong, Halifax are far higher rates but depending on the contract that your husband works under it may well be that Halifax are the only choice you have, they are very flexible in what they do and are often an answer for me when looking for lenders but I do feel you would have more choice than just Halifax.

    So far as the fees. £499 is not that high at all. I know some brokers that would charge in excess of £999 and commission and many brokers will charge 1% - 1.5% of the loan value as a fee. Personally I don't think thats justifiable and I keep my fee reasonable (£300 plus commission standard fee) but I would have thought that for what ever you are paying the broker could do his maths and point out that a 5 year deal on the particular rates you are looking at is not cost effective against a 2 year deal....unless you were very confident that reatses were going to rise in the next 2 years which most analysts dont think will happen.

    Speak to another broker and just get their ideas on the mortgage. The good thing is that Halifax have such a light footprint with theuir credit checks that you could perform 100 in 1 day and your score would not change and the footprint disappears the following day....Halifax only use a hard footprint when the application is submitted. Off the top of my head I would suggest Virgin Money or Nationwide as very likely candidates to help you but a decent broker will do his homework and call a few lenders to find out exactly what they will accept.

    Good Luck

    • Post Points: 20
  •  Mon, Jan 21 2013, 7:41 AM

    Re: How long to fix for with a high rate

    Thank you for your valuable comments.

    I have been thinking/wondering if these are the only deals available to us. I've been led to believe that due to our circumstances that we basically have no choice but to use Halifax. We want quite a high loan ratio to earnings and as a contractor have been told that Halifax are the way to go.

    I have felt a little unsure of the broker, great to come up with the mortgage so quickly but equally for £499 I'd like a more comprehensive service. I said the rate was really high and fees hideous but was told very politely that given our situation we'd just have to accept that's the way things are.

    I've had another broker in mind, this company doesn't charge us a fee so work in a different way but are still whole of market, I will speak to them this morning and see if there are any other options available to us.

    Thanks again for your comments.

    • Post Points: 20
  •  Sun, Jan 20 2013, 9:09 PM

    Re: How long to fix for with a high rate

    The 2 things I would immediately pick up on from your post is that halifax are not the most competitive l;enders in the UK but they are one of the easiest to place with.

    With this in mind is there any specific reason why halifax was chosen as the lender because there are a good many lenders out there that would offer rates far far better than this...for example

    Coventry BS 3.75% 2 yr fixed rate, £199 booking fee, Free valuation

    Accord 4.09% 5 yr fixed, £495 arrangement fee, Free valuation

    Both these examples are considerably cheaper both on rate and fees and bnoth offer a free valuation. i would have to say that for the Accord deal you will need to use a broker but you could go direct for the Coventry deal....although i would ALWAYS advise using a broker.

    The fee you are paying your broker seems slightly excessive to me....unless he is not taking a procuration fee (commission) from the lender too but judging by the valuation fee you are looking to pay your lender i would assume its quyite a hogh priced house (300k+) so maybe its not out of the question.

    I understand that a 5 year fixed rate would be attractive to save on fees but you will pay a higher premium per month and this could be more expensive over all. Assuming you are buying a £300k house at 85% then you would have roughly £55 per month difference between the monthly repayments. over 60 months (5 years) this would equate to an additional £3300 paid. Most remortgages would offer a free valuation and legal service so you may find yourself to be out of piocket quite considerably if you took a £999 fee and £499 broker fee again......and if your broker was any good he should have pointesd this out to you in the fuirst place.....what exactly is he doing for you for his fee other than pushing you towards an expensive option and not looking at other cheaper options or even discussing your own options in depth.

    Speak to another broker and get their opinion, there are better options out there....and i only have the 2 minute review of your messsage to judge this by

    • Post Points: 20
  •  Sun, Jan 20 2013, 8:04 PM

    How long to fix for with a high rate

    Hi All,

    My first post. I'm hoping there are some mortgage minded people that can guide me with which mortgage to go with.

    The rate is high but its our circumstances so I knew this would be the case, husband is a contractor, I'm a housewife at the moment so with one wage and wanting a fair sum of money at 85% LTV the rate was never gonna be great, but thats not what I require advice on, just explaining now before you tell me how awful the rates are!

    So the option is do we fix for 2 years at 4.69% or 5 years at 4.99%? We're paying a £499 broker fee, £999 mortgage arrangement fee and £430 for the mortgage valuation. Mortgage is with Halifax.

    Despite the high rate I'm drawn to the 5 year fixed as given the almost £2k outlay we'll be looking at paying close to that in 2 years if we go for a new deal rather than go on the SVR, though that raises another question, any idea what the lenders SVR would be in 2 years time or is that just an impossible question? If we go with the 5 year deal I'm anticipating I will be back at work by the time we come to remortgage and thus will have better deals on the table available to us.

    I'd appreciate people more clued up than myself to give their thoughts.

    Many thanks
    • Post Points: 20