Reply to: Mortgages: To fix or not to fix?

[d000hg]

Actually, when it comes to mortgages, IFAs can choose whether to charge a broker fee or not. Some brokers don't charge a broker fee and just rely on the commission (known as the procuration fee) they get back from lenders. Those that do typically charge a broker fee, normally charge a fee if they've secured their client a mortgage offer.

Thanks - I'd mis-understood that this didn't apply to mortgages, I thought it was a blanket rule.

[Freelancer Financials]

Also, I gather the rules with IFAs changed so they cannot offer their services for free, and work on commission?

At what point would you actually have to pay them - only if they apply for a mortgage on your behalf? I don't want to go running to several IFAs and find they all bill me for their time

Any IFAs here, feel free to PM me touting your contractor mortgage services, as I need to get one sorted out in the next month.

Actually, when it comes to mortgages, IFAs can choose whether to charge a broker fee or not. Some brokers don't charge a broker fee and just rely on the commission (known as the procuration fee) they get back from lenders. Those that do typically charge a broker fee, normally charge a fee if they've secured their client a mortgage offer.

Many of the contractor mortgage specialists on this forum (including ourselves) will be happy to give advice and quotes without charging an upfront fee. So feel happy to shop around. Fees typically range from £0 to £699.

[ChimpMaster]

I have to say it certainly looks attractive. There isn't much scope to go lower but god knows how high it could end up.

It's very tempting to re-mortgage so as to invest elsewhere.

[northernladuk]

With a ten year fix availble for under 3% at the moment, I think you'd be mad not to consider it if you are remortgaging any time soon.

I have to say it certainly looks attractive. There isn't much scope to go lower but god knows how high it could end up.

[OrangeSquash]

With a ten year fix availble for under 3% at the moment, I think you'd be mad not to consider it if you are remortgaging any time soon.

[ChimpMaster]

If you don't think rates will go up, then why pay a premium to fix? All you are doing with a fixed-price mortgage is paying insurance against rate rises which the banks have obviously factored in, so that they still (normally) end up ahead of the deal.

Why not take a super-cheap variable rate and overpay like hell

This is my thinking too. I can't see rates shooting up, especially with the Oil game likely to play out over a few years yet. When rates do move up, they will likely be in 0.10% increments rather than the 0.25% we are used to seeing.

Heck, it's even possible to get a 10 year fixed residential mortgage now, at quite reasonable rates - so if you want security then that's the way to go.

[ChimpMaster]

Depends on your level of risk.

I've just remortgaged a property and doing another. The first I went with variable at 1.79%. The second I may fix but as the variable rates are below saving rates any hike in interest would be offset by a hike in savings.

1.79%, that would be a residential mortgage rather than a BTL mortgage, I presume. Or are you committing mortgage fraud?

[filthy1980]

I'm not surprised. Try to plan for the future using a 20 year old model is fundamentally flawed.

i did also tell him to buy gold at around about the same time (which he did)

so i think we're even ish

[northernladuk]

bought our house Nov 2007, saw a crash coming so fixed for 5 years thinking rates would rocket to 15%+ like they did in the 80's

advised mate to do the same, he's been cursing me ever since

I'm not surprised. Try to plan for the future using a 20 year old model is fundamentally flawed.

[filthy1980]

bought our house Nov 2007, saw a crash coming so fixed for 5 years thinking rates would rocket to 15%+ like they did in the 80's

advised mate to do the same, he's been cursing me ever since

[MicrosoftBob]

Just looked up the value of someone living in our village, they're house value is bonkers for the locality, it's not even that big compared to neighbouring properties...add electronic security gates and a fading rock star and pop the house value rockets

[Willapp]

When we sold our house at the beginning of last year, we "claimed" our property on Zoopla and updated the details which then triggered it to amend the valuation and it boosted it considerably. Think it also may have helped us secure the above-asking-price offer we accepted, as the buyer may have checked Zoopla to see what valuation they gave it and their offer was pretty much exactly the same.

Not saying it works for everyone, but it's worth claiming your property on Zoopla (can't remember how we did it, but it wasn't hard and I don't think they even did any checks to prove that it's your property).

Currently on a 2yr fixed but wish we hadn't to be honest as I think we could get a better deal now on a variable rate, and we're limited how much we can overpay on fixed. I agree that at the moment rates aren't going anywhere so why pay a premium for a fixed? Even for the risk-averse I would never fix for more than 2 years as it's so hard to predict that far ahead, and the longer you fix the higher premium you pay for that "peace of mind".

[Lightwave]

I'm wary of offset - and it requires your warchest to be outside the company already - because I'm sure I ready lenders have the right to tell you when you can or can't take back the offset cash - e.g. if you lose any income and want to take money back out, that's the time they least want to let you!

All the cash we have outside the company is in ISAs - I'm not sure if losing those ISA contributions to offset a mortgage makes sense?

Offset means it's in a separate account, like 'everyday savings' or current account.
So you can just take it, no questions asked.
Sounds like you are confusing with a 'flexible' mortgage, where you can re-draw any excess amount you have paid off the balance?
(mine is a flexible offset tracker, but I think they are extinct now?).

[d000hg]

I'm wary of offset - and it requires your warchest to be outside the company already - because I'm sure I ready lenders have the right to tell you when you can or can't take back the offset cash - e.g. if you lose any income and want to take money back out, that's the time they least want to let you!

All the cash we have outside the company is in ISAs - I'm not sure if losing those ISA contributions to offset a mortgage makes sense?

[Lightwave]

If you don't think rates will go up, then why pay a premium to fix? All you are doing with a fixed-price mortgage is paying insurance against rate rises which the banks have obviously factored in, so that they still (normally) end up ahead of the deal.

Why not take a super-cheap variable rate and overpay like hell

Indeed.
Although I'd prefer to offset than overpay, it's my war chest.

Personally I think there is a significant chance that rates will go up significantly within the next 3 to 5 years. Each of us will have a different level of needing to consider that....