We are currently in the process of entering our second fixed mortgage deal on our first home. With our first mortgage we just went with our main bank. This was because Ben already had a mortgage on his property with them and so it meant we had to port his mortgage over to our new property, or something like that. Believe me, I’m no expert with all the terminology! Anyway, so we ended up with a much larger mortgage, split into two parts, for both of us on our new home which we bought 4.5 years ago. We chose a 5 year fixed deal which actually doesn’t run out until the end of next July.
The big but…
Our fixed deal for five years was at 4% whereas mortgage rates now are amazing – under 2%!
With Brexit looming and interest rates amazingly low I reckon they will only start to creep up. If we waited until next July I think we could have potentially missed out on these incredible interest rates that are under 2%.
So I filled out an online calculator to see if my thinking was right and discovered that so long as we could find a mortgage deal with interest under 2.4% with a product fee of no more than £1000 then it made more sense for us to switch now. We could even potentially save some money!
I wasn’t so fixated on the saving money part, though that’s nice too, but more the locking in an interest of under 2% for the next five years and having much lower mortgage payments if we need to.
We currently overpay, but it’s nice to have the option of a lower mortgage payment if we need it, especially as I’m self-employed. Plus the lower the payment, the more we can overpay.
I did write a blog post recently debating whether I would move house or extend and I was struggling to make up my mind. We decided against both as we didn’t want to max out by moving and we also didn’t want to spend so much on an extension to provide one room. With the quote for the extension and cost of a new kitchen which is what it was for, we’d have been looking at 50 grand, which is way too much. So we decided to stay put for the next five years at least whilst the kids get settled into school and just do some smaller home improvements in the meantime.
So that got me looking into current mortgage rates and realising that we were paying way too much with our 4% mortgage.
As I wasn’t 100% sure what I was reading online was correct I decided to use a mortgage adviser. We have used them now and paid for them and it’s going through and everything will be great la-de-da, but I have decided I will do the whole process on my own next time without a mortgage adviser.
Perhaps we just used a bad adviser, or maybe they are for really clueless people. I don’t know. But here’s why I won’t be using a mortgage adviser again.
It’s taking ages
It is taking so long. I started the process in August and we are now ten weeks in! It’s only to re-mortgage. We're not buying or selling this time, so there should be a lot less paperwork! It's taking longer than when we actually bought and sold a house!
I never get a response
I’m pretty sure this is why it’s taking so long. Lots of my messages aren’t responded to for a week or so at a time. So I think they are being very slow to communicate with the legal team and providers. I like people to be organised and on it!
I had to advise them
OK, not totally, but two weeks after receiving the legal documentation and login details to track and complete everything online (which he said he’d take care of, we didn’t need to do anything, hence why we are paying for his service), I decided to login to see how things were progressing.
Nothing had progressed.
I clicked on the first part and couldn’t even confirm my name as I’m married now, but my maiden name is on the house deeds.
I messaged the adviser to let him know and for him to collect our marriage certificate to send to them. He hadn't even realised he needed to do this. I said it's the first section that comes up on the legal website! Had he not even looked yet?!
I could have just done all this my blooming self and I would have done it right away when we got the login details. Perhaps we’d have our new mortgage by now!
Even today, around 4 weeks after getting the login details for the legal site, when I log in I can see my name still needs confirming, so I’ve messaged him to ask if the certificate has been sent. Three days later I’m still waiting for a reply…
It cost £300 out of our own pocket
We paid £300 out of our own pocket for his services. I’ve since learnt that another friend uses a broker who only takes the bank’s commission and doesn’t charge a penny to the customer. I’ve also learnt another friend just did the whole re-mortgage process himself without a problem. I wish I had just done this.
We didn’t get any advice
The reason I got a mortgage adviser was because I was unsure what I was reading was correct. Leaving our fixed term early did mean a penalty, but I was sure it was worth it with the reduced interest rate locked in for five years. I was right, or rather the online calculator was right, and the adviser simply confirmed it. I’m not sure that was worth £300 and I should have just trusted the online calculations.
As far as advising us on a mortgage, I told him what our plan was and the mortgages I had seen and he agreed. He said he liked our case as it was easy as I knew exactly what I wanted and he agreed. So we didn’t really need any advice.
I thought brokers and advisers had access to secret rates that we didn’t and that perhaps was the main benefit, along with if you need a lot of advice or it’s your first time or whatever, but his rates were the same as we had been finding online and to be fair I had only checked a couple of comparison sites so hadn’t even dug around for better interest rates.
So overall I feel like we wasted £300 for a service we didn’t really need. I also assumed we needed them to do all the legal stuff and a valuation, but the providers actually arrange all this themselves and most do it for free as they want your custom. They accepted my valuation anyway, so no one was sent out. The legal stuff is all online and I could have easily completed this myself.
Having the adviser has just added a third party into the equation and made it take twice as long as we wait for him to collect documents from us or bring things to us to sign.
Since starting the process we’ve made three of our old mortgage payments already and I really hope we won’t be making a fourth. Fingers crossed for the new mortgage to be in place ASAP. Next time I’m going to have a go at doing it myself and save a few hundred pounds!