Disgruntled FTB - best mortgage deal?

K

klink

Registered User
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I see there is info out there on deals, but maybe out of date now.I need a bit of help here, as a FTB I went to a Financial Advisor and got the following advice.

I got recommended a 5 year fixed, and was quoted 5.6% for 250K loan. I have a desposit of 150K plus - terms 20 years (as I am in my 30's).

I only wanted to borrow 200K but was told to go for the bigger sum as could work myself down from here. I haven't been too happy with my FA services, no indication was given as to how much the monthly repayment would be or confirmation of the terms or anything despite having been asked directly. I was just queried, "when can we proceed?".

I am no financial expert but I am not going for the above, when rates of 5.2% are advertised everywhere. I know I can't afford to borrow 250K at 5.6%. My monthly take home is 2,300. So why does a financial expert advise me accordingly? Also my brother advised me against a 5 year fixed for a single person like me, as it means I am totally tied down.

When I asked my FA for a better deal I was told to come back when I have a definite property - i.e offer accepted. I want another loan in principal so I can budget my offer price as lenders are becoming more stringent I can't assume i will get offered anywhere near the above amount. I hear a mortgage offer in principal can leverage the vendor in your favour? I also want to set the interest rate in these precarious times, as I hear some loan offers can be fixed for a couple of months or more.

I am really put off now going to another FA. Seemed the vested interest was getting me to borrow as much as possible without giving me any indication as to what it actually meant to my pocket. I just felt he wanted me to buy a property asap regardless. As a result I am going to sort out a mortgage myself.

My questions are: Am I right, does the lender fix the interest rate for mortagage offers in prinicple? In general how long are they valid?

Can any advise, on who is offering the best 2 year fixed mortgage with reasonable terms (not 30 years) 20 preferably or 25 max?

Is a 2 year fixed the best mortgage to be going for or should I go longer? I know no one can gaze into a crystal ball re interest rates, but I can't see them coming down in the short term.

I heard about mortgages linked to your current account which can reduce your long term payments. Are these only relevant to variable/tracker mortgages or can it apply with a fixed mortgage?

Should I go to another FA - do they really have insider knowledge so to speak?

Thanks folks,

Disgruntled FTB.
 
klink said:
I got recommended a 5 year fixed, and was quoted 5.6% for 250K loan. I have a desposit of 150K plus - terms 20 years (as I am in my 30's).
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What reasons did they give for this advice?
I only wanted to borrow 200K but was told to go for the bigger sum as could work myself down from here.
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That is dumb advice in my opinion. If you don't need the extra money don't borrow it. If you do then you pay interest that you don't need to and you also have higher mortgage protection life assurance premiums.
I haven't been too happy with my FA services
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What sort of financial advisor is this?

My questions are: Am I right, does the lender fix the interest rate for mortagage offers in prinicple?
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No - they are generally subject to review between approval in principle and drawdown.
In general how long are they valid?
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A few months I think generally?
Can any advise, on who is offering the best 2 year fixed mortgage with reasonable terms (not 30 years) 20 preferably or 25 max?
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Check the rate table in the Irish Times property supplement on a Thursday or similar rate tables in other newspapers or on other websites. See here also:

Best Home Loan Deals
Is a 2 year fixed the best mortgage to be going for or should I go longer? I know no one can gaze into a crystal ball re interest rates, but I can't see them coming down in the short term.
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Check out the many existing threads on the fixed versus tracker/variable question. Don't fix unless you must.
I heard about mortgages linked to your current account which can reduce your long term payments. Are these only relevant to variable/tracker mortgages or can it apply with a fixed mortgage?
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Some or all of these charge higher rates than other packages so you need to crunch the numbers to see if they are worth it versus taking out a regular mortgage and just making accelerated regular or lump sum over payments as you can afford to (with the money in this case basically locked away unlike a current account/offset mortgage where it remains available for use).
 
You will find a couple of mortgages here. They compare % rates. Good luck www.mortgages.ie So far seems to be 2yr fixed over 20yrs €1296.82 & they update this website daily.

But I must say don't listen to that Financial Advisor. That's really bad work he's doing there & won't last in the business long if he treats customers the way he treated you.
 
It all sounds very dodgy to me - hard to believe in fact!
Lenders should normally ensure that a persons monthly repayments are no more than 40% of their "disposable" income - so for you this would be a max repayment of about 920 per month. They also are supposed to "stress test" the repayments to see if you could still afford if if the rate was ECB plus 2% (i.e 6%) This would limit the amount that you can borrow - which makes it very hard to believe that the "advisor" is suggesting you could borrow 250k at 5.6% . This would be a monthly repayment of 1550 - two thirds of your take home pay.
No proper lender would lend you that much - in fact it will be difficult on your income to even get 200K.
Maybe they have suggested the 5 year fix because up until the end of last month there was no need to "stress test " 5 year fixed rates (the rules change as of today). Even so it still seems very wrong to me. Do you have any other income, are you planning on renting out a room ?

Is this "advisor" registered with the financial regulator - [broken link removed] if he isn't run away fast. If he says he is - but you find he isn't - report him. If if he is regstered - still report him because he should be "struck off " in my opinion.

By the way - the best 2 year fixed rate on 200k on a house valued 350k would be from ICS (Mortgage Store) at 4.79% or BOI same rate.
 
Thanks for all the comments all very useful.

Just in quick response the advisor recommended the bigger loan to start with, so if I found something cheaper I could draw a smaller mortgage rather than bidding for more money at the second round. I took it he knew what he was talking about.

When I said originally I wanted to borrow as little as necessary he let agreed I was correct but added "but not from my perspective" (I took it he was refering to commission). Will check him out but think he is reputable.

I got the first offer in principal at 250K before the new stressing testing thing came in. This particular lender that I got the 250K in principal from favours public sector workers hence the amount. I dont have any other income, but I have a guaranteed pay progression which the lender was probably taking into account. And I do plan to rent a room out. I have to.

When I got the first offer I had asked for 20 years term, but to be honest I got so little feed back I really don't know if the offer was based on 20 years or more. It could have been 30 - so maybe that's why I got so much. I won't be going with it anyway. Thanks for the ICS advise - will check them out on Monday.

Cheers
 
klink said:
When I said originally I wanted to borrow as little as necessary he let agreed I was correct but added "but not from my perspective" (I took it he was refering to commission). Will check him out but think he is reputable.
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If he actually said all that you have reported him to have said here then I would run a mile, shop around for myself and maybe contact another more trustworthy broker.
 
Tell the so called "financial advisor" that you are very unhappy with his service, you dont want his advice anymore and not to contact you.

unfortunately most FA are basically SALES PEOPLE
and dont have your best interests at heart, esp on such an hugely
important long-term transaction

this FA doesnt care about stress testing your payments versus interest rate rises, getting you best rate, etc

he wants you to take biggest loan so he gets bigger commision,
and is probably working on other bonuses based on getting you on
that "expensive" 5.6% fixed!

I wouldnt trust this (any) FA with keeping my personel details confidential,
as mentioned before threaten you are going to report him to regulator.

best advice,
- read alot of the informative valuable posts on this site,
- talk to mortgage advisors in banks directly, they probably offer better
rate as avoing this "salesperson middleman",
and then play their offers against each other,
it may take more personal time but you are getting better financial advice
- keep posting in your updates here for more feedback

and be strong in saying "NO" to the sales push of independant financial advisors


JR.
 
JR Rizzo said:
unfortunately most FA are basically SALES PEOPLE

...

- talk to mortgage advisors in banks directly, they probably offer better
rate as avoing this "salesperson middleman",
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As Munsterdude said - what do you think bank tied agents are if not sales people!?!

The problem here seems to be that the intermediary in question is offering poor advice. This does not mean that all intermediaries/brokers are untrustworthy!
 
ClubMan said:
As Munsterdude said - what do you think bank tied agents are if not sales people!?!

The problem here seems to be that the intermediary in question is offering poor advice. This does not mean that all intermediaries/brokers are untrustworthy!
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Munsterdude didnt explain much, and
I am unsure what exactly "bank tied agents" refers to?

I agree there must be some reputable "intermediaries/brokers" out there,
but havent found one!

From personal experience I find dealing directly with banks is far better
than "independant brokers", banks are more flexible and responsible, and
give sensible replies to queries unlike any FA used.

Your confidential information is more secure dealing directly with banks.

No doubt bank staff get some commision out of any deals they make,
its part of the job.

You have to deal with SOMEONE when getting a mortgage,
and the attitude and approach of mortage staff in banks is far less
cut-throat and irresponsible than any FA I have met.

JR.
 
JR Rizzo said:
I am unsure what exactly "bank tied agents" refers to?
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Bank staff are implicitly tied agents aka sales people.
Your confidential information is more secure dealing directly with banks.
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How so?
You have to deal with SOMEONE when getting a mortgage,
and the attitude and approach of mortage staff in banks is far less
cut-throat and irresponsible than any FA I have met.
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Maybe you just picked the wrong intermediaries and are generalising from an unrepresentative sample?

Your posts on this matter seem to contain more vitriol and heat than sound advice and light in my opinion.
 
JR Rizzo said:
Munsterdude didnt explain much, and
I am unsure what exactly "bank tied agents" refers to?

I agree there must be some reputable "intermediaries/brokers" out there,
but havent found one!

From personal experience I find dealing directly with banks is far better
than "independant brokers", banks are more flexible and responsible, and
give sensible replies to queries unlike any FA used.

Your confidential information is more secure dealing directly with banks.

No doubt bank staff get some commision out of any deals they make,
its part of the job.

You have to deal with SOMEONE when getting a mortgage,
and the attitude and approach of mortage staff in banks is far less
cut-throat and irresponsible than any FA I have met.

JR.
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Bank staff sell the products of that Bank
Mortgage intemediarys sell the products of all the banks that they hold agencies for. You clearly have had a bad experience with a Financial Advisor - what was there Financial Regulator status? Mortgage intermediary? Tied agent?
 
Also - if you had bad experiences with intermediaries did you complain to them and, if necessary, to IFSRA and/or the [broken link removed]?
 
To be fair the advisor is probably used to people coming back after bidding above what they initially requested and begging then to get the money.
Its not a bad idea to see what the max you can borrow is but when i went they gave me this figure on a 5 year fixed but I just asked them to get me the best tracker rate and amount
 
Hi folks,

Just an update, I exagerate not on my above post as I know it sounds far fetched. I nearly doubted my own cop on at one point - being a naive FTB and all.

I got another approval in principal by going direct to Halifax for a 2 year fixed 5.2% over 30 years. However I will be going to ICS Building Soc as recommended from an earlier post as they seem to be doing a better deal. Every penny counts these days.

I hear FA's are snowed under at the moment doing switches and maybe they just don't see the likes of the cautious FTB as being a worthwhile cause. I won't deny I am being rational about finding the right property. As I am on a single income, I won't be able to upscale again - this is a decision for life. As a result I am probably the biggest pain in the rear to Estate Agents at the moment. I am finding out alot this way, in a good few cases the information brochure is scant - after all it is buyer beware.

Thanks to all. Will let you know what update from ICS is.
 
ClubMan said:
Bank staff are implicitly tied agents aka sales people.

How so?

Maybe you just picked the wrong intermediaries and are generalising from an unrepresentative sample?

Your posts on this matter seem to contain more vitriol and heat than sound advice and light in my opinion.
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I'm not saying that all bank staff are nice and honest,
but my experience is they are more reliable and sensible than any FA
I've talked to (5+) wrt mortgages, lets just say they were the lesser evil of
the two kinds of salesmen :)

I dont think Banks give out your confidential information, isnt it illegal??
(apart from credit bureau stuff)

but remember the PrimeTime rte show last year in which a mortgage
broker was in cahoots with an estate agent by illegally sharing
customer data....
it surely damages the trust your can have in these "independants"?

I didnt complain to any authorities regarding my experiences, (posting
to this site may be alot more effective ?!?!)
but fortunately didnt sign anything to compound this bad "advice".
After politely asking not to be contacted again by phone they all did leave me alone,
though I did recieve various financial offer junk mail, that banks too are
guilty of.


I think its very important to discuss the danger of dealing with
independant FA especially when it comes to mortgages, no doubt there is plenty already on this site,
and wonder how many Irish have been led astray and made (what will turn out to be) bad risky decisions influenced by these professionals.

JR.
 
JR Rizzo said:
I'm not saying that all bank staff are nice and honest,
but my experience is they are more reliable and sensible than any FA
I've talked to (5+) wrt mortgages, lets just say they were the lesser evil of
the two kinds of salesmen :)

I dont think Banks give out your confidential information, isnt it illegal??
(apart from credit bureau stuff)
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I don't think that either is exempt from the rules laid down by the Data Protection Act. As I said - maybe you had particularly bad experiences with mortgage brokers/financial advisors (which you should have complained about to them and, if necessary IFSRA/FSO) but I think it's ridiculous to generalise, tar all such intermediaries with the same brush and to suggest to people that they might be better off talking to tied agents rather than more independent multi-agency intermediaries or authorised advisors.
 
Update folks,

Got offer in principal 200K 2 years fixed 4.79% 25 years. Although was originally only offered 185K at the first interview with BOI. Just goes to show what stress testing is doing to borrowers. Big difference from the first quote via FA of 250K five year fixed at 5.6%.
 
Glad to hear you got on well.
Just goes to show - you can't be sure that someone else will get you the best deal unless you go and look for yourself. (With a bit of help from Askaboutmoney)
 
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