Making our own mortgage decisions

mortgage

We decided to go through a broker when we got the mortgage on this house four years ago.  I don’t know if it was the best option but its what my husband did at the time.  I think we thought it would be easier because we were both self-employed, which made things slightly more complicated initially.

Since then I have had a few doubts.  Why go through a middleman when you can go direct to a bank or building society yourself? You’re only lining the brokers pockets after all.  They don’t find you the “best deal” out of the goodness of their hearts.  Plus, it never really simplified the process as we still had to do lots of paperwork.

I felt when we came to renew our mortgage and get a better deal that the broker didn’t necessarily have our best interests at heart.  This time around we went direct with the company instead and I felt happier.  The broker was pushing us towards another company even though they wanted us to fill out a lot of paperwork and have the house re-valued when we didn’t want the hassle.  Plus, the person who then came to value our house wasn’t very positive because its work in progress!  I guess we have had our own doubts in the past so we can’t blame him, but it’s still hard to hear negativity when you have spent so much already.

renovation

Also there wasn’t even really any benefit for us switching, so the broker must have had their own agenda!  Eventually we put our foot down this time and made up our own minds.  Yes, there are times using a broker can be a good move, they have access to tempting wholesale rates that won’t be available to you normally.  But tread carefully, see how the prices compare before jumping in to anything.

Apparently one in five mortgage-holders have an interest only mortgage.  This is a bad idea if you haven’t made plans for how you will pay off the mortgage at the end of term.  Personally, I will always find the money for my mortgage, so it makes sense for us to have a repayment one.  The extra money I would have if we were only paying interest would just be flittered away.  In the long run I would prefer to know the capital is getting paid too.

What to do if your unhappy with your broker?

I hadn’t realised if you are unhappy with the experience you had with your broker you used you can look into mortgage claims.  If you were mis-sold you could be entitled to compensation for the hardship you might face.  I think if a broker has ill-advised you then its good that they can be held accountable.  Some people turn to brokers because they have bad credit ratings, this wasn’t the case with us.  I think we should have done our own research from the very beginning.  We are capable individuals and having the Internet makes researching deals a lot easier!

First time round we ended up with a 30-year mortgage which I wasn’t overly happy about.  The average period of repayment is 25 years and that felt more reasonable.  Let’s be honest we aren’t spring chickens any more and I would like the house to be paid off a bit quicker than that.  A mortgage might have been mis-sold if you can’t afford it.  That applies for the length of the mortgage not just when you first take it out.  How will you make payments after retirement if you have a longer-term mortgage?  I guess I better start making overpayments to bring down the term.

If you are in the progress of buying a house, good luck!  It can be a tricky business but its well worth it in the end.

 

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