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MysticMaiden2000 | Help for mortgage, independent financial advisor and putting in an offer on a house.? |
I went to 3 banks for mortgage quotes, halifax, hsbc and alliance & leicester. Halifax could borrow me the most money, then hsbc, and then alliance & leicester.
I then looked around for some houses and the estate agent that i booked some viewings with had an independent financial advisor (IFA) working there.
He told me he could get me a better mortgage by carrying out a gifted deposit where no money would change hands, it is just a transfer of money and then i would avoid paying a higher lending charge and the monthly payments would be lower. He said he wouldnt charge me as a first time buyer, he just gets paid a fee by the bank (eg halifax).
Ive also seen a house i love, it is on the market for £110,000 but the couple are desperate to move out by september and received an offer for £95,000 a few months ago, considered it but declined.
So what i want to know is what would be a good offer, is an IFA better than a bank to arrange a mortgage and how does the gifted deposit work?
Additional Details
i got my offer accepted for 101grand, there was another offer at 100 but they accepted mine!
will see IFA sat morning and will not get information but not make a decision til im certain.
A few people i know recommend an IFA. |
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Miss Know It All
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It is a common practice an you should go with the lower interest and the less money down...kr
Good Luck! |
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beverley.newman1@btinternet.com
 |
There are good and bad financial advisors so I personally avoid the estate agents own.I reccomend you go for an offer of £100,000 If this is what you can afford and be prepared to go higher if neccesary.I would suggest you go for an interest only mortgage with a cheap life insurance policy to cover it,this will give you the cheapest repayments monthly and in these days of moving around for work,bigger property etc there is no need to take on a very expensive and crippling re payment mortgage.Over the years by buying and selling wisely you can end up mortgage free( I did it in 12 years doing this)Good luck and go back to your bank and try other mortgage providers as this gifted deposit idea sounds expensive in the long term. |
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achrimsdale
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Avoid IFAs like the plague all they can see is their commission
Do you understand what a "gifted deposit" is? Then avoid it.
To compare, you assume interest rates stay the same and assume the mortgage will run to the end of the term.Now what in total will each one have cost you?
The cheapest figure is the one you go for.
. |
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achievablemortgages
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Usually, the gifted deposit is a pledge of securities, (liquid assets) as the deposit against the house in lieu of the down payment. The Financial Advisor moves the money into a pledge account where the money will sit and can still gain interest. Many times you don't even need to change the existing securities you have. You just change the umbrella (company) with which those accounts are held with.
There are pros and cons to doing this. The pros are that those funds are still liquid and can be traded, as long as they do not fall under the original pledged amount. Remember though, even though you are not placing money down on the home, you are still pledging securities against it, so if the pledge amount falls below the original pledge amount, you will need to replace that amount.
Therefore, the con is that, if you or someone else is pledging the money, it is not really liquid anymore. While, you can still gain interest on the money, you can't take it out of the bank, unless you are placing it back into the house with which you were avoiding the down payment to begin with. I would only advise doing this if the funds are your own, or if a relative doesn't mind tying up that kind of money on your behalf.
The pledge account is a great way for a Financial Advisor to gain access to a small amount of your portfolio to build their book of business hoping to gain more business from you later. I'm not saying it's a bad deal. I'm just saying that it is not exactly getting you into the property with no money down either. It depends on how whomever is making the pledge feels about the stock market right now.
Good luck, and happy hunting. |
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madgooner
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The transaction described sounds like fraud.
Ditch the IFA, and get another one.
For a mortgage you may as well use one since the lender, not you, will pay them. Bizarrely this makes no difference to what you pay. |
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Ollie
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Hi,stick to the bank.Do not trust anyone offering a deal that looks too good.We fell into the trap of taking out an endowment thanks to advice.All they are after is making money.Offer on the house what you can afford you have fallen in love with the house thats what I did so we offered a bit more.That was 15 years ago & I am still in love with my home.I think the days of being morgage free in 12 years are gone unless you do up run down properties.Good Luck hope you get your home.offer £100,000 to £105,000.Hi,Glad you have got the house for £101,000 Please be very carefull abou the IFA I know 100% I would stick with the bank.It is up to you Goodluck in what you decide to & Congratulations you will soon be in your dream home. |
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scottie
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Gifted deposit is not fraud. Its used all the time, effectively you are using the equity in the property as leverage to gain better interest rate.
Value= £100k
Purchase £90k
10k equity = 10%deposit
You just don't use any of your own money as a deposit.
http://www.thethinktankgroup.co.uk/Gifted-Deposits/Gifted-Deposits.htm
If you are unsure go to another approved advisor |
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David
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Its important that your mortgage advisor is regulated by the Financial Services Authority (FSA) - if not walk away.
Your advisor should clearly explain and provide in writing the details of the deal and lender - if not walk away.
Not all IFA's are dodgy but they must be transparent in their advice. Look for IFA's that deal with the 'whole of the market', ie every lender is available to them.
Very often, IFA's will get paid by the lender so there is no extra charge to you.
Try http://www.tickeverybox.com/financial-services
Leave a number and receive a callback from an advisor to discuss your requirements. |
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