Useful

**The_Snail** · 21-11-2011, 13:32

Have you been in touch with MDN? He's clued up on all this mullarky.

**eodmatt** · 21-11-2011, 13:34

The low interest deal looks very good to me. Is the organisation offering it authorised and regulated by the Financial Services Authority?

http://www.fsa.gov.uk/register/home.do

If not, be wary. Also think about what will happen in over 2 years time and what the interest rates may be then.

And, is the rate you were quoted the flat rate, or the rate over the bank (of England) interest rate. If the latter, you could find yourself paying a lot more in 3 years time when interest rates start moving again.

How about early repayment penalties? Something to watch for! Example, if interest rates did go up and you wanted out, the penalties may be stiff.

Hope this is helpful.

**Ravers** · 21-11-2011, 13:36

Originally Posted by stacker1

Check the small print, the fees can include (and are not limited to) the arrangement fee which you have already said is 500 notes to the arrangement, completion and exit fee, some also charge for a valuation. And missed payments can be drastically charged (some banks offer a payment holiday)
A lot of people make the mistake of going for the cheaper percentage rate but pay a massive amount of fees (This normally only works out cheaper if you are borrowing a lot)
Natwest are offering a 3.25% (With restictions) on a LTV of 70% but no product fee.
You need to work out if paying 2.45 + fees is cheaper than paying 3.25 with no (or little) fees.

Okey dokey, it's making a bit more sense now, I'll see what hidden fees they have and base the decision on that. My head is still telling me to go with one of the big four, at least if I have any snags with anything, I can walk down the highstreet and have a chat with a real person.

Hmmmm next decision, what to spend the money on?

Anyone on here selling a jet ski?

**stacker1** · 21-11-2011, 13:44

Originally Posted by Ravers

Okey dokey, it's making a bit more sense now, I'll see what hidden fees they have and base the decision on that. My head is still telling me to go with one of the big four, at least if I have any snags with anything, I can walk down the highstreet and have a chat with a real person.

Correct, to give you a very basic example using very basic figures.
If you borrow 100k at 2.5% over two years interest only and pay 3k total fees, you will pay 8k in total.
If you borrow 100k at 3.5% over two years interest only and pay 500 quid in total fees you will pay 7.5k in total.

So even though the second example has an interest rate that is 1% more its still cheaper.

There is nothing wrong with going with someone other than the high street names, you just need to realise what the true costs are.
There is loan company (who's name I cant remember) on the net offering loans better than the big four (Up to 15k only).

**paleblue_1** · 21-11-2011, 14:11

Ravers,

Best solid advise I can offer is get in touch with a couple of LOCAL IFA's, find them from different firms, and get them round to yours for a chat. They quite often are affiliated to different mortgage lenders and you will get a better understanding of what is on offer, fees, exit fees etc.

I would not trust an over the phone quote until you have seen all paperwork, checked the small print etc. An IFA will do their best to get what you need.

Good luck and let us know how you get on.

PB

**Ravers** · 21-11-2011, 14:14

Cheers for the advice everyone, looks like I'm going to speak to an IFA, there are some other issues and a couple of other properties that are part of the bigger picture, that also need to be taken into account.

**samm1551** · 21-11-2011, 15:11

Ravers,

I am a qualled mortgage advisor and have some friends that are good IFA's if your in their area I can give youa recommendation if your stuck. Just drop me a PM

Me x

**Daxx** · 21-11-2011, 15:24

An observation if I may as I have just negotiated a mortgage on my (hopefully) soon to be new house. If you borrow cash against the equity on your house, whatever you are buying (shinies) you are paying for at the mortgage rate over the period negotiated. It may be cheaper to take out a short term loan for the shiny things and focus on getting a smaller mortgage.

Additionally, the income from the tenant will be subject to tax (via self assessment) and if you are in the higher tax bracket, that's 40%.