Independent finacial advise?

[Brian M. Leahy]

When I bought our first house most people trusted Bank Managers, Building Societies and Estate Agents. That was forty years age and things have changed primarily because of the way they have been exposed.
I now have a very jaundiced view of the financial "services" industry.
The situation is that my father in law had recently died and my wife and I would like to facilitate the purchase of his house by our younger son from my father in laws estate. In order to be fair on our other three children our younger son will have to raise a mortgage to enable him to give the other children their share of the house.
Our younger son is a paramedic who is so highly valued by society that he can not afford a house in this part of the world and this will be his only opportunity to get onto the hosing ladder but as he is currently enjoying living with a group of friends in an old farm house he is toying with the idea of buying the house to let until he is ready to settle down so he went to his bank and met a "mortgage advisor" who spoke to him about a "standard variable Rate mortgage" and woe and behold the first thing that I read in last Saturdays "Guardian" was some rather cryptic comments on this device.
I feel that the best way to proceed would be to obtain some truly independent financial advise.
If I was buying a property one of the things that I would do would be to employ a surveyor to look at it and I would have no problems in accepting their objectivity but I do not feel as objective about "Independent financial advisors".
The question is. "Is there such a thing as a truly independent financial advisor and if so where does one find one?
Brian M. Leahy

[rmurray]

This best folks to talk to are originators working directly for large mortgage companies..such as Well Fargo Mortgage...Chase Mortgage..GMAC Mortgage..the list goes on and on..just remember the word mortgage here..not a loan officer at the bank..

Yes these folks are on commission..But the large companies have guidelines that prohibit large abuses of the finacial process...The mortgage company has direct contol of the originator and does not want future collection problems from unhappy consumers..

The only varible rate your son should at all consider is one with a fixed payment for at least 7 years..Many varibles adjust rates as often as every 6 months..this could be disatrous for a public servent with no hope of huge salary increases in the near future..Rates are low now...they will only go up in the future..so any varible rate will increase the payment at the first adjustment..and most likely every year there after..If the mortgage advisor was talking to him about a short term (less than 5 years fised) varible rate loan...I would never go back to him/her..

There are scores of different varible rates...I am not sure what the term "standard" means..

[Jason Sardi]

I would also be cautious of a few things. Number 1, if your son is shopping for a mortgage it would be advisable to do research and talk to a few different companies before giving out his information. Select 2 or at the most 3 companies that he feels good about, over shopping can lead to credit being pulled and the score may drop if there are too many inquiries. Be very careful of 'no point' mortgages as they are making their money somehow and will probably charge a higher rate to supplement themselves. That, in the long run, can cost you thousands. A variable rate is usually valuable only if credit needs to be rebuilt to qualify for the best rates or if you plan on living in the house a few years. Also, stay away from balloon mortgages(have to pay the balance in full or refinance after a given time) and prepayment penalties. Get a good faith estimate from all the companies which itemizes the closing costs. And remember, if it is too good to be true, they're probably lying to get your business. I hope this helps and if you have any other questions feel free to email me.


Regards,

Jason Sardi
[email protected]

[rmurray]

One small note...The credit scoring system recognizes that shopping for a mortgage can save the consumer thousands of dollars...The FICO system counts mortgage inquiries from mutiple sources..with in a 30 day time frame..as only 1 inquiry...Folks should feel free to shop as many mortgage sources they can..

By the way..this goes for auto loans as well..except the time frame is only 1 week..