So I started an op on The Strokes, the must-hear band of the moment, after pinching their fantastic debut album Is This It? from my younger sister. They sound like my favourite band The Velvet Underground, and even The Dead Kennedys (saw them once, most violent gig I've ever been to, even the lead singer got clobbered by skinhead yobs.)
But I quickly scanned ciao to check if anyone had beaten me to it and they had and their ops were very useful and my enthusiasm went phut.
So here's an op on mortgage lender Nationwide instead, because who cares if everyone else has written about them. And hey, mortgages are the new rock 'n roll (okay, they're not but it's all I've got lined up).
A mortgage is the biggest investment most of us will make in our lifetimes. It's a loan, usually over 25 years, to buy a home. There are many types but the big two are investment-backed and repayment mortgages.
The former uses an investment product such as an endowment policy (a savings policy with bells and whistles) to pay off the loan after 25 years. Keep awake, this bit is nearly finished. You pay off interest
every month.
Once the height of fashion, endowments have died out due to the not unimportant fact that they are a diddle. There is no guarantee you will get back what you paid and everyone and his wife takes a nibble (nearly rhymes with diddle) out of your payments in commission.
Much better to opt for a repayment mortage which chips away at capital as well as paying off interest each month.
Nationwide offers both types of mortgage and, drum roll, is a mutual. This means it can return excess profits to members because it doesn't have shareholders to please with dividends. It does this by having a low standard APR (the rate of interest you pay after any special deals end).
You might get a better deal from another mortgage lender for a few years but over the longer term Natiownide's mortgage should work out cheaper than most.
The first track is a blinder called Is This It? and it starts like an Oasis number and then...sorry. Nationwide mortgages have the following key benefits:
*Interest repaid daily - many lenders will only let you repay interest annually. Effectively you pay interest on money you have already paid back during the year.
*No extended redemption penalties - many lenders will clobber you in the pocket if you repay a mortgage early. (It's a shady area of the law and worth arguing with your lender to try to make them back down).
*CAT standard - conforms to the government's rules on fair charges, access and terms
*Can overpay by up to £500 a month - will take years off your loan and save you thousands of pounds. Of course you need £500 a month spare, a problem.
*Can borrow up to 95 per cent of the property's value.
There are four main types of repayment mortgages available. Here's another list, but spot the deliberate mistack:
*Fixed - the APR is fixed for a number of years, usually two or five. The longer the fix the higher the APR. Useful if you think interest rates will rise. When the fix ends the APR reverts to Natiowwide's standard rate of 4.9 per cent.
*Base - the bogstandard mortgage which most borrowers will be on. Guaranteed to be no more than two per cent above the Bank of England's rate.
*Tracker - tracks the Bank of England base rate but will not go above a certain level (called a cap) for a fixed number of years. You have to pay a £150 fee to get this mortgage.
*We pay you - the lender gives you thousands of pounds taxfree and sends you on holiday. Might have misunderstood this one.
*Flexible - the weapon of choice for many borrowers in today's market. Allows you to repay early, enjoy payment holidays, overpay and take out credit at the same rate of interest as your mortgage (much lower thn a personal loan or credit card). Worth taking out if you borrow for things like school fees, holidays, etc.
Here's how We have just sold a house on the south coast and moved to the midlands with a tidy profit to use as a house deposit. We found a house (about 50 per cent cheaper than in the south) and made an offer £2,000 below the asking price, which was accepted.
Saturday - Get the Nationwide branch number out of the Yellowpages and phone for an appointment that morning.
11am - Interview with mortgage advisor who cannot talk about our specific circumstances but only on the products on offer. Fine if you know what you want.
11.02am - He asks why we chose Nationwide, how much I earn, what sort of mortgage we want, and have we any debts. Explains different mortgages and calculates how much Nationwide is willing to lend (three and ahalf times salary minus debts is the norm).
11.05am - I ask for a two year tracker mortgage because I don't think interest rates will go up quickly enough to justify a fixed rate deal.
11.30am - He runs a credit check on us. A sticky moment but the result comes back as credit worthy. Phew!
11.35am - Gives me an application form which I will return within a few days. It asks the same questions as the mortgage advisor. He says once the application form is received and approved the building society will carry out a survey (we have to pay £175 but it is refunded on completion of the sale) of the property. If that comes back okay, we will have the money in our acount within 15 days. Now that is fast.
Er...and that's it. Apart from the bigger deposit you can put down the better APR you will get. And Nationwide has just been given a slap on the wrist for not putting all its customers on the lowest APR - but it has promised to do so in future.
Oh yes, and you have to sign a declaration when you become a customer to say if Nationwide ever converts to a bank, your windfall will go to charity. Bugger.
Details on 0800 30 20 10 or www.nationwide.co.uk. Compare mortgages on www.moneysupermarket.com
How helpful would this review be to a person making a buying decision? Rating guidelines
We were told recently that Nationwide would be the cheapest one to go to from an independant advisor and it is probably likely that this is the one we will go for. This was a great review and made me understand a bit better as it was hard to grasp first time round!!! Cheers
izzybee 25.06.2004 14:54
This review was humourous without being flippant, and really got to the point without boring me, which, to be honest, most mortgage literature does! It was lively yet had all the information you could possibly want
elkiedee 04.01.2004 20:22
Amusing but informative. I envy you being told you were creditworthy immediately, it took 7 weeks for my building society to let us know we could have a mortgage. I know their rates aren't the best but I might look into them as a remortgage anyway. Luci
Mar 11th, 2002
(Apr 22nd, 2002)
exceptional by (5%):
very helpful by (95%):
