Mystery Shopper: Carlisle
This week the shopper visits Carlisle.
She bought a house for £140,000 on a 95 per cent loan-to-value loan in 2008 but house prices have gone down in her area recently and she is worried she is approaching negative equity. She is coming up to renew her mortgage deal and has around £42,000, or 30 per cent, of equity in the home. She earns £40,000 a year as a sales director.
IFA (Independent), Lock Fuller, Brunswick Street, Carlisle CA1
Speed of response: Four rings and receptionist than the shopper through to adviser. 5/5
Telephone manner: Professional, polite and helpful. 5/5
Relevant qualifications: CeMAP 3/5
Payment Method: Arrangement fee of £300 for market review plus commission from product providers. Fee of £99 if client does not decide to apply for mortgage after market review. 4/5
Guidance given: The adviser pointed out that the shopper was likely to get a remortgage deal from most lenders on an 80 per cent to 85 per cent LTV deal if house prices did not drop much further. He said the standard variable rate for Northern Rock was likely to be around 4.5 per cent, so it was essential to conduct a review of the market to see if other lenders could improve on that offer. The adviser told the shopper to start inquiries in advance to get administration duties out of the way before her deal expired. 4/5
Knowledge: The adviser seemed reasonably knowledgeable about the current state of the market and what the client’s position would be when the mortgage expired at the end of the year. 4/5
Email/web presence: email@example.com/ www.lockfuller.com 5/5
Verdict: The adviser was helpful, clear and gave a very good overview of the shopper’s options.
IFA (Independent), Dodd Murray, Montgomery Way, Rosehill, Carlisle CA1
Speed of response: Receptionist put the shopper through to an adviser after six rings. 4/5
Telephone manner: Extremely friendly and open. 5/5
Relevant Qualifications: Cert PFS and CeMAP. 3/5
Payment Method: Initial fee of £250 plus commission from providers. A £100 fee is charged if the client decides not to apply for a mortgage after the market review. 4/5
Guidance Given: The adviser reassured the shopper that negative equity does not represent a loss unless the shopper decides to sell. He said that after the shopper’s current deal comes to an end, she may find her current provider’s SVR rate quite appealing, but also advised her to look at the open market as there was good product availability for someone looking for 80 per cent to 85 per cent LTV. He also pointed out that the LTV could improve before the current mortgage ends this year and advised the shopper to sit tight. Pulling out early would not be worth incurring withdrawal fees. 4/5
Knowledge: The adviser was very considered in his advice, putting the shopper’s mind at rest about negative equity and thoroughly explaining what all her options were. He emphasised that her best option may well be to do nothing at all. 4/5