Mortgage advice?

Todge said:
Having gone through this last year, dont ask them how much they can give you. It'll almost certainly be more than you can afford. Work out how much you can afford to pay on a mortgage every month and work it out from there.
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Well i'm currently paying £525 for my flat which is near the top end, and considering the people i do know with mortgages and with homes inc my parents. Are a lot closer to £400.

THe main problem i guess is the deposit, i don't see how I'm ever going to get a 20K deposit never mind 5 or 10.
 
I'm going through the providing income evidence etc stage at the moment as a first time buyer. Got an excellent deal at Santander (26% deposit). It really helped that I knew my credit record inside out, 999 credit rating, never used overdraft etc and was honest to the penny about everything (I have a 0% credit card but they weren't bothered as my income and employment is good). I'm on 4x because of salary (in a certain salary band apparently to be able to access better multipliers)

About to get royally raped though on stamp duty :(

Just make sure you account for all the costs - conveyancing, upfront mortgage fees etc, and potential stress whilst you wait for outcomes and decisions. Mines was stressful because originally I was going to put 22% deposit in, kept me stressed for 24 hours whilst I waited for the underwriters to get back, then they wanted an additional 1% or so, and I just decided to go to ~26% to get access to a good deal. I even had a pro forma forecasting monthly outgoings with worst case scenarios to show them which they liked.
 
unknownsock said:
Well i'm currently paying £525 for my flat which is near the top end, and considering the people i do know with mortgages and with homes inc my parents. Are a lot closer to £400.

THe main problem i guess is the deposit, i don't see how I'm ever going to get a 20K deposit never mind 5 or 10.
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You're going to struggle then.

You won't get 100% mortgage,
It sounds as though you don't have the solictor fees (£1000~)
Shared ownership schemes are rubbish in general, think about HOmeBuy direct if it's available in your area, it's about your only option other than renting.

Mortgage wise you'll be looking at lending around 3x your combined salaries.
 
unknownsock said:
Well i'm currently paying £525 for my flat which is near the top end, and considering the people i do know with mortgages and with homes inc my parents. Are a lot closer to £400.

THe main problem i guess is the deposit, i don't see how I'm ever going to get a 20K deposit never mind 5 or 10.
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If your parents are anything like mine they have been living in the house for many years and so are paying off a much smaller mortgage than the property is now worth. My folks have a 50k mortgage because they bought it 20 odd years ago. House is now 200k plus so any new owner would need a mortgage 4x the size of the one my parents had and so costing far more.

Buying a place isn't something that can be rushed, this is even more the case since the crash because banks dont want to give money out unless you can prove you can pay it back.
 
rafster said:
I'm going through the providing income evidence etc stage at the moment as a first time buyer. Got an excellent deal at Santander (26% deposit). It really helped that I knew my credit record inside out, 999 credit rating, never used overdraft etc and was honest to the penny about everything (I have a 0% credit card but they weren't bothered as my income and employment is good).
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just FYI having a card and on overdraft doesn't harm your credit rating. I had 3 cards and an overdraft and had a 999 score from experian. i'd also had a car loan previously. The wife who had never had any kind of credit was about 550.

Having credit available doesnt hurt, not paying it back does.
 
unknownsock said:
Well i'm currently paying £525 for my flat which is near the top end, and considering the people i do know with mortgages and with homes inc my parents. Are a lot closer to £400.

THe main problem i guess is the deposit, i don't see how I'm ever going to get a 20K deposit never mind 5 or 10.
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Well I don't want to put you off, it's certainly worth going to see a professional mortgage advisor - just because 100% mortgages weren't available last month doesn't mean that they aren't available this month. However if you're struggling to save for any sort deposit I wonder if you've factored other costs associated with buying a house. There'll almost certainly be a mortgage arrangement fee - expect between £1-2k, you might be able to add that cost onto the mortgage but don't assume so. Some costs you won't be able to add to the mortgage though - solicitor's fees, mortgage administration fees, land registry searches, a few hundred quid here, a few hundred quid there - I assume you won't have to pay stamp duty but make sure you know that you don't.

One other thing, if you do get a 100% mortgage you'll need to ask yourself what happens if you go into negative equity? You might not be able to get another mortgage so you need to check what happens after any introductory offer on the mortgage you get expires.
 
Well we'd love to move out this year but by no means want to rush, and considering we've only been thinking about this for a week, obviously i won't have tried to save any sort of deposit yet.
My assumption was to try and get as much stuff on the mortgage as possible, as long as i got a similiar sized place in a reasonable area, my bills should drop abit, obviously i could put the spare in a savings account though.

We just get the feeling I'm putting £500 a month into nothing when i could get on the ladder.

And i do agree shared ownership deals ain't great but if it gets me on the market, it works right?
The savings i get from comparing rent to my mortgage would be used to help pay off them off.
 
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unknownsock said:
Well i'm currently paying £525 for my flat which is near the top end, and considering the people i do know with mortgages and with homes inc my parents. Are a lot closer to £400.

THe main problem i guess is the deposit, i don't see how I'm ever going to get a 20K deposit never mind 5 or 10.
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£400 will get you about £60-65k
 
I also got similar with a 70k house and a 5k deposit so you may get away with a small deposit, the low deposit offers were from LloydsTSB

how much are you looking to borrow ?
 
Dr House said:
Thats not bad, what is the early payment fee?

I have not even seen 10 years fixed in the uk before.


Who is that with?
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You can repay up to 10% of the outstanding balance each year before they charge you. After that there's a sliding scale.

It's with Britannia.
 
vonhelmet said:
You can repay up to 10% of the outstanding balance each year before they charge you. After that there's a sliding scale.

It's with Britannia.
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I think he means whats the fee if you stop the mortgage before the fixed term is up. Could be wrong though :)
 
Ev0 said:
I think he means whats the fee if you stop the mortgage before the fixed term is up. Could be wrong though :)
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Not sure without trawling through the paperwork. I think it's just treated as a massive early repayment, so you'd pay like 10-20% of the balance you repay or something.

I'll have a dig...
 
I listened to various schools of thought

Borrow as much as you can, stretch yourself to the limit, you'll always pay your mortgage and won't regret it later.

Borrow as little as you can and pay off as much as you can, as early as you can.

If you think how you Dad tells you he paid £8000 for his house 40 years ago why bother with a repayment, in 40 years you will need to find the same as a second hand Fiesta

House prices double every 10 years

Talk to an IFA, take advice and make your own mind up :)
 
you don't need to talk to an IFA, you need to think for yourself and do your own sums and research.

an IFA will be desperate to sell you a product, he won't have your long term best interests at heart.

Remember that even if house prices do double in ten years, that is not guaranteed and the market has been very cyclic. We are probably at a peak at the moment.
If you end up in negative equity you won't be able to re-mortgage and you won't be able to move.

Anyway I have a feeling you won't be buying anything any time soon.
 
The Mad Rapper said:
Mortgage rates suck. We have a Tracker that's 0.15% above base. Won't be getting rid of it any time soon either.
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that's a good one, have you stuck all the mortgage money in an ISA or Bond.

I'm on 0.75 above base.

Oh and 24 years later my mortgage seems just as large an amount of cash now as it did when I took it out.

more like the price of 3 series.
 
How does it actually work? If I got £100k mortgage and give them £10k deposit, do they then give me the £100k to buy a house with and the £10k pays off a large part of the projected interest, or do I have £110k to buy the house with and the £10k is just their buffer if I mess up and have to sell the house quickly?
 
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