Mortgage advice?
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It's the people on there talking about buying shotguns and lots of beans, so that they can live in the woods and escape the civil unrest that I find funny
It's the people on there talking about buying shotguns and lots of beans, so that they can live in the woods and escape the civil unrest that I find funny
Are you saying that i don't need this delivery of 3000 assorted tinned food?
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![A[L]C](/styles/overclockers/avatars/7.png){kind=avatar}
With regards to shared ownership, you cant get a 100% mortgage. The best around is 95%, although I believe there are only around half a dozen mortgage providers who deal with shared ownership. Of those only 1 will touch anyone with any kind of black mark on their credit rating and their rate is over 10%
Very sweeping statements!
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In the main he's right. What's your point?
My point is that it was a very sweeping statement and not a statement of fact. Everyone in my family has had a payrise every year for the past 3 years.
No. Not at all. Please point the barrel away from my face
OK, but i'm keeping it loaded just in case
+1
The horrible times of death and destruction that we were all told were going to happen 2 years ago really havn't born through for me and my family/friends.
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I don't understand the thinking behind Fixed Rate mortgages in this market...
A 25% deposit ought to bag a portable term tracker with no ERC @ 2.65%. That's 2.15% above base rate, and 2.84% below a 5.49% fix.
Taking a fixed rate is effectively betting that for the duration of the mortgage, a greater period of time will elapse where rates are higher than the fixed rate than the period where they are lower. For every month that you'd pay 2.65%, you could pay another month at 8.33% (meaning the base rate would have to risen to 6.18%!) and be no worse off than fixing at 5.49%.
If base rates rise materially above that sort of level, respossessions would surely rise sharply due to number of people that cannot afford to service their debt? Essentially, while you are correct in your assertion that if the base rate hit 15% you'll still be paying 5.49%, but in that event house prices would surely drop massively and you'd be facing negative equity? Essentially, ~1990 rates = ~1990 house prices.
Faced with that sort of situation personnally, I'd want to be able to get out and bugger off somewhere that wasn't so apocalyptically screwed, and I wouldn't want to be faced with a large ERC to do so.
If predictable outgoings are important (we all need to sleep at night), then pay the currently 2.84% difference into savings (more liquid than simply chipping away at the equity) and use the cash as a subsidy when rates do go above 5.49%. That little safety net could well come in handy when/if recession/austerity bites.
If the 'credit crunch' has taught us anything, imo it should be that liquidity is key.
To that end, in this market the OP would be taking a big risk buying with a 100% LTV. Find a landlord that isn't so twitchy and start saving.
A 25% deposit ought to bag a portable term tracker with no ERC @ 2.65%. That's 2.15% above base rate, and 2.84% below a 5.49% fix.
Taking a fixed rate is effectively betting that for the duration of the mortgage, a greater period of time will elapse where rates are higher than the fixed rate than the period where they are lower. For every month that you'd pay 2.65%, you could pay another month at 8.33% (meaning the base rate would have to risen to 6.18%!) and be no worse off than fixing at 5.49%.
If base rates rise materially above that sort of level, respossessions would surely rise sharply due to number of people that cannot afford to service their debt? Essentially, while you are correct in your assertion that if the base rate hit 15% you'll still be paying 5.49%, but in that event house prices would surely drop massively and you'd be facing negative equity? Essentially, ~1990 rates = ~1990 house prices.
Faced with that sort of situation personnally, I'd want to be able to get out and bugger off somewhere that wasn't so apocalyptically screwed, and I wouldn't want to be faced with a large ERC to do so.
If predictable outgoings are important (we all need to sleep at night), then pay the currently 2.84% difference into savings (more liquid than simply chipping away at the equity) and use the cash as a subsidy when rates do go above 5.49%. That little safety net could well come in handy when/if recession/austerity bites.
If the 'credit crunch' has taught us anything, imo it should be that liquidity is key.
To that end, in this market the OP would be taking a big risk buying with a 100% LTV. Find a landlord that isn't so twitchy and start saving.
As has been said, go whole of market. Look at Charcol for quick quotes and guides to how much you might be able to borrow.
Also, consider a year or two at interest only just to help you adjust to the new spending amounts. Regardless of people saying this is bad advice, it isn't as long as property values increase, which, given history, they will. It works, for a hell of a lot of people. A GP friend of mine pays interest only on his house in Sandbanks and has done since he moved there. It gives him and his family an enjoyable lifestyle and once the kids move out he will move, the value of his house will pay off his outstanding mortgage and he'll be able to easily buy something smaller.
But, this is an extreme example (albeit common), a year or so on interest only is a much more favourbale option. Remember, this won't be your last mortgage, you'll move, bigger mortgage, etc, so a year or 2 IO now will not hurt one bit.
If you can afford capital repayment, then great. Also consider paying slightly more if you can. Say your mortgage is £675 a month, then you should consider paying £700 a month (£25 overpayment). This can help reduce a mortgage term by up to 7 years +
Lastly, insurance. Make sure you budget for Life Insurance, home insurance, building insurance, and some form of protection policy if you are injured or unable to work. Don't take the quotes from mortgage brokers, looks these offers up yourself.
Case in point: My home insurance was billed through my broker via AXA. They quoted me £120 a year for £15k cover, no accidental, and pretty much no other frills. I went to AXA directly and for £112 a year got £60k cover, personal liability, accidental damage, annual travel insurance and some other bits too.
My life cover, 30yo Male, non smoker non drinker. £12 a month. From my mortgage broker.....£47 a month.
Do your research and crack out the notepads.
Good luck
Also, consider a year or two at interest only just to help you adjust to the new spending amounts. Regardless of people saying this is bad advice, it isn't as long as property values increase, which, given history, they will. It works, for a hell of a lot of people. A GP friend of mine pays interest only on his house in Sandbanks and has done since he moved there. It gives him and his family an enjoyable lifestyle and once the kids move out he will move, the value of his house will pay off his outstanding mortgage and he'll be able to easily buy something smaller.
But, this is an extreme example (albeit common), a year or so on interest only is a much more favourbale option. Remember, this won't be your last mortgage, you'll move, bigger mortgage, etc, so a year or 2 IO now will not hurt one bit.
If you can afford capital repayment, then great. Also consider paying slightly more if you can. Say your mortgage is £675 a month, then you should consider paying £700 a month (£25 overpayment). This can help reduce a mortgage term by up to 7 years +
Lastly, insurance. Make sure you budget for Life Insurance, home insurance, building insurance, and some form of protection policy if you are injured or unable to work. Don't take the quotes from mortgage brokers, looks these offers up yourself.
Case in point: My home insurance was billed through my broker via AXA. They quoted me £120 a year for £15k cover, no accidental, and pretty much no other frills. I went to AXA directly and for £112 a year got £60k cover, personal liability, accidental damage, annual travel insurance and some other bits too.
My life cover, 30yo Male, non smoker non drinker. £12 a month. From my mortgage broker.....£47 a month.
Do your research and crack out the notepads.
Good luck
absolutely agree
sorry I haven't got time to cover every single case individually.
There are people getting pay rises but for the most part they are way below the real rate of inflation.
I don't care either way, as I said just honest advice based on my experience, take it or leave it.
which ever way you look at it, a mortgage of 185k is a lot of money and it used to be that when interest rates followed inflation that you would end up paying over 3 times that back. That's 500K out of the economy and I for one would rather spend that on myself and my family.
As has been said, go whole of market. Look at Charcol for quick quotes and guides to how much you might be able to borrow.
Also, consider a year or two at interest only just to help you adjust to the new spending amounts. Regardless of people saying this is bad advice, it isn't as long as property values increase, which, given history, they will. It works, for a hell of a lot of people. A GP friend of mine pays interest only on his house in Sandbanks and has done since he moved there. It gives him and his family an enjoyable lifestyle and once the kids move out he will move, the value of his house will pay off his outstanding mortgage and he'll be able to easily buy something smaller.
But, this is an extreme example (albeit common), a year or so on interest only is a much more favourbale option. Remember, this won't be your last mortgage, you'll move, bigger mortgage, etc, so a year or 2 IO now will not hurt one bit.
If you can afford capital repayment, then great. Also consider paying slightly more if you can. Say your mortgage is £675 a month, then you should consider paying £700 a month (£25 overpayment). This can help reduce a mortgage term by up to 7 years +
Lastly, insurance. Make sure you budget for Life Insurance, home insurance, building insurance, and some form of protection policy if you are injured or unable to work. Don't take the quotes from mortgage brokers, looks these offers up yourself.
Case in point: My home insurance was billed through my broker via AXA. They quoted me £120 a year for £15k cover, no accidental, and pretty much no other frills. I went to AXA directly and for £112 a year got £60k cover, personal liability, accidental damage, annual travel insurance and some other bits too.
My life cover, 30yo Male, non smoker non drinker. £12 a month. From my mortgage broker.....£47 a month.
Do your research and crack out the notepads.
Subject to making sure you're saving elsewhere, I'd go interest only anyway.
Alternatively, a portable, offset term tracker without ERC might be worth considering, but at 75% LTV this will cost you 2.99% or 2.49% at 65% LTV.
Indeed, but somehow 'there are no payrises' covers it?
yes ok you're right, no pay rises at all for anyone ever at all was exactly what I meant, well done.
I'm just putting it into context. Many people would have you believe that no employer is hiring, no one is earning more than they did 2 years ago and everyone is struggling to survive - to be honest it's complete rubbish.
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It's a statement of general fact. Your 3 family members are hardly representative of the entire country.