General Mortgage Advice

snappyfish

snappyfish

snappyfish

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Joined
14 Dec 2008
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1,019
Location
UK
Hi,

First time mortgage for me, lucky enough to have a big deposit.

Wanting to borrow £37,000 against a property worth £200,000

I know nothing about this, can anyone help and point me in right direction?

Thanks
:)
 
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General advice for a mortage of that size would be to look closely at the product fee/cost rather than just the headline interest rate. So you might find a deal that is 1.5% but that has a £1999 upfront fee, so just make sure you've done the sums to work out the best.
 
Just walk into your bank and ask them. With that deposit anyone will give you whatever you need.
 
I would look at flexibility rather than headline rate, if a better deal comes along you want to be able to jump.

Back in the day they would offer you all sorts of stuff.

Maybe consider an offset mortgage, that way you don't have to worry about overpaying. We did that and told them to knock the savings off the loan, worked out well for us.
 
snappyfish said:
Surely they still take into account your earnings? Would be silly to lend someone money if they earned small wage regardless of deposit?
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Well they will look into affordability. A mortgage of the size you want would be about 200 a month. So unless you're on the dole I imagine it's affordable for you.

If I was dealing with that amount of cash I think I'd rather just talk to the bank instead of speculate on a forum :)
 
Would a bank loan not be possible here for such a small amount? Not sure if the rates would be better/worse but would maybe be a lot faster, and have no stipulations from bank on house.
 
Personally i would borrow £50K over a 10 year period and atm i would fix for 2 years. Nationwide is personally who I would go with as I bank with them and you get a special deal that way, increased cashback, etc.

Why £50K? well many reasons;

It allows you to overpay £5K a year (10% of the loan) so it's not as restrictive when it comes to making overpayments. on a £35K loan it would only be £3,500 a year.

The extra £15K you will have in the bank you can use for anything you so wish, home improvements, new car, extension, conservatory, loft conversion, etc, etc. Or just save it and use that to overpay £5K straight away and have £10K in the bank for emergency purposes. Basically loads of flexibility.

Do you need to buy furniture? Because if you do it isn't cheap if your buying decent stuff brand new. I could blow £15K on a few couches, tables and beds. A tv could easily eat £1-£2K too.
 
I have a similar sized mortgage on a property worth a bit more. I used a mortgage broker, London and Country, who talked me through repaying early to keep the total down.

I over mortgaged by 10k and used some of the deposit to furnish the place.

And yes they still went through my income and outgoings with a comb.
 
Another angle.

If I can get the money owed down to £30k

Then borrow that from First Direct 66 Monthly repayments of £498.83
Interest rate 3.4% p.a. (fixed)
Representative 3.4% APR
Total repayable is £32,923.11
 
snappyfish said:
Another angle.

If I can get the money owed down to £30k

Then borrow that from First Direct 66 Monthly repayments of £498.83
Interest rate 3.4% p.a. (fixed)
Representative 3.4% APR
Total repayable is £32,923.11
Click to expand...

3.4% is garbage.

he'll get a much better rate with a proper mortgage.

another vote for london&country, i've bought 2 houses using their mortgage services and done 2 remortgages. there is a reason they are top rated on money saving expert. They found me deals I couldn't find anywhere else. they are fee free so you have nothing to lose by giving them a shout and seeing what they can find for you.
 
Teknobry said:
3.4% is garbage.

he'll get a much better rate with a proper mortgage.

another vote for london&country, i've bought 2 houses using their mortgage services and done 2 remortgages. there is a reason they are top rated on money saving expert. They found me deals I couldn't find anywhere else. they are fee free so you have nothing to lose by giving them a shout and seeing what they can find for you.
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Phoned London and country, there main goal seemed to be selling me a pension, life insurance and trying to get me the longest loan possible 10 to 12 years. They also told me HSBC are not included in some of there deals but in fact they are as I phoned them direct.
 
buying a bigger house may be stupid idea if he has no need for a bigger house, why heat up a 7 bedroom home when only you living there?

however he could buy a more expensive home in a more affluent or more developed area. nearer the city or west end, etc. i know in the west end of glasgow £200K would struggle to get you a 1 bedroom flat.

the reasoning behind a more expensive home is it will increase in value more than a cheaper home. so you will have more equity in future.

this is definitely something i would do if i only had a 30K mortgage.


snappyfish said:
Another angle.

If I can get the money owed down to £30k

Then borrow that from First Direct 66 Monthly repayments of £498.83
Interest rate 3.4% p.a. (fixed)
Representative 3.4% APR
Total repayable is £32,923.11
Click to expand...

3.4% you do know a 2 year fix would be less than 2%?

a 5 year fix would be less than 2.5% or thereabouts.

so you would be stupid to use a loan when mortgages are the cheapest loan you can get other than student loans.
 
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