Best way to start off on property ladder

[Semple]

Does having a larger deposit effect the chances or actually getting a mortgage or does it effect the amount they will give you?

Don't think anyone actually answered your question.

In case you've not already had a read up on it. A larger deposit doesn't necessarily mean you'll have a better chance of getting a mortgage, i.e. you could have a 50% deposit, but with a very bad credit rating, the lender might not be willing to trust you.

The amount they lend you should only be based on your income/outgoings rather than taking the deposit size into account.

What the deposit size will dictate is the interest rate of the mortgage. As a minimum you need a 5% deposit, which would be a 95% LTV mortgage - the rates on these are quite poor. It then sort of goes down in bands, so 80-95% LTV you might see a 0.2% drop in rates. Then 60-80% you might see a further 0.2% drop.

Typically though, the bigger your deposit, the better rate of interest you'll get.

 

[a1ex2001]

The amount of my friends and cousins who have 'played' the ladder over the last 10 years or so and are now in a nice sized family home, large garden and semi detached/ detached staggers me. The thing that staggers me even more is the amount who have made profits on 2 or 3 moves and are now in a 'dream' home, BUT on interest-only mortgages also amazes me. I certainly remember interest rates at 4+ %, yet these folk believe the house will have gone up enough in value to cover this eventuality. Being a parent myself, I simply couldn't risk everything like this, maybe I'm a worrier, it seems like everyone else does this as the norm, they are always asking when I'm moving or building a big extension??? Anyone else in their mid 30's also see this trend amongst their friends/relatives?

They are probably waiting on interest only mortgages becoming the next PPI scandal so the banks have to pay off the mortgages!

 

[Madwelsh]

They are probably waiting on interest only mortgages becoming the next PPI scandal so the banks have to pay off the mortgages!

lol, that may well be, I want to know what BS will fill the hours of commercial airtime when ppi is officially over.

 

[a1ex2001]

lol, that may well be, I want to know what BS will fill the hours of commercial airtime when ppi is officially over.

I will be very surprised if interest only mortgages don't become the subject of a big miss selling 'scandal' it's too easy for people to plead ignorance!

 

[Psycho Sonny]

I will be very surprised if interest only mortgages don't become the subject of a big miss selling 'scandal' it's too easy for people to plead ignorance!

no chance.

it's in the name interest only. also no bank offers an interest only mortgage today and hasn't done so for many years now.

only those who took them out and never remortgaged. they are idiots anyway for not remortgaging to save on interest in the first place. i'm sure they must have had letters from their bank asking them to switch to a capital repayment mortgage and they binned them.

 

[a1ex2001]

no chance.

it's in the name interest only. also no bank offers an interest only mortgage today and hasn't done so for many years now.

only those who took them out and never remortgaged. they are idiots anyway for not remortgaging to save on interest in the first place. i'm sure they must have had letters from their bank asking them to switch to a capital repayment mortgage and they binned them.

Don't be so sure the PPI nonsense gives you clear indication of what can happen. I'm sure there was some Miss selling but the numerous time I was offered it it was glaringly obvious what you were getting!

 

[Psycho Sonny]

The amount of my friends and cousins who have 'played' the ladder over the last 10 years or so and are now in a nice sized family home, large garden and semi detached/ detached staggers me. The thing that staggers me even more is the amount who have made profits on 2 or 3 moves and are now in a 'dream' home, BUT on interest-only mortgages also amazes me. I certainly remember interest rates at 4+ %, yet these folk believe the house will have gone up enough in value to cover this eventuality. Being a parent myself, I simply couldn't risk everything like this, maybe I'm a worrier, it seems like everyone else does this as the norm, they are always asking when I'm moving or building a big extension??? Anyone else in their mid 30's also see this trend amongst their friends/relatives?

talking rubbish. you can't get interest only mortgages these days. they haven't been around for 10 years or more now.

i know someone who was on one and when they went to remortgage they were forced onto a capital repayment plan.

Don't be so sure the PPI nonsense gives you clear indication of what can happen. I'm sure there was some Miss selling but the numerous time I was offered it it was glaringly obvious what you were getting!

there would be riots in the streets if that happened.

so all the people who have been paying their capital off would be losing out majorly.

no chance in hell of this happening i'm afraid.

 

[Madwelsh]

talking rubbish. you can't get interest only mortgages these days. they haven't been around for 10 years or more now.

i know someone who was on one and when they went to remortgage they were forced onto a capital repayment plan.

Funny, have you tried putting interest only mortgage in google? Yes they disappeared for a bit, and maybe it was a little bit longer than 10years, since having kids years and time seem to be on FFx4. You can actually get interest only, although no where near as good as they were granted. They seem to have come back again around 2015. I assume they disappeared in 2008 when everyone realised just handing money out wasn't going to work.

 

[purplesky]

There will always be winners and losers in the property market. A lot of it will have a lot to do with when people bought and sold their property. And making a profit to downsize isn't always that easy, particularly as people get greedy and complacent. Over the coming 10 years, we're either going to get massive inflation in house prices, which also comes with massive inflation in just about everything else like food and fuel, or we'll get a humongous crash. Either way, the majority of people will likely be far worse off because of it. The housing market has been a complete hot mess now for too long, there will always be consequences at the end of the line when such bubbles keep getting artificially inflated. Best thing anyone can do is pay off the mortgage as soon as possible and keep the hell out of the market thereafter.

 

[Psycho Sonny]

Funny, have you tried putting interest only mortgage in google? Yes they disappeared for a bit, and maybe it was a little bit longer than 10years, since having kids years and time seem to be on FFx4. You can actually get interest only, although no where near as good as they were granted. They seem to have come back again around 2015. I assume they disappeared in 2008 when everyone realised just handing money out wasn't going to work.

What are the new deals?

The majority of lenders now offer interest-only mortgages in some form, although some such as the Nationwide, Coventry and Yorkshire building societies have so far refused to re-enter the market. Most recently, Kensington relaxed its lending criteria to allow smaller deposits. It will now accept those with 25% deposits, down from 50% for either new loans or those remortgaging. However, borrowers must have an income of £75,000 a year or more.

NatWest has re-entered the interest-only mortgage market after a three-year absence, but requires somebody to earn £100,000 excluding bonuses, and have a repayment plan in place. Borrowers will also need a 25% deposit.




You have to be earning an extremely good wage to get one. Therefore to be earning such a wage you cannot be stupid or poor.

You no longer will have average joe with such a mortgage they are for the elite only now who have a real plan and ability to pay the lump sum off.

Effectively they are no longer an option for 95% of people

 

[Madwelsh]

What are the new deals?

The majority of lenders now offer interest-only mortgages in some form, although some such as the Nationwide, Coventry and Yorkshire building societies have so far refused to re-enter the market. Most recently, Kensington relaxed its lending criteria to allow smaller deposits. It will now accept those with 25% deposits, down from 50% for either new loans or those remortgaging. However, borrowers must have an income of £75,000 a year or more.

NatWest has re-entered the interest-only mortgage market after a three-year absence, but requires somebody to earn £100,000 excluding bonuses, and have a repayment plan in place. Borrowers will also need a 25% deposit.




You have to be earning an extremely good wage to get one. Therefore to be earning such a wage you cannot be stupid or poor.

You no longer will have average joe with such a mortgage they are for the elite only now who have a real plan and ability to pay the lump sum off.

Effectively they are no longer an option for 95% of people

So I wasn't talking 'rubbish'? I did say in my original post it was 10 or so years, 12 or 13 for example would have been 2004/05? Wasn't that when any average joe played this game? Nevermind, you've gone from nobody offering them to, 'they offer them to the mega rich', let alone the people I was talking about 10 or so years ago.. Don't particularly like being made out to be 'talking rubbish' as you put it.. I simply posted what I had seen from my limited sphere of existence , quite why you needed to point out I was talking rubbish is something only you can answer.

 

[Skillmister]

talking rubbish. you can't get interest only mortgages these days. they haven't been around for 10 years or more now.

I have two on my desk in front of me, and I can assure you neither of them are mega rich .