Mortgage advice ?

[Redman]

Buy with the intention of buying somewhere to live for at least 5 years, that way all the fools who've convinced themselves that buying a house is an 'investment' may disappear into the woodwork and leave you alone.

It's not foolish to buy at the moment, you just have to have a decent deposit, agree a decent discount (30% of peak price, summer 2007 is about standard) and be aware this is a long term thing, no more buying for a year and selling for a profit, just because it's the housing market and that's what the housing market does. The deposit is key, without a 10% maybe even 15% deposit you're looking at 6% + interest rates on the mortgage - with 15% you can fix at 5.5%ish for 5 years - bearing in mind that the historical average for rates is usually about 8-9%, and there's no way interest rates are going to stay this low for more than 2 years.
There's a reason banks want a 15% deposit, that's their safety barrier, it will absorb losses before prices bottom out then rise again, that's what they're gambling on and ensures if you do fail to repay they get their cash back.

Most crucially, make sure you can afford a rate rise when it happens, because it will. And good luck, look around plenty before you dive in.

 

[nuclear92]

Even if you don't plan on staying for long it seems to me that renting is pointless, it's simply money down the crapper, if your paying back a mortgage, then if you move and house prices go up won't you make a little money?

 

[clv101]

Even if you don't plan on staying for long it seems to me that renting is pointless, it's simply money down the crapper, if your paying back a mortgage, then if you move and house prices go up won't you make a little money?

No, it doesn't work like that. Renting is no more 'pointless' than paying INTEREST on a mortgage.

For example, you could pay £400 a month rent and save £400 into a savings account each month. Total cost £800 a month. Personal wealth increases £400 a month.

Or you could pay £800 a month mortgage - of which £350 was repaying the capital and £450 was interest. Personal wealth increases only £350 a month.

Numbers made up to make the point, but it's wrong to think of renting as pointless and a mortgage as some kind of investment.

 

[aproctor]

Even if you don't plan on staying for long it seems to me that renting is pointless, it's simply money down the crapper, if your paying back a mortgage, then if you move and house prices go up won't you make a little money?

First of all i am not keen on renting, but the fact remains that renting is not always throwing your money down the drain.

If you get a 25 year mortgage half of the money you pay over that 25 years is interest @ 5%.

Do people actually think if they ate paying £1000 a month towards "their" house this is how much equity is being put in to the property?

You can rent a much nicer place for a few hundred pounds less a month than "buying" expecially with upkeep and what not, if you are disaplined enough to invest the excess each month even a run of the mill share portfolio should give you similar returns.

 

[Spuderoony]

Numbers made up to make the point, but it's wrong to think of renting as pointless and a mortgage as some kind of investment.

Unless your other option is to remain at home rent free. In which case you're wrong.

 

[starfighter]

The last crash started in 1990 and ended in 1996.

This one started in 2007 so maybe aound 2011-12.

Might aswell save that deposit a little longer.

 

[aproctor]

The last crash started in 1990 and ended in 1996.

The last crash was 1988 to 1995, i suppose it's neither here nor there, but prices didn't start rocketing until at least 1999.

 

[starfighter]

sorry. I was born in 1985, was more interested in Thomas the Tankengine.

 

[aproctor]

sorry. I was born in 1985, was more interested in Thomas the Tankengine.

I was born in 1987, my mind has the ability to absorb information from the past though

 

[Raumarik]

Johnnytoxic - I don't think you really understand mortgages mate, my advice would be to book an appointment with your bank and go talk to them. Don't sign anything, but speak to their free mortgage adviser who'll be able to explain everything to you. Whatever quotes you get, you'll probably be able to beat elsewhere though

 

[mattheman]

I take it you buy shared ownership if so dont buy.

 

[mattheman]

btw interest adjustments are coming, be warned.

 

[fendi]

I take it you buy shared ownership if so dont buy.

Has anyone on the site had any success with these schemes?

I went for a viewing the other day for a 2 bed apartment. Getting an appointment with a FA to see what they say.

 

[Sash]

I am qualification wise qualified as a mortgage adviser. I would keep saving for now. Save for a decent deposit so you can buy a house that you REALLY want rather than get a mortgage just now and buy whatever you see. With the way the markets are and will be for the next 3 or 4 years I dont really see the point in buying a house just now with a mortgage as you will find it harder to save.

Edit: that didnt really make sense, slowly making my way through a bottle of jack daniels...

What I was trying to say, is dont impulse buy when buying a house. Keeping saving up and get a good deposit under your belt. This will mean you will get a smaller mortgage on your house (depending on the house value) if you bought the house and then decided you didnt like it, you may find its harder to sell and you will end up paying a lot for estate agent/solicitor fees while your house is on the market waiting to be sold.

Keep saving and be patient.

 

[Kitchster_uk]

Would depend on where you live mate, as well as how much you can afford. Rates will become somewhat more competitive but the real deals are Loan to value of less than 75%. This is because, after 80% LTV, the lender has to have around 30x more cover than they do below that mark and lever in another 5% for falling house prices.

Will prices continue to drop? In some areas, yes. In other areas, they have nearly bottomed out. THe thing is, how long do you wait? Until things just start to pick up? get on the ladder early in the recovery, only to find that it's all gone pear-shaped again and you have dropped a bollock. Or wait until the recovery is in full swing and pay over the odds?

If you can afford a mortgage, you might as well start now - not like you are getting any return for your savings whilst, in reality, the cost of living is going up so so saving = losing money to an extent. You will also need to factor in the costs of things like furniture, appliances, repairs and renewals, insurance etc AND most importantly, a 20% increase in your mortgage payments. If you cannot afford those, you cannot afford to buy.

 

[Glaucus]

44k , that's cheap, where do you live. Are you sure that's not for a 40% share of the house.

 

[fendi]

I am qualification wise qualified as a mortgage adviser. I would keep saving for now. Save for a decent deposit so you can buy a house that you REALLY want rather than get a mortgage just now and buy whatever you see. With the way the markets are and will be for the next 3 or 4 years I dont really see the point in buying a house just now with a mortgage as you will find it harder to save.

Edit: that didnt really make sense, slowly making my way through a bottle of jack daniels...

What I was trying to say, is dont impulse buy when buying a house. Keeping saving up and get a good deposit under your belt. This will mean you will get a smaller mortgage on your house (depending on the house value) if you bought the house and then decided you didnt like it, you may find its harder to sell and you will end up paying a lot for estate agent/solicitor fees while your house is on the market waiting to be sold.

Keep saving and be patient.

My situation is that I have 30/35k in savings that could be used for a deposit. The place I saw which was under a shared ownership had the option to buy between 30/50%. 30% of a 2 bed for £49,650 + £240 rent. If I was accepted and to go for the minimum of 30% putting down lets say 20k deposit the mortgage remaining would be easily affordable. More so if the girlfriend moved in too.

Renting just seems like such a waste at the moment.

 

[Sash]

My situation is that I have 30/35k in savings that could be used for a deposit. The place I saw which was under a shared ownership had the option to buy between 30/50%. 30% of a 2 bed for £49,650 + £240 rent. If I was accepted and to go for the minimum of 30% putting down lets say 20k deposit the mortgage remaining would be easily affordable. More so if the girlfriend moved in too.

Renting just seems like such a waste at the moment.

Seems more suitable now that you have stated more about circumstances. Have you been to an ifa to speak to them?

 

[fendi]

Seems more suitable now that you have stated more about circumstances. Have you been to an ifa to speak to them?

The estate agents (Connells) I went to see yesterday said they are going to arrange a meeting with an FA who works in house.

Most of my cash is with a building society, I'll make arrangements to see them in the next couple of weeks.

I understand not to rush into anything as the decision to buy (First time buyer) is huge and not one I want to end up regretting.

Just the idea of owning my own place and doing it up the way I want has got me motivated to buy even though perhaps I should hold off as prices are still coming down.

 

[Sash]

The estate agents (Connells) I went to see yesterday said they are going to arrange a meeting with an FA who works in house.

Most of my cash is with a building society, I'll make arrangements to see them in the next couple of weeks.

I understand not to rush into anything as the decision to buy (First time buyer) is huge and not one I want to end up regretting.

Just the idea of owning my own place and doing it up the way I want has got me motivated to buy even though perhaps I should hold off as prices are still coming down.

In the meantime I suggest doing a calculation yourself.

Basically, total up all your expenditure, all your income etc and see how much of excess cash you have. A good IFA will go over this with you.

When getting a mortgage try to remember to add up another £4-£50 on top of that (as an estimate) as you will want to protect this mortgage debt incase you get a critical illness/lose your job/die/are sick off work. Most of the time a decent life policy wont be more than £40 a month but the IFA should speak to you about getting a term assurance policy on top of the mortgage.