Mortgages....

quackers said:
Sorry to hijack, but what do people think of this deal with the Lloyds?

http://www.lloydstsb.com/mortgages/llah.asp
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I'm just about to complete on my first home with this deal. (although mines not the local deal)

My parents have put £15k in a bank account, locked away for 3 years now, which gains them currently £36 a month interest, and i've put £5.5k down in deposit. The rest is on a 95% mortgage

Place i'm buying is 82k, mortgage is just short of 77, and my repayments are £373 a month.

Its been a bit of a faff to sort out (legal stuff cos of my parents putting money away etc) but now its all about to finally pay off (pardon the pun) I am very excited.

As a single first time buyer who spent the last couple of years paying off stupid debts, and unable to save any kind of major money, its been the only way I can get on the property ladder.

1 bed flat here in Bristol with a garden, its less than 3 years old. I'm happy. :)

Shout if you wanna ask anything.
 
knip said:
I'm just about to complete on my first home with this deal. (although mines not the local deal)
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That's the normal Lloyds Lend a Hand deal and I can't understand why anyone would take it. Your parents would have been better lending you the money directly. You're paying over the odds in interest on a higher balance.

It's a bad deal.
 
Dr House said:
Just at thought but if houses in the area are worth 400k. If you can get planning to knock the house down and build 3 or 4 new ones on the land you should get 150k per plot.

Also keep in mind if you borrow with a very high LTV ratio your interest rate is going to be very high. However maybe if you take a 2 year deal at 90% LTV and then do up the house and its revalued in 2 years at 400k you can then get very good rate as your LTV will not only be 50%.
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First point - not interested in doing it, good idea, but just not for us....

Second point - Thats the exact plan :)
 
The Halk said:
That's the normal Lloyds Lend a Hand deal and I can't understand why anyone would take it. Your parents would have been better lending you the money directly. You're paying over the odds in interest on a higher balance.

It's a bad deal.
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My parents wanted to make money, that was their intention. They get a good rate of interest on the money locked away, i'm paying 4.09% interest.
 
Your parents get less than 3% net interest, yet you're paying Lloyds over 1% more than that for the privilege. That's £500 over the three years to start off with.

You then have the mortgage with Lloyds who usually have mediocre interest rates, so there's a bit more room for savings there.

If your parents lent you 16K you could have had a cheaper interest rate and you could have split the difference between the two deals and without doing the figures I think it's well over a grand over 3 years.
 
The Halk said:
Your parents get less than 3% net interest, yet you're paying Lloyds over 1% more than that for the privilege. That's £500 over the three years to start off with.

You then have the mortgage with Lloyds who usually have mediocre interest rates, so there's a bit more room for savings there.

If your parents lent you 16K you could have had a cheaper interest rate and you could have split the difference between the two deals and without doing the figures I think it's well over a grand over 3 years.
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The point is, they don't want to lend me 16k, they don't mind locking some money away for a while that gets them something back, but as they have two other children to consider, one of whom already has a mortgage, the other two would be asking if they could borrow 16k as well. This way I get out of home, its an amount I can afford to pay and still live, and most importantly it gets me on the property ladder. :)
 
knip said:
If they lent it to me though, any return depends on house prices, this way they're guaranteed something back in return. :)
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They're not though - at least as I understand the T&C when I read them. Their money is secured, meaning they can't access it until Lloyds release the security on it, which would be when you rearranged your mortgage after the 3 year fixed term, assuming there was sufficient equity to do so. You need to repay 5%/house price needs to leave you 10% equity by this point, which may or may not happen, and if house prices fall then there's no chance of them getting their money back.

They do get the interest on the money though, but if they'd lend it directly to you, then you would have saved a fair bit more than the interest they're getting - which you could have passed to them.

Anyway, by the sounds of things you don't want to be telling your parents they may not see their money again for a long time...
 
The Halk said:
They're not though - at least as I understand the T&C when I read them. Their money is secured, meaning they can't access it until Lloyds release the security on it, which would be when you rearranged your mortgage after the 3 year fixed term, assuming there was sufficient equity to do so. You need to repay 5%/house price needs to leave you 10% equity by this point, which may or may not happen, and if house prices fall then there's no chance of them getting their money back.

They do get the interest on the money though, but if they'd lend it directly to you, then you would have saved a fair bit more than the interest they're getting - which you could have passed to them.

Anyway, by the sounds of things you don't want to be telling your parents they may not see their money again for a long time...
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Yup, they've had all that explained to them. They have the cash spare that 15k sat locked away for a while isn't of any great loss to them fortunately.

Or maybe they're just desperate to get rid of me :p
 
I think these days before any mortgage is worked out the buyer requires a heavy deposit.

I put a 15% down (£9500) I wanted it paid off as quick as I can. I'm looking at between 15-20 years. I'm also allowed 10% overpayments each month.
 
Conanius said:
First point - not interested in doing it, good idea, but just not for us....

Second point - Thats the exact plan :)
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Ok you could try and cut off 1/3 of the garden and put another house in it (if the shape of the land allows) and that could give you 150k+ to do up your house?
 
due to the layout of the property that wouldn't be hugely feasible. Certainly a consideration though. I'd prefer the big garden to be honest though ! Its a huge attraction of the property.
 
It will be more expensive and take longer than you plan to do up. And be aware it will literally take over your life for the next 2 years.

Its gonna take longer if you don't have the cash ready to start doing things properly from day one. A friend has recently done it so I speak from experience and I'm current redecorating a unloved property which is expensive and hard enough, don't underestimate the commitment and stress you will be letting yourself into
 
Oh and I used flower recently (part of Romans ) for mortgage products. Can you not max out deposit and get the rest on credit/loan to do it up. (0% cards are useful !)
 
mrbell1984 said:
I think these days before any mortgage is worked out the buyer requires a heavy deposit.

I put a 15% down (£9500) I wanted it paid off as quick as I can. I'm looking at between 15-20 years. I'm also allowed 10% overpayments each month.
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Overpayments can make such a difference, if I overpay by £150 a month I'll pay my mortgage off in 17 years instead of 25 and save £30,000 in interest :eek:
 
Are you going the have the same mortgage for 17years though :p. but yes overpaying beats many saving rates too. Only problem is it locking the cash away.
 
Well hopefully I'd get a better deal somewhere else after my fixed rate period expires, but the idea is to get the thing paid off as soon as possible really.
 
Personally I'd weigh up the scale of the project, it sounds as though it may be a bit big to take on as your first. Depends on your personalities I guess, I'm moderately risk-adverse and don't think I could do more than cosmetic work on a property. The first house we bought needed some stuff doing nothing too major (damp proof course, better venting, firewall in the loft etc) and even that was a bit stressful.

On the financial side of things, you've come out with:
I have no idea how I could then raise the capital to do the work to the house
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This worries me a bit, it sounds as though basically you have a small nestegg saved up that needs to cover both deposit and any renevation work, and you aren't confident in your future earning potential (to pay for any work post purchase if you were to spend everything on the house). The thing is, even if you do have some cash left over it sounds as though spiralling costs could prove problematic if you aren't expecting to have additional surplus cash coming in over the next couple of years. So even if you got a very high LTV mortgage it sounds quite risky.

edit: finally in terms of IFAs worth speaking to, to help understand the market better but make sure they offer full market and watch out for them trying to push additional services on you (life insurance, income protection and all that sort of stuff - be prepared to say no!). The second mortgage we took out I didn't bother with one because I had a much better understanding of the market and what I was looking for, and it is a bit less hassle going direct to the lender.
 
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