FTB looking for advice....

TheAnalyst · 28 April 2009 at 10:52AM

Hello all, thanks for taking the time to read my post.

I'm a FTB, the flat im looking at is a new build in Glasgow, they currently have a shared equity scheme (well.. deferred loan, i'll actually own 100% and have 10 years to "buy" the rest)

The flat is listed at £150,500 however they are surveying at much less... the last one of this type surveyed at £130,000 3 weeks ago and they are "going with" the survey price.

The deal is:

75%/25% loan
£250 holding fee (paid)
£215 survey
£200 legal fees (£600 off)
£200 "deposit" to move in

I have had an offer in principle from Halifax, they will lend me up to £122,000 but going on the flat surveying at £130,000 i'll only need to borrow £97,500, the rest as I said is an interest free 10 year deferred loan by Barratt.

Mortgage options i'm looking at are:

30 year - £499 fee added to loan
2 year fixed 5.29%
3 year fixed 5.15%
5 year fixed 5.62%

30 year - £499 fee added to loan
3 year tracker Tracks at 3.59% + BOE

My gut instinct tells me to fix it for the 5 years so I know exactly that i'm going to be paying but a mortgage advisor mate who has just bought in the same development reckons I'm mad and to go for the 3 year tracker.....?

Obviously I've never done this before and it's all pickling my head a bit! What would you do in my shoes and why?

Cheers!

:beer:

luckyfool · 28 April 2009 at 12:05PM

Mortgage Advisor /= Psychic or necessarily the wisdom of Solomon.

I personally would be fixing for 5 years, and if your gut instinct is the same then I would trust it. Maybe rates will stay at 0.5% for 5-10 years and you will pay around 1 - 1.5% more on the 5 yr fixed rate than you would have on the tracker. However if you took the tracker and rates hit 5% again 2 yrs from now your mortgage rate would be over 8%. Stick with the security imho.

TheAnalyst · 28 April 2009 at 4:05PM

Thanks for the reply, as I thought, best be on the side of caution me thinks.

Another quick question....

As I stated I was given my AIP from Halifax, I was told that they do a "soft credit search" at the AIP stage, does anyone know which credit reference agancy(s) they use for this and is there another full credit search done again at some point further down the line?

Just want to know if this is a definate YES, my credit file is clean now but it never used to be when I was younger... so used to being turned down in the past for most things that I'm almost expecting something to go wrong now

Thanks!

TheAnalyst · 28 April 2009 at 9:09PM

Can anyone shed any light on the Halifax credit checking process?

danielanthony · 29 April 2009 at 8:24PM

This might help:

http://www.moneysavingexpert.com/cards/credit-reference

Halifax use all 3 apparently...

shellnapier · 29 April 2009 at 11:01PM

we had a crdit check for similar type of mortgage by halifax a month back. this was at the first meeting, and we was told wed passed - my parnter has excelent credit, i had bad credit last yr, due to 2 overdrafts with them, and mb 2 missed payments on next.. however worked so ahrd last 6month it got ti fixed, not at the best think am in the middle and so far tehy said we have pasty

poppy10_2 · 30 April 2009 at 12:19AM

Shared equity is a scam, and buying a new-build flat in Glasgow with what is essentially a 100% mortgage at the moment is financial suicide.

NAR · 30 April 2009 at 1:07AM

poppy10 wrote: »

Shared equity is a scam, and buying a new-build flat in Glasgow with what is essentially a 100% mortgage at the moment is financial suicide.

Please give the OP a solid explanation for such a statement.

poppy10_2 · 30 April 2009 at 1:28AM

NAR wrote: »

Please give the OP a solid explanation for such a statement.

Do you really need me to spell it out for you?

House prices are falling at a rate of 20% per year.
New-builds are falling even faster, with flats being particularly badly hit. Thus buying with a 100% mortgage at this time will leave the buyer in negative equity before they even move in.

As for why shared ownership is a scam, there are numerous other threads on this topic.

Hope you understand now. If you would like me to use smaller words just let me know.

luckyfool · 30 April 2009 at 11:19AM

And your expertise on house prices in Glasgow and Scotland is coming from where?

New Build Flats in Glasgow and around have already taken a hammering, there is an argument that as long as the OP is negotiating hard to get a fair price for the flat, and his/her intention is to stay there in the medium to long term, then there is only so much further the value can fall and it might be a reasonably good investment in the medium to long term.

Also, house prices in Scotland have certainly not been falling at 20% per annum.

luckyfool · 30 April 2009 at 11:22AM

TheAnalyst wrote: »

Can anyone shed any light on the Halifax credit checking process?

The soft footprint "quotation search" does not leave a mark on your file visible to other credit providers, i.e. it does not impact your credit score. They will do a full search on application, however this is only likely to change the decision if your circumstances have changed (i.e. got a court judgement or default, or stopped paying a mortgage etc). They may also do another search prior to completion depending on the delays/timescales.

Halifax are not known for backing out of their initial agreements so as long as the survey is ok, and you keep your nose clean on any credit then you should be fine.

If you have any concerns about the price of the flat, make sure you instruct your own valuation, and give the valuer a call and chat with him/her to get their opinion.

FTB looking for advice....

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