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Please Sir can I have some more?
JamPam
Posts: 7 Forumite
[FONT="]First time post, please help us [FONT="]:)[/FONT][/FONT][FONT="] My fiancee and I buying a house for 103.500 we have been offered a fixed rate at 5.84 (4 years) to borrow 86,400 the deposit is for 17,100 the morgage is for 34 years , repay £491 per month with Abbey plc. Please please can anyone help us find a better deal? Thankyou[/FONT]
[FONT="]According to Cloudcockooland: [/FONT]
[FONT="]Perhaps as FTB you don't appreciate the maths involved.
Change the term to 25 years, and the interest will drop to £78,077. A total of £164,477 including the capital.
i.e. save yourself £34,534, just by having what used to be a 'normal', instead of long, term.
If you shopped around and manged to find a rate 0.5% lower, that will only save you £11,000, by comparison (assuming the rate gain stayed constant for 34 years)
Play with other lengths of term on the calculator, even cutting the term by just 2 years to 32 years will save £8,000.
Its not strictly what you asked for, but it would not be very MSE to ignore the fact that prolonged interest is a bad thing.[/FONT]
[FONT="]:D[/FONT][FONT="]This is all good, love the calc, but I can’t find anyone who will offer this in real life, and the monthly repayment would be too high for us. I did have a bit of an issue with the length of the term (didn't realise quite how much) which is why I am asking your lovely selves for some advice for something better (since I've also read about abby's admin problems).
This is our first house buy, it is a god send that you guys are here because we can see a record of your responses and advice and how you moderate each other too, we can trust in your advice [FONT="]:j.
We weren't given much of a choice because of our current joint earnings and COL. 34 years is the best London and Country could offer for our currently joint income of just 22,700, repayments would be £491, which is manageable for us. [/FONT][FONT="]Apparently our COL has contributed to this figure (which is below average - we said 20 pounds a week for food and only one car. We have no credit cards, never have, no bad debts.[/FONT]
[/FONT][FONT="]
But, this was just before the changes to Britannia BS and The Post Office were put in place. Could we negotiate this to 25 once fixed term is up. Do you think shorter term variable would be better?
In a year's time - once I have finished my diploma I will be doing a lot more hours, my earnings are usually more but I had to cut my hours to fit this course in, they will only consider last 3 months of wages but over the year it would have worked out more.
[/FONT]
[FONT="]According to Cloudcockooland: [/FONT]
[FONT="]Perhaps as FTB you don't appreciate the maths involved.
Change the term to 25 years, and the interest will drop to £78,077. A total of £164,477 including the capital.
i.e. save yourself £34,534, just by having what used to be a 'normal', instead of long, term.
If you shopped around and manged to find a rate 0.5% lower, that will only save you £11,000, by comparison (assuming the rate gain stayed constant for 34 years)
Play with other lengths of term on the calculator, even cutting the term by just 2 years to 32 years will save £8,000.
Its not strictly what you asked for, but it would not be very MSE to ignore the fact that prolonged interest is a bad thing.[/FONT]
[FONT="]:D[/FONT][FONT="]This is all good, love the calc, but I can’t find anyone who will offer this in real life, and the monthly repayment would be too high for us. I did have a bit of an issue with the length of the term (didn't realise quite how much) which is why I am asking your lovely selves for some advice for something better (since I've also read about abby's admin problems).
This is our first house buy, it is a god send that you guys are here because we can see a record of your responses and advice and how you moderate each other too, we can trust in your advice [FONT="]:j.
We weren't given much of a choice because of our current joint earnings and COL. 34 years is the best London and Country could offer for our currently joint income of just 22,700, repayments would be £491, which is manageable for us. [/FONT][FONT="]Apparently our COL has contributed to this figure (which is below average - we said 20 pounds a week for food and only one car. We have no credit cards, never have, no bad debts.[/FONT]
[/FONT][FONT="]
But, this was just before the changes to Britannia BS and The Post Office were put in place. Could we negotiate this to 25 once fixed term is up. Do you think shorter term variable would be better?
In a year's time - once I have finished my diploma I will be doing a lot more hours, my earnings are usually more but I had to cut my hours to fit this course in, they will only consider last 3 months of wages but over the year it would have worked out more.
[/FONT]
0
Comments
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No "advice" here..it is opinion...should you require advise, see a Mortgage Adviser.........
You cannot make a decision on what you may pay over the term of the mortgage....People's circumstances change...ie After x amount of years the may decide to have children and be reduced to one income for a few years, at which point people may either choose to extend mortgage term or change to interest only ...to reduce monthly payments.....
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Its your choice to buy now. Rather than wait for your earnings to increase and then save more of a deposit. Then you would be in a much better position financially.
On a 34 year term the amount of capital repaid in the first few years will be very small. So you may be disappointed when you look to move up the ladder in a few years time and find that you have little more equity in this property. Despite paying out thousands of pounds.0 -
will this mortgage allow you to overpay when your income improves0
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Just because you start on a 34yr term it does not mean you have to follow this path for 34yrs...If at the end of a ie 2 yr deal coming to an end, if affordability allows you can reduce the term to match the monthly mortgage payments you can afford...........When incomes increase it is not unusual to reduce a mortgage ie by 10 yrs........0
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Thankyou, been on the phone to various mortgage provs, broker insists its a good deal because fixed for long term security, it only allows 10%. VIG22What's your opinion
on a shorter fixed 2-3 or variable 2-3, then when the term is up, I can prove increase in earnings, then might it be poss to get better deal? Coop have a 2yr fixed at 4.49 but fee is £999 val fee at £275 10% overpay allowed, repay 488.49
Do you know of similar with slightly less fee??an extra year would be nice am I dreaming???
(what do you think about Leek BS, Britannia BS and the PO or ING. I'm going to do a search on the PO now...no good only 80% LTV)
Abbey - booking fee 495 trans fee 35 mort acc fee 225 legal fee 126 and £250 cashback, its only 10% payback for the term CAZ3121, which is not good eh? Apparently we can move to another provider penalty free at any time - even 3 months after arrangment, but that would cost us surely? more fees not to mention headache...
I could ask my mum and dad to be guarantors though my poor dad got made redundant a year ago just 3yrs off retirement, so would just be my mums earnings.
FTBs
Partner income - 18,200
my income - 6,000
NO debts / no bad credit history/ no credit
Price of house £103,500 (already neg down as quick sale needed, relocated)
want 25 year term if poss
85% LTV
deposit 15% up to 16,500
monthly repay up to 500 max max
Thrugelmir - we need to move as we are desperate for the space. But that is a wise point, who knows house prices may not change that much over the next two years.
I don't feel good about this Abbey deal...
Its so nice to have your support, thankyou everyone x0 -
This forum is not regulated for advice only opinion....why are you not using a whole of market broker for advice?0
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I am using London and Country but they insist the abbey is a good deal and I don't like it. Sorry for my ignorance - I turned to you in desperation and got carried away, I am overwhelmed and worried. I'm going to see what I can find on the internet. Thanks and sorry again.0
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No need to apologise....if you don't like it don't take it........pointless using an advisor if you don't trust their advice.........0
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Totally agree with VIGILANT22 (again) if you dont trust an advisor dont use.
Why not find an advisor you do trust? Get a recommendation from a friend or something.
You will not find a single qualified person on here that will tell you if the Abbey deal is right or wrong for you because you are not their client and they havent done a full fact find on your to be able to recommend that deal.I am a Mortgage Adviser
You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
If it's the same as any Abbey mortgage I've ever had, the 10% overpayments means you can overpay by 10% of the total balance outstanding in any one year. That means you can overpay by £8k. I doubt you'll be able to make overpayments of more than £650 a month!
So, while the suggestion to reduce the term is correct, you would get the same benefit from keeping the 34 year term and making overpayments each month.
Use the calculator to see what you would be paying per month on a 25 year mortgage and make up the difference in overpayments.
I think the 4-year fix sounds reasonable.
You are on a very tight budget. I know that your income should be going up, but you can't guarantee that. If you went for a variable rate and rates went up by 1%, could you afford it? I doubt it.
If you went for a 2-year fix and rates were high when coming out of that fix, could you afford it?
And that's the other reason to make those overpayments. The more you overpay the more your balance will reduce. That means the lower your mortgage will be when your fix ends. If you can reduce your balance significantly over the 4 years, even if rates are high then you'll be able to cope.
I think the question you have to ask yourself is whether to buy now or rent for a year. If you want to buy, I think if I were you I would go with the mortgage your adviser has suggested and overpay as much as possible.0
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