FTB - Mortgage Product Advise

jskcv1

Hi there,

I was hoping that some of the excellent experts on here could give me a bit of advice. I've got some advise from a IFA but it's nice to be reassured his squares up with other opinions.

My situation is, I've been graduated 2 yrs and am on a salary of 26K plus 2K bonus paid on financial performance of the Company 75% based on turnover and 25% based on profit. My salary has risen 25% this year and expect it to raise the same again next year before it levels out a bit.

Only outgoings is an £80 payment for my student loan (outstanding Balance 5K) and £22 a month company car contribution

I have a company car and fuel card which takes my taxation a month up to about 24.5% rather than 22%

Although I don't use a credit card for personal use, I do have one for expenses at work, it has a balance of 2.5k but this is due to be paid off in the next week or so in full by my company, My question around this do I delay applying for the mortgage until I put the balance back to 0, will having such a high balance on it affect the application)

I want to buy a £145k (hoping to get it for 140K, but if not I still want it) property and have a total pot for deposit/legal fees/mortgage fees of about 27/28K so I'd say a deposit value of about 25K. The property is Stamp Duty exempt.

I'd like to know what products you'd recommend to somebody in this situation. My prudent head says go for a fixed rate repayment over 3 years and not worry about any potential rate increases plus keeping the payments as low as possible until my salary catches up, Is there anything out there lower than the A&L 4.64%, should I consider trackers, offsets etc?? (I'm struggling to know what they mean in plain English!)


Looking forward to getting your ideas.

Great Forum, only just been introduced to it, but I think I’ll be here often!

Cheers

John

stanmoresaver

Has your broker advised you that you can get the A&L deal?

jskcv1

No, that was just me doing some inital groundwork myself. We've only had an initial chat to assertain I can afford to put an offer in. He was aluding that looking at fixed rate repayment is the way to go(which was my gut feeling from the start). We'll sit down and discuss products once my bid is accepted, I'd just like to bring something to that conversation by having some ideas of my own.

stanmoresaver

It is a high multiple of your salary and i don't think A&L will do it.

My advice is to trust your broker, and your "gut-reaction" about him, his capabilies and his trustworthyness. Ask for his recommendations, and there reasons why in writing- how the product and lender has been arrived at, but don't insult his intelligence. It is always helpful to have some ideas but suggesting lenders and deals that are out there may well suggest that you are trying to do his job for him, and most people have a less than favourable reaction to that. (well at least i do)

For what it is worth- i feel a fixed rate would be sensible too.

jskcv1

I have no intention of trying to undermine him, the developer has pushed me towards this guy, which I'm a little nervous about. I'd usually take somebodies advice on such an appointment. I will probably end up going with his advice when we sit down, he seemed ok to me, this is just a massive decision and want it to be the right one. I don't think it pays to just sit there and nod at everything he tells me, and if he's worth his salt he'll understand me posing questions. The last thing I want to do is to go and blow his recommendation out the water because I've been told other things are better, I'd want him to tell me why they aren't suitable if I ask him about them .Yes it's a high salary multiple, a valid reason for a knockback, hence I've got a large deposit and hope to find a lender who will think I'm worth the risk, I hope that something like the Coop Graduate mortgage will be my fall back, There just might be something in between to save me a few pounds here or there.

Thanks for your input, you only add weight to my thoughts. Which seem to be going along the right path. That 3 years doing a finance degree must have had some value, shame i'm wasting it in IT consultancy!

Cheers

John

meanmachine_2

Alliance and Leicester would probably lend you £115-£120K, so that sounds do-able.

Whether it's prudent or not is up to you.