FTB mortgage advice

BenM_3

Im looking for some mortgage advice and would be interested in any suggestions.

Property cost 90k (valued 90k too)
Salary 35k
Disposable income 900/month
CC 4k at 0%
Savings 4.5 (use as 5% deposit?)

Im happy to move the CC balance to keep it at 0% till I pay it off. Currently paying 200/month so 20 months to go.

I would consider any type of mortgage but since I am a FTB I would probably lean towards the more cautious options.

I hope to stay in this property for 2/3 years before buying a bigger place.

I will need to pay £650 to the solicitors too. Hopefully this, and any other fees, can be added on to the mortgage.

Look forward to any advice.

Regards
Ben

Heth_2

You can easily add the mortgage arrangement fee to the mortgage but so far haven't seen the option of adding the solicitors fee to the mortgage.
Have you got a quote for the solicitors fee and searches, 650 seems a fairly conservative estimate to me. Have you also considered the mortgage valuation, and whether you will have a separate homebuyers or structural survey done?
You will also have a higher lending charge with most lenders (we've found they have this unless you have a 10% or greater deposit). You can add this to the loan though.

How did you calculate your disposable income? Is that what you have left each month after all outgoings?

If i were you i would go for a fixed rate for 2-3 years with no tie in after that or you will be paying big charges when you sell before the tie in is up.

BenM_3

Have been quoted 650 all charges included. I thought that was quite expensive. Anyway it has been agreed.

We have paid 150 for a scheme 1 survey already.

Disposable income is what we are left with at the moment at the end of the month. Then I added our rent for the month that we would not pay if we had a mortgage.

Any particular mortgages you would suggest? Im thinking a 25 year mortgage would cost about 5-600/month. Any extra could be put on CC to pay it off.

I ask about fees being added to mortgage because we only just have 5% deposit (5% of 90k = 4.5 i.e our savings!)

Regards
Ben

herbiesjp

Are you carrying out your own survey?

Make sure that any lender you go to will accept the re-type from the surveyors you are going to, as you will incur a survey from the lender otherwise.

I'm guessing from how you are talking that you have had an offer accpeted on the property, instructed a survey, instructed solictors but not got the mortgage arranged yet.

If this is the case, I would halt proceedings, and make sure you can get the mortgage agreed, as if you can't you will have run up these expenses.

On the face of what you are saying it should be fine, but many a client have had a surprise when applying for a mortgage thinking that it will go through easily.

BenM_3

herbiesjp wrote:

Are you carrying out your own survey?.

Yes survey has been completed.

herbiesjp wrote:

Make sure that any lender you go to will accept the re-type from the surveyors you are going to, as you will incur a survey from the lender otherwise.

Good point. Ill try to confrm this.

herbiesjp wrote:

I'm guessing from how you are talking that you have had an offer accpeted on the property, instructed a survey, instructed solictors but not got the mortgage arranged yet.

Exactly. Probably would have saved time if I had explained all that. Sorry!

herbiesjp wrote:

If this is the case, I would halt proceedings, and make sure you can get the mortgage agreed, as if you can't you will have run up these expenses.

Our next step is to get a mortgage in place. I have been told that there will be absolutely no problems in agreeing a mortgage since we are in a very good position financially. I would just like somebody elses opinion on which mortgage to go for.

Thanks for the helpfull comments!

Regards
Ben

Heth_2

We are going with Abbey because so far they are the only lender we have found that will consider my phd grant as a proper income. Have also looked at skipton but they wouldn't lend us enough (but they should be fine for you). The easiest you be to compare fixed rates (if fixed is what you want) for different lenders and go with the cheapest over 2 or 3 years. We are going for a fixed rate so we can budget better, and we know that over the 5 years of our fixed deal the payments won't go up. That was important for us as we are trying to take out a rather big mortgage (109 K, combined income of 33).

Also check if the interest rate depends on the deposit you are putting down, we are lucky to have a 25% deposit so are getting a better rate than 5%. Other lenders differentiate at 10%.

herbiesjp

Also remember that at 95% LTV - most lenders will charge a Higher Lending Charge