Tempted FTB....

woody252506

Hi all!

Me and my gf have been saving bloody hard for well over a year now. We now have a 10% deposit and have been to C&G and can get a fixed rate mortgage for 2 years at a rate of 5.69%

We have seen a very nice 3 bed semi in a nice little village which we like. The same type of property 6 doors down is up for £130k. However the one we have seen, which is immaculate and has plenty of interior pics on the internet, is now reduced to £99k!!! The owners are desperate to get out and we are viewing on Saturday for the first time.

We obviously need to see it yet but on what we have seen so far it looks exactly like what we want. If we were to offer whats realistic to start at given its in a nice area and that a similar house in that area is on for £130k?

90k??????

Thanks

hethmar

Sounds great for you. Well, they have reduced it a lot already so there may be a fair bit of interest - you have to decide what you feel its worth to you. have you looked on the land registry to see what the price for the house was in the past?

Mini_Bear

Your interest rate is now looking high with todays 0.5% drop. Can you see if your bank will reduce your fixed interest rate, or perhaps go elsewhere?

hethmar

Mini, you may find that with only 10% deposit, that is a very fair fixed rate.

woody252506

Thanks for your replies!

Hethmar - thats one thing I have not done, ill google now and see what information I can find out!

Mini Bear - We have not applied or gone through the mortgage process. I went to see them on Saturday to gauge what, if anything we could get. He did say todays Interest Rate decision could mean a better deal next week. We have booked to see him a week on Saturday so fingers crossed they will have an even better deal then!

moneysavinmonkey

Remember to figure in arrangement fees into your mortgage cost,
as you're fixed rate is only over 2 years you will need to rearrange finance shortly and that means paying arrangement fees again :-(

If you can get a longer fix it would probably save your money in the long term although I appreciate there aren't many 90% mortgages available...

Your a braver man than me, if house prices continue to fall at the current rate you will be in negative equity in 2 years time. Make sure you have a cushion of cash saved up to deal with this.

Conrad

Woody I've been tooing and froing about buying something and have put some offers in. Nothing accepted yet as I've been offering very low lately.

Negative equity is of course a concern but for some people penny pinching to the enth degree is less important compared with buying a comfortable home that is affordable and reasonable.

It's all guess work from here on in, but my gut feel is the really extreme bearish posters will wait until the market has turned in thier zeal to hold out for the last penny, by which time sellers will not be so desperate as it is inevitable those braver / more foolhardy types will have beat them to it by 'going early'.

You know the really ironic thing about the uber FTB bears is once they themselves become owners, you bet your last penny they will one day sell and expect the buyer to pay top dollar. Tis the nature of them. Ive know these types through my work, they will squander a house sale for the sake of a few hundred pounds just to maintain some vague notion of pride in thier brain chemistry.

hethmar

Well, to be fair it looks like he is getting a house perhaps 30% below market price, so if he does his homework right he will be buffered to some extent.

moneysavinmonkey

Conrad wrote: »

Negative equity is of course a concern but for some people penny pinching to the enth degree is less important compared with buying a comfortable home that is affordable and reasonable.

Not sure what negative equity has to do with penny pinching. My concern would be more to do with being able to get any remortgage deal in 2yrs time and also not being able to sell or rent out the place if personal circumstances changed (need to move for job, family etc)

Having a comfortable home that is affordable is great. Ensuring that it will continue to be comfortable and affordable at the end of a 2 year fix is paramount. Some spare cash put aside in case is just good financial planning.

Now what does this talk of uber bears and brain chemistry has to do with anything?

moneysavinmonkey

Conrad wrote: »

It's all guess work from here on in, but my gut feel is the really extreme bearish posters will wait until the market has turned in thier zeal to hold out for the last penny, by which time sellers will not be so desperate as it is inevitable those braver / more foolhardy types will have beat them to it by 'going early'.

ooh right, I've just seen your sig that you are a mortgage advisor! :eek:
so that would explain why you are encouraging people to 'go for it' and don't plan for the risks + are being hostile towards a FTB who is holding onto their pennies for now!!