Advice welcome re mortgage

Blunty

I am currently renting for £475 pm and am considering buying. I have c£30,000 in savings, of which I would want to use c£25,000 towards a deposit and costs. I am saving at a rate of £200 per month.

I am debt free, with a net income of £20,540. As I will be 48 later this year, I don't want to take a mortgage out for longer than 10 years. I'm attracted to a fixed rate mortgage for a maximum of 3 x salary.

I have previously had debt problems (£23,000 built up following a divorce and negative equity - no mortgage arrears - and resolved via a debt management plan arranged through CCCS some 12 years ago, which resulted in the total amount being paid off in 5 years).

Will those previous difficulties make it hard for me to get a mortgage? What kind of rate would I be looking at for a 10 year fixed mortgage for c£55,000, and what would my monthly payments be?

Can anyone suggest the best lender(s) to approach?

Thanks in anticipation of any advice.

herbiesjp

You should be fine but make sure you get an up to date copy of your credit file - just in case there are still things showing on there that shouldn't be.

Would the purchase price be around £80k?

Met_Bobby

The monthly repayments on a £80,000 mortgage over 10 years would be £822 @ 4% and £950 @ 7%.This should give you the ballpark figures to consider.

Download your credit file from experian for around £14.00 (free if you cancel the subsription to credit expert) to see what a lender will see.

Go see a mortgage adviser and don't waste your time and money trying to find the best deal yourself. Unless of course you enjoy that type of research and take responsibility for the cost yourself. A whole of market mortgage broker should work on commission only for you. They will recieve around 3 to 4% of the loan as commission from the lender. They will also recieve commissions from any insurances arranged. They may need an additional fee of around £200-400 if you don't buy any insurances. This should be made clear at the first meeting and can't be applied retrospectively. However, the savings they will make for you should more than cover this cost. A fee based independent adviser should charge around £500 - £750 but must rebate any commissions back to you to offset any cost.

This is not money in their pocket as the business costs need to come out of this first. They will have net income of about 30% of the total commissions/fees.

As I said, it should save you time and money.

koexelek

Met_Bobby wrote: »

They will recieve around 3 to 4% of the loan as commission from the lender.

What planet are you living on ? :eek:

I think you meant 0.3 and 0.4 %

Met_Bobby

koexelek wrote: »

What planet are you living on ? :eek:

I think you meant 0.3 and 0.4 %

Sorry about the decimal point!:o

koexelek

Met_Bobby wrote: »

Sorry about the decimal point!:o

You got me excited for a moment there. If lenders were paying that sort of commission, I'd be quids in :rotfl:

Robert_Sterling_3

I thought that you were "biging up" Mortgage Advisors and making a bad job of it. :eek: :eek: :eek:

beecher

£900/month is a big chunk out of a £20,000 pay.

herbiesjp

Blunty wrote: »

I am currently renting for £475 pm and am considering buying. I have c£30,000 in savings, of which I would want to use c£25,000 towards a deposit and costs. I am saving at a rate of £200 per month.

I am debt free, with a net income of £20,540. As I will be 48 later this year, I don't want to take a mortgage out for longer than 10 years. I'm attracted to a fixed rate mortgage for a maximum of 3 x salary.

I have previously had debt problems (£23,000 built up following a divorce and negative equity - no mortgage arrears - and resolved via a debt management plan arranged through CCCS some 12 years ago, which resulted in the total amount being paid off in 5 years).

Will those previous difficulties make it hard for me to get a mortgage? What kind of rate would I be looking at for a 10 year fixed mortgage for c£55,000, and what would my monthly payments be?

Can anyone suggest the best lender(s) to approach?

Thanks in anticipation of any advice.

Lenders work from gross income - is that around £26,500?

You want amortgage of c. £55k as long as it is not more than 3 times your salary - well even based on the NET figures you gave you are inside that with most lenders

You want a 10 year fix on c.£55k ( as there has been no reply, I am guessing the £25k will take you to an £80k purchase price.

That will mean an LTV of just less than 70%.

An average 10 year fixed deal, over a 10 year term, will mean repayment around £590 pm

Blunty

herbiesjp and Met Bobby - thank you for the advice re the likely payments, and apologies for not making it clear that, yes, I am looking at a purchase price of £80k (a modest terrace house is all), with a mortgage of £55k.

I know a lot of people might think I'm being overcautious, but my previous experience of buying was during the last house price bubble when I took out a joint 100% endowment mortgage of £49k at 7% - easily affordable on our combined income of £60k at the time, but much less so when rates rose to 17%! When we divorced, and had to sell the house, we had about £10k of negative equity, which we had to split. As my job moved to part-time at the same time, it was a bit of a double whammy. That probably explains why I'd like as short a term for the mortgage as possible, with a fix that lets me know what my payments will be for the duration. No more nasty surprises!

I've got an appointment with a mortgage advisor at a building society on Saturday, and just wanted to get a feel for what was realistic. I will seriously consider looking for an independent advisor, however.

Thanks for all of your advice.

feisty1

Blunty wrote: »

herbiesjp and Met Bobby - thank you I've got an appointment with a mortgage advisor at a building society on Saturday, and just wanted to get a feel for what was realistic. I will seriously consider looking for an independent advisor, however. Thanks for all of your advice.

Honda Garage.. Honda Car

Building Society... Building Society Mortgage

Quote: I will seriously consider looking for an independent advisor
Good..........