Advice welcome re mortgage

Blunty

Yes, feisty1 - looking back on the debacle that was my only other house-buying experience, it was the absence of independent financial advice that probably did for us.

New build house, two naive FTBers over-anxious to get a foot on the property ladder before prices got even more out of our reach, sucked in by the estate agent into a meeting with 'their' mortgage adviser. Large indemnity insurance and furnishings to pay for, advised to take out an endowment. Dispute with the house builder who installed the wrong kitchen and told us 'So what? You can pull out of the deal now if you like, as I can sell this house for £5k more tomorrow'. Within months of moving in, the price bubble had burst and not much long afterwards interest rates were heading upwards.

My heart goes out to anyone in a similar situation this time. Think I might cancel that BS meeting on Saturday, now!

herbiesjp

Blunty wrote: »

Think I might cancel that BS meeting on Saturday, now!

Exactly - they will only look at their product range for you.

A whole of market adviser will look at all different kinds of lenders to find you the best deal for your circumstances

Met_Bobby

Robert_Sterling wrote: »

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

Sorry, perhaps a PM would have been better

Blunty

herbiesjp wrote: »

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.

An update, as I applied for a copy of my credit file and have received the report today.
Thanks for the advice - I'm glad I followed it.

I appear to have a credit score of 951 - I have no idea whether this is enough to get me the small mortgage I'll be looking for. I was made redundant last year and had a couple of months on benefits until my redundancy payment came through. I had to agree a reduced payment against a loan I had at the time, until the redundancy arrived and I was able to pay it off. The report shows this as two months of arrears, but everything else seems ok.

Does anyone know whether a score of 951 and a 5 star rating will be enough, or will those two months of low payments jeopardise my chances?

herbiesjp

You should be fine

You might want to discuss with an adviser first, so that they can run it past the lender and see what they think.

dimbo61

I would go and see a whole of market mortgage broker and he/she would know what that means and who might lend to you and what sort of rate you could get for the 10 year fix you are after.
I agree with you that taking a long term fix is a good idea with a few high street lenders offering about 4.99% at the moment.
GOOD LUCK

stuarthouse

Hi

I know it is wonderful to own our own home & not move from place to place ...

Heres something

most peeps do move house, country , from time to time ... depending on job location, economic climate, circumstance, being fed up with a place etc


with all the fees of buying a house, paying redemption to mortgage company to get out of contract (shylock springs to mind)
+ we are also prey to the vaguries of the market & interest rates



Could find a house to rent long term, say 5 years.
This way you have stability, NO debt ... a mortage is a DEBT .. which if unpaid you loose house or have to sell



If you do want to get a property
First Direct with its 2.89 offset no redemption.
Get interest only, put the difference from the repayment into the offset every motnh,
this will build up your savings, reduce your interest payment on the mortgage
and in 5 years you will have a nice saving to reduce your mortgage by.

if you had a repayment mortagage for 5 years you'd only be paying off the interest on the whole loan for at tleast the first 5 years,
so your mortage would be the same as when you started.

By using my suggestion, i believe you will clear a fair amount of your mortage in 5 yrs.


There are mortgage brokers & others here who i hope will pick apart my idea, because it would be useful to know if my suggestion is fine or not

Blunty

Thanks for your latest replies, herbiesjp and dimbo61 - very re-assuring.

Stuarthouse, that's an interesting proposition. I don't fully understand offset mortgages, but I guess that on a £55,000 mortgage I would make 60 payments of £132.45 (interest only) and would pay the balance of the £590 otherwise needed if I had a repayment mortgage - ie £457.55 - into the First Direct Account, accumulating £27453. (I've used the BBC mortgage calculator for these figures). That would leave a balance of £27,547 still to pay over the remaining 5 years of the mortgage. What would be the affect of the interest accumulating on the FD account - any idea?

I know we can't really know what will happen to interest rates, but my worry is that in 5 years rates may be much higher. To get a mortgage on my £27,547 might then cost me much more. *If* rates rose to 8%, for example, and I was able to continue the interest only mortgage, my payments will rise to £366.66, leaving me c£224 a month of my £590 to pay into the offset account. Over the remaining 5 years, I would accumulate £13,440 - leaving me with approx £14,000 still to pay at the end of the 10 years mortgage.

Am I missing something in these calculations?