90% Mortgage!!!

beefio

Does anyone have suggestions for 90% mortgages?

My partner and I have just had an offer of £290K accepted on a great property.

We now need to finalise a 90% mortgage, however Britannia have pulled all theirs and C&G have just put there 5year fix up by 0.2% to 6.29% after the BOE base rate was cut by 0.5%...

We're runnning out of sensible options!

Share to Buy/Britannia have a great deal at 4.54% but it's 'exclusively' for graduates...of which I'm not.

Your help would be very much appreciate!

Many thanks

Stuart

HousingBear

Hi Stuart,

I had to register to reply to this one as what you are about to do so concerned me.

Consider. You are not a graduate and you are about to borrow £260k to buy a house.

Have you worked out how long it is going to take you to pay off QUARTER OF A MILLION POUNDS?

Just about all the housing indexes have been showing falls for months now (except the Halifax which I suggest is a statistical blip). Falls are around the 2% level, so your deposit will be wiped out in six months. In a year you will be trapped in negative equity unless you are paying off the principal at a monstrous rate (remember that most of the replayments early on are of interest only).

Yes, the BoE base rate is very low at the moment, which would tend to indicate that it will go higher, not lower. And you are already experiencing issues getting a mortgage at a decent rate. What will happen in two years when you try to remortgage? Sorry, no equity in your house, onto the SVR you go. Until you have paid off QUARTER OF A MILLION POUNDS.

Please think about it. There will be other, even better houses along soon and probably a lot cheaper.

I mean, I am a graduate and I wouldn't dream of having that size of mortgage. Crazy!

p.s. I don't expect to be thanked by you or your SO for a few years.

Mike1999

Just about all the housing indexes have been showing falls for months now (except the Halifax which I suggest is a statistical blip).

This is true - whilst they announced that house prices went up in January by 1.9% this only counteracted the 1.6% drop in December. As a rule of thumb, you should use three month trends minimum and unfortunately they are still down.

pixiepie99

I agree. Hold off buying for at least a year or you're going to end up in negative equity.

And buy something cheaper unless you earn an awful lot of money and have guaranteed job security.

It's this kind of borrowing that got us all into this mess!

tcall

What has him not being a graduate got to do with anything

downhiller

HousingBear wrote: »

Hi Stuart,

I had to register to reply to this one as what you are about to do so concerned me.

Consider. You are not a graduate and you are about to borrow £260k to buy a house.

Have you worked out how long it is going to take you to pay off QUARTER OF A MILLION POUNDS?

Just about all the housing indexes have been showing falls for months now (except the Halifax which I suggest is a statistical blip). Falls are around the 2% level, so your deposit will be wiped out in six months. In a year you will be trapped in negative equity unless you are paying off the principal at a monstrous rate (remember that most of the replayments early on are of interest only).

Yes, the BoE base rate is very low at the moment, which would tend to indicate that it will go higher, not lower. And you are already experiencing issues getting a mortgage at a decent rate. What will happen in two years when you try to remortgage? Sorry, no equity in your house, onto the SVR you go. Until you have paid off QUARTER OF A MILLION POUNDS.

Please think about it. There will be other, even better houses along soon and probably a lot cheaper.

I mean, I am a graduate and I wouldn't dream of having that size of mortgage. Crazy!

p.s. I don't expect to be thanked by you or your SO for a few years.

You're presuming an awful lot.

Did he mention how much his household income was?

What if this is his dream house and he plans to stay there for the rest of his life therefore negative equity would have no impact in the short term?

What difference would being a "graduate" have on his ability to repay a mortgage?

HousingBear

tcall wrote: »

What has him not being a graduate got to do with anything

Statistical evidence of earning potential over a lifetime? I agree that many people can and do buck that trend, but the majority don't.

tcall

HousingBear wrote: »

Statistical evidence of earning potential over a lifetime? I agree that many people can and do buck that trend, but the majority don't.

Downhiller has said it all really. You know nothing about the individual's circumstances apart from the fact that he is not a graduate. Not really enough information to base such a sweeping statement on.

Sparkkee

tcall wrote: »

What has him not being a graduate got to do with anything

it stops him getting graduate mortgages - other than that, not a lot as far as I can see?

getting back to the op...

Aside from negative equity, house price crashes etc, to get a 90% mortgage on a property worth £290k, you're looking at needing a single income salary in excess of £65k, or you and your partner earning more than £80k per year between you. You may be pulling down that kind of money (which begs the question of how come you've only got a 10% deposit?)

You're also going to need spotless, squeaky clean credit records.

My advice would be to go and speak to at least one broker as soon as possible.

ILW

beefio wrote: »

We now need to finalise a 90% mortgage, however Britannia have pulled all theirs and C&G have just put there 5year fix up by 0.2% to 6.29% after the BOE base rate was cut by 0.5%...

That may look pretty good in a year or two. Base rates could go anywhere when the government start printing money.

downhiller

HousingBear wrote: »

Statistical evidence of earning potential over a lifetime? I agree that many people can and do buck that trend, but the majority don't.

The guy could be a self made millionaire

Heir to a fortune

A wife who earns a large salary

etc etc

Top tip: Don't be too quick to leap in and offer advice when you don't have any facts