FTB...Advice wanted!

febop

I'd try a mortgage broker just to check if theres anything cheaper as we got our just before dec and it was far and away the best with 10% deposit!you looking at an investment or a home?i did what pandamonia suggested and i found it really helpful with houses we were interested in

longtimelurker_2

pandamonia wrote: »

i dont think you understand the danger of taking out 95% mortgage with almost no deposit. You will be in negative equity for a long time if prices continue to slip.

those morgage payments are nearly £900 per month! Even after 5 years you will owe over £116300 still. if houses fall then you might not be able to get another mortgage or move home. the bank can also demand extra money from you to cover NE.

So in five years you pay only £11,700 off the capital (without overpayments, of course)??

We can save 6 times that in five years! Blimey! Definitely continuing to save in the mean time!

maisymoo77

I was under the impression that entering into a fixed rate mortgage was not a gamble as long as you can afford the repayments (bare with me...I obviously have a lot to learn!) We are looking for a home for the next 10 years. We have looked at prices on similar houses in the area and this seems reasonable in comparison.

poppy10_2

maisymoo77 wrote: »

I was under the impression that entering into a fixed rate mortgage was not a gamble as long as you can afford the repayments

What happens if one of you loses your job? Or if you fall pregnant and stop working? Could you still afford the repayments then?

What if you split up two years down the line (yes, it's not nice to think of that, but it is increasingly common) - you will be in negative equity and unable to sell, leaving you trapped.

Seriously, a 95% mortgage is crazy in today's market, especially at that rate. Wait a year and you will be able to buy much cheaper.

pinkshoes

maisymoo77 wrote: »

I was under the impression that entering into a fixed rate mortgage was not a gamble as long as you can afford the repayments (bare with me...I obviously have a lot to learn!) We are looking for a home for the next 10 years. We have looked at prices on similar houses in the area and this seems reasonable in comparison.

If your house drops in price more than you've paid off, then you will be left in negative equity, meaning you couldn't sell (unless you took a loan out), and it will be difficult to get a fixed mortgage deal, so you'd have to pay the going interest rate (which has gone up to 15% in the past...).

£7k is nothing. You'll need £1500 for the solicitors fees and searches, then money for moving. You should also have contingency savings for if something goes wrong i.e. boiler blows up, leak in roof...

Also note that what they offer you can be withdrawn, and unless that £128k mortgage offer is 3x your joint salaries (so you earn £42k between you), then they might turn round later and say no.

Also, the interest rate is shocking! You need to SAVE SAVE SAVE and wait until you've got at least a 10% deposit, and enough money for all the moving costs.

pandamonia

maisymoo77 wrote: »

I was under the impression that entering into a fixed rate mortgage was not a gamble as long as you can afford the repayments (bare with me...I obviously have a lot to learn!) We are looking for a home for the next 10 years. We have looked at prices on similar houses in the area and this seems reasonable in comparison.

its not a gamble if you have a 5% fixed for 5 years and 10-20% deposit.

£900 per month is expensive mortgage.

maisymoo77

Thanks pink shoes. We have £2000 for fees and we are currently earning £43k between us. I also think the interest rate is high but am worried that if we don't bite the bullet now, then interest rates could be sky high in 12 months time? Would this be likely to happen?

ess0two

maisymoo77 wrote: »

Thanks pink shoes. We have £2000 for fees and we are currently earning £43k between us. I also think the interest rate is high but am worried that if we don't bite the bullet now, then interest rates could be sky high in 12 months time? Would this be likely to happen?

Its a big decision,if your happy go for it,i would'nt let views on an internet forum sway me either way.
Do your sums,weigh up the options.

pandamonia

maisymoo77 wrote: »

Thanks pink shoes. We have £2000 for fees and we are currently earning £43k between us. I also think the interest rate is high but am worried that if we don't bite the bullet now, then interest rates could be sky high in 12 months time? Would this be likely to happen?

your interest is already sky high so it doesnt matter.

there is no rush to buy a house right now.

You will pay 41k in interest and only 11k in capital in the first 5 years!!!

you should save up more money for a lesser mortgage lower interest rate.

longtimelurker_2

Talk about a coincidence...

I've just opened up today's post and in there is a letter from HSBC trying to pimp out a graduate mortgage to me for up to £200,000!