Is my Estate Agents Mortgage Advisor correct? Please help!!!

wildcardsa

Dear All,

first post here, so please be gentle....

We have had our flat on sale for 6 months now and its a terrific flat, but we just battling to get viewings (only 7 in the last 6 months!!). We have lost about £20 000 on it since putting it on the market as we know an identical flat in our block went for this amount before the collapse and cant understand as its really competitively priced in a great little area.

We currently have a £78 000 mortgage, and £10 000 in savings. Once we sell, we will have no further equity from the sale as we are on the cusp of neg equity. Our next house we hope to purchase is about £180 - 190000. Our joint yearly income is approximately £55 000 with no credit card debts and only minimal car payments.

Our Estate agents Mortgage advisor has told us, that we carry the £78000 mortgage over to the next property and just need a second mortgage of £102000. He also stated that our depost of £10 000 will only count as 5% of the entire borrowed amount and not 10% of the second mortgage.

This obviously concerns us, as now we can only get a second mortgage at a 6.5 % rate!!

Is he right? and that we now only have a 5% deposit?
What would you experts out there do?

PS - he has made a few mistakes in the past with calculating stuff for us though, so kinda hoping this is a mistake.....

Thanks....
noooobeeee

alm721

Yes he is right its the amount of money you can put down against the total cost of the property. 10/180 x 100 = 5.6%. Sorry !

wymondham

wildcardsa wrote: »

PS - he has made a few mistakes in the past with calculating stuff for us though, so kinda hoping this is a mistake.....

That's not good ... maybe you should have a look around for a competent advisor as their mistakes could cost you money ?

Cashpig74

Hmm, if you know of mistakes in the past that he's made - DITCH HIM!

What you need is one of those "flexible" mortgage brokers who "knows people"..!

Seems everyone else has one up their sleeve somehow or other.. I mean, this one's advise has just lost you £5,000 of your deposit already.

dwsjarcmcd

One thing you need to be aware of is that it will be difficult to raise £180k mortgage on a joint income of £55k, which is over 3 x joint salary, less your car loans at 95%.

You also say you have no other savings. Does this include arrangements fees which may be payable, stamp duty, legal fees, removal fees etc. If not, then you need to re-think what is possible.

David

koexelek

Cashpig74 wrote: »

What you need is one of those "flexible" mortgage brokers who "knows people"..!

True. If you don't earn enough, they could just knock up some fake payslips and bank statements for you;)

Believe me, it still goes on in some places :eek:

Tiddler_2

Cashpig74 wrote: »

Hmm, if you know of mistakes in the past that he's made - DITCH HIM!

What you need is one of those "flexible" mortgage brokers who "knows people"..!

Seems everyone else has one up their sleeve somehow or other.. I mean, this one's advise has just lost you £5,000 of your deposit already.

Whilst I agree with the sentiment of if someone makes errors, then query it and if you are not happy - ditch them.

I'm interested to know how his/her error has lost the OP £5000 of their deposit.

The adviser is correct that your £10k deposit would be taken as a percentage of the price of the property, not the new mortgage.

The other point I would query is the "take your current mortgage to the new property and get a second mortgage for the £102k difference"

Who is your current mortgage with? Do they do 95% mortgages (very few of them around now)

wildcardsa

Hey all - thanks for the advice and comments.
I should maybe clarrify a few points:

Our current mortgage is with Nationwide and on the MA's computer they were offering 95% mortgages fixed at 2 and 3years, but with 6.5 % interest and arrangement fees around £995!! the interst rate difference between a 95% and 85% LTV mortgage was not amazing either.

As for the savings, we have £10000 stockpiled for the deposit and enough in reserve to cover solicitors(sell and buy), EA (selling), stamp duty, etc.

As for him making mistakes in the past its been little things like, calculating our deposits, and equity in the property etc and when we relook at it, we cant see how he has come to that figure, question him and he immedialtey realised his mistake and rectified it. I am a little dubious as he is linked to ourEA and thus prob can only offer part of the market and seelected mortgages.

Thanks...any furtehr advice?
dig hole and bury head perhaps?

Dan_1976

We have bad days as we are human, if he has not lost any money dont worry about it.

Your deposit is calculated on the value or purchase price (The lowest) so you need £18-£19k to get 10% deposit.

Either linked to EA or not 95% lending is going to come at a cost and be tricky to deal with.

Tiddler_2

OK - you are lucky as an existing Nationwide customers as they are one of the very few companies who will do a 95% mortgage (but only for existing mortgage customers).

They will also lend up to 4.1 x joint incomes