Interest Only or Repayment??

Gareth83

kieran1979 wrote: »

"Prices are at rock bottom" - I wouldn't bet on it

they are the lowest they have been in a while, I need a house. Even the RICS have suggested in an article that if we are looking to stay for 2-3yrs it makes sense to buy as opposed to rent. By the way I work with surveyors etc. and they've all said now is a good time to pick up good deals

You've got 10-15% deposit so it's "all go" with the mortgage - I wouldn't bet on it

Well London and Country seem to think so with teh value of houses I'm looking at and my income and my deposit etc.

"as prices go back up I can make a bit of money over say 3-4yrs" - I wouldn't bet on it.

Well if I rent I'd end up paying £19,000 (525x36) all of which is dead money. I doubt I'd lose that much on a £100,000 house in that period

With a deposit of 10-15% you'll very likely be close to or in negative equity before you've even moved in.

Well purchasing fees aren't that great so it's not much negative equity and that is the price

I could go on...

You ask "So what is the better option?"

Stay where you are OR if you really can't, then rent somewhere until the market settles and save more for your deposit in the meantime.

I cannot live at my parents with a baby

Also, see a whole of market mortgage broker and get some realtic ideas of what mortgages are available to you with a small (for these times) deposit.

I have as mentioned, and now asking on these boards for advice on choosing repayment or interest only

Don't mean to be poo poo-ing your grand plan, but you need to face up to the issues you face and not get too carried away with the idea of buying/

This isn't something I've just thought of overnight but I need to either look at £120,000 houses with just getting interest only or £100,000 but with repayment

Gareth83

_Andy_ wrote: »

You're not going to find a lender at that LTV that's going to accept 'switch to repayment later on' as a suitable repayment vehicle.

I'm talking in say 2-3yrs when we remortgage

kieran1979

Gareth83 wrote: »

This isn't something I've just thought of overnight but I need to either look at £120,000 houses with just getting interest only or £100,000 but with repayment

Seems you've got it all sussed then.

Repayment for me everytime to answer your question.

Best of luck.

Gareth83

kieran1979 wrote: »

Seems you've got it all sussed then.

Repayment for me everytime to answer your question.

Best of luck.

I wouldn't say I have it sussed I do have a rough idea though

I'd always say repayment too but just thought if I could get a 'better' house while prices are 'low' then it could be a good idea

One last thing, should I go for a 25 or 30yr mortgage? not much difference in repayments ~£40pm

_Andy_

Gareth83 wrote: »

I'm talking in say 2-3yrs when we remortgage

The timescale isn't relevant and doesn't change the fact that at that LTV no lender will accept it as a repayment vehicle.
Nice to see L&C are doing such a sterling job as usual.

Gareth83

is that said in jest?

are L&C just trying to sell me something?? Where do you suggest for alternative advice?

Robert_Sterling_3

Get a repayment mortgage.

_Andy_

Gareth83 wrote: »

is that said in jest?

are L&C just trying to sell me something?? Where do you suggest for alternative advice?

Sorry - was being sarcastic about L&C - my point is that if you'd discussed interest only with them they should have pointed out your plan wasn't viable (nor is it good advice at all to have no repayment vehicle).