Advice on what to do - 2

typeractive

Hi guys - apologies if you have read this in the house buying section - I didn't quite know the best place and someone hinted that I could try here.

Looking for advice and opinions – sorry it’s a long post and I REALLY do appreciate you reading it!

Before Christmas I spotted a house for sale that looked like a good bargain, sadly I just missed out on it. Anyway I spotted that the house was back up for sale, so I called the EA and indeed the sale has fell through. However there has been another offer placed (which infuriates me as I asked to be specifically informed if this place came for sale again and I’m on their mailing list etc). Viewings are closed at the moment and the EA needs to speak to the owner (some sort of part ex style company) to see if they will open up viewings. I will find out on Monday.

Now, I explained to the EA my interest, and my current position, which I could hear her typing down. She said though an offer has been made it’s not necessarily the highest offer they will accept but the quickest or strongest position. I’m in a strong position:

Some details:
House: £75000
My saves: £35000
Position: FTB
Salary: £22000

I don’t have a mortgage approval lined up, and whilst I’m pretty confident I will be able to access enough money, I am worried about how fast I have to move and ‘learn’ about mortgages in a short space of time. Where do I get the best deals etc etc. I have read Martin’s guide on whole market lenders and stuff though this was a wee while ago now and everything has changed (market conditions, and my conditions (for the better)). Fixed or variable? Etc etc

So, I will have a look around on here for some tips on getting a mortgage / trying to get the best deal!! Though I would also like some opinions on what you guys think I should do in terms of my finances. Having never owned a house (live with folks) I would need to buy a load of stuff / decorate /furnishings etc. I know I will gather some stuff from our attic and my sis’s house – could even take my own bed! heh I am wondering how much I should put down on a deposit – what would you guys think? Whilst putting the whole lot down would be super for a low mortgage payment, I don’t know if I could live without having a bunch of savings as contingency. I was thinking put down £25k and try to keep £10k in the bank (isa). Being a bloke I’m typically frightened with commitment so I would like the opportunity in a mortgage to switch to renting the property if I decide I want to move out / work abroad etc.

If I can get the payment down low, I think I would like to try and pay it off quicker (idealist I know). I’m filled with hope and excitement as I have been looking ever since seeing this house pop up for sale, and I haven’t seen anything as good within that price.

What would you do if you had the same scenario? How much deposit would you put down? What type of mortgage would you look for?

As I state all help is gratefully received.

Cheers

benjo

Some thoughts from someone in a similar situation to you. (Im not an advisor)

Invest some time reading this forum, the house buying guide and the questions/responses posted here, there are some awesome people who willingly share their experience and advice - but this shouldnt take the place totally of face to face advice from.....

A whole of market mortgage type person - preferably fee free, find a good one and cherish him/her.

Check out the mortgage comparison sites, there are some offers only available directly with the lender and there are also some offers only available directly through an intermediary.

Check out your credit file - it tells you on this forum how you can do it for free, better to check it now to ensure you have time to correct any mistakes that may be there. Make sure you are on the electoral register, small mistakes like your name not being there will have a major impact on an application.

Re: deposit. The lower Loan to Value you have, the better the rate will be, the best rates seem to be (looking at the comparison sites) 60% ltv which will mean a deposit of 30k. 65% ltv = 26250k. 70% ltv = 22500k. 75% ltv = 18750. The more deposit you make now, the less chance of negative equity in a falling housing market = less problems getting another deal in 2-5 years time, but you need to have money in reserve for.....

Other Fees:

you will need legal fees (I got quotes from £475 - £750).

There is often a fee attached to the mortgage (595 -999 from what I have read) this is sometimes added to the term of the mortgage sometimes you have to pay up front.

Valuation fee - depending on the type of survey (250 - 600 are the quotes I got).

Mortgage advisors fees if they are not fee free (dont know the cost). Removal fees (??).

Insurances, buildings, contents, payment protection, often paid monthly by direct debit (??).

Extra cash for surprises (??), money may be held back by the lender until certain works are done (roofing jobs, damp proof course etc - you will only know this after the valuation).

Money for sticky buns and lemonade (housewarming party).:beer:

In terms of how fast things move, well from reading posts here it seems to vary alot. My own story is offer made on house accepted on the 11th March, I didnt have an AIP, mortgage application made via an IFA on Friday 13th March :eek: , mortgage agreement in my hand on 20th March - pretty quick I think.

Get all your paperwork sorted out now (if anything is missing you can get onto the job of getting replacements immediately), anything that might possibly be asked for, photo driving license, passport, birth certificate, utility bill (if you live with your parents you may need other proof of address), p60, pay slips, bank statements for the last 3 months etc, ensure your deposit is ready to move.

Goodluck, it is an exciting time for you!

typeractive

benjo wrote: »

Some thoughts from someone in a similar situation to you. (Im not an advisor)

Invest some time reading this forum, the house buying guide and the questions/responses posted here, there are some awesome people who willingly share their experience and advice - but this shouldnt take the place totally of face to face advice from.....

Check! I do LOVE this site. Such a great place for help and avenues to pursue.

A whole of market mortgage type person - preferably fee free, find a good one and cherish him/her.

This is what I want, though how do I know if they're actually 'good' I know that sounds ridiculous, but I've never dealt with all this before.

Check out the mortgage comparison sites, there are some offers only available directly with the lender and there are also some offers only available directly through an intermediary.

Check out your credit file - it tells you on this forum how you can do it for free, better to check it now to ensure you have time to correct any mistakes that may be there. Make sure you are on the electoral register, small mistakes like your name not being there will have a major impact on an application.

Right - will do!

Re: deposit. The lower Loan to Value you have, the better the rate will be, the best rates seem to be (looking at the comparison sites) 60% ltv which will mean a deposit of 30k. 65% ltv = 26250k. 70% ltv = 22500k. 75% ltv = 18750. The more deposit you make now, the less chance of negative equity in a falling housing market = less problems getting another deal in 2-5 years time, but you need to have money in reserve for.....

Ok, that's why I want somethign I can 'manage' in terms of finances and make changes when necessary. Hopefully this property (should I be successful at all) would be a 'safe' buy as it's a pretty good deal and I couldn't see the house prices dropping that much on it (touch wood).

Other Fees:

you will need legal fees (I got quotes from £475 - £750).

There is often a fee attached to the mortgage (595 -999 from what I have read) this is sometimes added to the term of the mortgage sometimes you have to pay up front.

Valuation fee - depending on the type of survey (250 - 600 are the quotes I got).

Mortgage advisors fees if they are not fee free (dont know the cost). Removal fees (??).

Insurances, buildings, contents, payment protection, often paid monthly by direct debit (??).

Extra cash for surprises (??), money may be held back by the lender until certain works are done (roofing jobs, damp proof course etc - you will only know this after the valuation).

Money for sticky buns and lemonade (housewarming party).:beer:

Yeah, it all sounds depressing that bit (apart from the sticky buns!! )

In terms of how fast things move, well from reading posts here it seems to vary alot. My own story is offer made on house accepted on the 11th March, I didnt have an AIP, mortgage application made via an IFA on Friday 13th March :eek: , mortgage agreement in my hand on 20th March - pretty quick I think.

AIP? Is that a form that basically evidences that you can afford to put your money where your mouth is so to speak when making an offer? That does sound like a very fast movement.

Get all your paperwork sorted out now (if anything is missing you can get onto the job of getting replacements immediately), anything that might possibly be asked for, photo driving license, passport, birth certificate, utility bill (if you live with your parents you may need other proof of address), p60, pay slips, bank statements for the last 3 months etc, ensure your deposit is ready to move.

Right. I think I'll be best making a folder dedicated to everything I need. Getting copies together etc etc.

Goodluck, it is an exciting time for you!

Once more thanks again, very informative and helpful post. With regards to your quotes on the fees and all the rest (as they do vary) where did you shop for those prices and did each place offer the same information / level of service. Or for example did you get 'more for your money' so to speak when paying a higher fee for a surveyor?

Cheers! :beer:

benjo

AIP = agreement in principal, I 'think' this is an agreement made assuming all you have told them is correct ie wages, debts etc and assuming the valuation comes back ok, an agreement that is made before a full application and credit checks are made.

Whole of Market Mortgage type person - I was advised here to look for someone via word of mouth if at all possible, people who have had good dealings. I didnt think I knew anyone who would be able to point me in the right directin, but got chatting to a university tutor who mentioned someone, 2 other people I knew also said they had used him. Otherwise I think the FSA website allows you to search for people who are registered - but Im not to sure how you judge between them.

Fees on valuations vary because the type of valuation varies, mortgage valuation being done by the lender, for their own purposes is the cheapest, home buyers survey - next cheapest and is what most people go for - then there is a full structural survey - most expensive and most detailed, it will tell you the state of everything down to the door handles and wall paper.

Removals - standard of service was very variable from 'oh would you mind shifting your own plants/garden furniture our van might not be big enough' to 'here is our registration details, we insure each lorry for 25k contents, dont worry about packing its all part of the service' and the difference in prices was £320 - £490.

Looked for prices via yellow pages/internet - used local firms since I prefer to be able to knock on someones door if Im not happy with them.

theoretica

Some thoughts:
With a relatively small mortgage (which is what yours will be) the costs of (re)mortgaging (solicitor, closure fees, valuation fees, reservation fees etc) will outway a slight reduction in interest rate and are worth looking at very closely.

Friends have not had trouble asking permission to rent out flats they had purchased and lived in as their main home (and then moved in with partner or away for work). This is totally different from the much pricier buy to let.

dimbo61

One of the best long term deals on the market is the A&L 3.99% FEE FREE
5 years fixed repayment deal.
If you put down £30,000 as LTV max 65% then you would have a mortgage of £45,000
If you could afford the mortgage over 5 years it would cost £828,54 a month ! Total repaid £49,712
If that was to much then over 10 years it works out at £455.40 a month for the first 5 years.Total repaid would be £54,650 ( if the rate stayed the same)
This gives you security for 5 years at a very good mortgage rate.

typeractive

Quick update.

Spoke to the EA today. They said that the company selling the property will allow people to view the property, however they will not accept any more offers! How bizarre is that? Basically the original sale fell through though someone else had put in an offer. I have to wait a few weeks to know if it's still a goer or not. Quite annoyed as I did say way back when I first spotted the house to keep me specifically in mind. I am now first on the 'new' reserved list.

I still booked a viewing, as at least then I would know if it's really the one and I could get stuff setup in place. Could be more painful, but we'll see!

(I'll have to double post this with my other thread being on the other board)

Cheers

typeractive

theoretica wrote: »

Some thoughts:
With a relatively small mortgage (which is what yours will be) the costs of (re)mortgaging (solicitor, closure fees, valuation fees, reservation fees etc) will outway a slight reduction in interest rate and are worth looking at very closely.

Friends have not had trouble asking permission to rent out flats they had purchased and lived in as their main home (and then moved in with partner or away for work). This is totally different from the much pricier buy to let.

Sorry theoretica, I don't fully understand your post. It will be me being a bit thick!

theoretica

Every time you take out or change a mortgage there are fixed costs- if the mortgage is small these make a bigger percentage difference so you may not want to plan on switching mortgage every couple of years, but thinking a bit longer term. I had great difficulty getting my somewhat innumerate mortgage 'adviser' to see this. A low fee or good long term conditions may be enough to make the deal better for you than one with the very lowest interest rate if you look at the total cost over more than the first year or two with or without changes.

typeractive

Ah right! That makes a bit more sense to me now. Thanks very much