is this a good deal

shellnapier

i have read those 2 deals. but its not exactly like that
i think the key is low-cost home for low income scheme
prority given to council house tenants
savings details are needed - no more than 6k savings

thats some of the points the coucnil told me

now i dont know alot but i know most people need more thn 6k for a deposit
5% of the 140k would be 7k

also the key is

the coucil are trying to help people who wowuld not normally be able to go get a mortagage and buy a house in the property ladder
so if am right if i had a house worth say 100k and a deposit of 10k i could get a mortgage of 90klike any 1 else?

i was so happy we i came home from bank today now im worried n confused

Robert_Sterling_3

shellnapier wrote: »

Value - 140k
borrowing 90k
65 %

65% of equtiy would be £91,000 rather than £90,000.

Cannon_Fodder

When you come to move/sell, you will have to give back the other 35%.

Ok, your 65% should release some equity for a deposit, but you will then have to pay the next mortgage on the full 100%, not having the 35% contribution from Govt/council.

Making your next house pretty much unaffordable.

These schemes are simply storing up trouble, rather than genuinely helping the affordability issue.

I personally view them as the future equivalent to recent Endowment and Pension mis-selling scandals.

You are only 21(?), then be patient, get yourself up the career ladder a bit, bank some pay rises, save a deposit, and then buy 100%, instead of defering the pain until the time you might be mid-family etc.

shellnapier

yes ok i said 65%m is acutly something like 64.7 % but i jsut said 65% do give you teh idea
yes but if we had this house, whos to say we couldnt not asve for depoit ov our next house, and whos to say we would want to sell...
no body really knows what will happen in teh future
i am doing what i thinks best just now for me n ym family
and i was asking if the morgage deal was good

Cannon_Fodder

shellnapier wrote: »

i would have thought the banks would know what they are doing

Missed out on the last two years of The News at Ten ? Not noticed banks collapsing, being bailed-out, taking BILLIONS from the taxpayers? - precisely because Banks often do not know what they are doing.

You have to do your own research. Banks do not offer products with good advice attached. They are simply trying to sell you something.


What will be the difference, i.e. the amount you can save, between what you currently pay in rent and what this will require for the mortgage?

If there is little difference, how do you plan to save?

Running your own house is more expensive than renting, as the Landlord has to pay for many things, that you as a home-owner will need to pay for yourself.

Have you been over to the Mortgage Free Wannabee forum to check how people budget to afford their mortgages?

"Is the mortgage deal good?" - No.

shellnapier

ok no becuase i could get a better deal on the same morgage sumwhere else , or no beucase you dont think i should be buying at all

Cannon_Fodder

Just reviewed some of your other posts - you rent for £250, save around £400?

With that low rent, which is something I envy you for, in two years you would have £10k saved. By then 95% mortgages will probably be back, so say £7k towards deposit, remainder kept for "emergencies" should you, if you then bought a house, hit a financial obstacle.

"No" - because needing to have someone else temporarily give you 35% of the asking price, so that you can afford the monthly payments, is not sustainable.

£480(?bad memory) monthly, becomes £720 with a modest 50% increase in interest rates. Rates have recently halved, so could double, easily. = £960 a month...affordable?

And then 35% of that on top, when you want to take on more of the equity...

= Around £1,300 a month...

Don't just believe me...do your own maths using;
http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

And note, when you do, that £90k, at 4.1% over 40 years should be £383 or so - so that means they are stinging you for £100 a month for bits and pieces of insurance that you could shop around for and get at approx half that cost.

shellnapier

Cannon_Fodder wrote: »

Just reviewed some of your other posts - you rent for £250, save around £400?

With that low rent, which is something I envy you for, in two years you would have £10k saved. By then 95% mortgages will probably be back, so say £7k towards deposit, remainder kept for "emergencies" should you, if you then bought a house, hit a financial obstacle. - yes thats right, but the 10k (never had it as a lump) we have saved lately has been used to get me debt free

"No" - because needing to have someone else temporarily give you 35% of the asking price, so that you can afford the monthly payments, is not sustainable. we dont need them to give us the 35% itsnot like we have went looking for a house n came accorss this, this has came to us - a low cost home opertunity for people in concil homes who can afford a mortgage

£480(?bad memory) monthly, becomes £720 with a modest 50% increase in interest rates. Rates have recently halved, so could double, easily. = £960 a month...affordable? its 380 a month yes and the bank did go over the ifs and buts with us , as there are ifs and buts with everything, when my parents build a house there interest was 12% for a start - no one knows what will happen

And then 35% of that on top, when you want to take on more of the equity... buying the rest is never an optionb these home are low cost and always will stay low cost

= Around £1,300 a month...

Don't just believe me...do your own maths using;
http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

And note, when you do, that £90k, at 4.1% over 40 years should be £383 or so - so that means they are stinging you for £100 a month for bits and pieces of insurance that you could shop around for and get at approx half that cost.and yes this part i shall have to consider, thats y i asked if this was a good deal - for all this, how much would you be on your own for house insurance buldings and contents, life and sickness cover and mortgage insurnace

im appriccating all these replys

shellnapier

so does every1 think so one should buy low cost homes, we should all save for deposits, and you cannot do that, rent for the rest of your life?

the rent we have paid for the last 3 years, is almost like why we are gettn the 35% deposit

Cannon_Fodder

Still not having the name of the scheme makes this a difficult conversation.

You called it "Local Authority Shared Equity scheme". They would not have called it that, unless it was "Shared Equity" - i.e. you own some, and they own some.

If they just wanted to GIVE you 35% of the property, they would call it a Discount under Right to Buy, or something similar.

So, its 35% that they continue to own, until you identify the name of the scheme and we can check the small print to confirm otherwise.

DO NOT take the WORD of any Bank employee - get EVERYTHING in WRITING, and triple-check the small print. Not just of the mortgage, but of the LA scheme, too.

While I agree that no-one KNOWS what will happen to Interest Rates, a large chunk of economic opinion is leaning towards there being a high-inflation reaction to all this money being pumped into various banks and bail-outs...this WILL lead to higher Interest Rates. You should budget for 8% mortgage rate, minimum.

If rates never get that high, great you have some spare cash to build up savings, if they do, then maybe the money helps avoid losing the house.

"buying the rest is never an option these home are low cost and always will stay low cost"

I would love to be wrong, and I'm sure others would love to hear of a scheme like this, if it is true.

Please provide scheme name/local authority details.