FTB - HSBC Graduate Mortgage - Landlord In Administration - PLEASE HELP!!

chrishill16

Hello, can anybody help my partner and I with the following?...

We've been renting our new build flat for 6 months now. Our landlord (Oakdene Homes) have gone into administration and have dropped the prices of their properties 3 times since we moved in.

Our particular flat was initially valued at £210k, then £175k and now they're asking £150k. We're very tempted to make an offer at around the 100-110k mark but due to a lack of savings our only option would be to go for the HSBC graduate mortgage @ 95%.

We're currently paying £800 p/m in rent and switching to this mortgage fixed @ 6.98% would bring our payments down to £713-£785 p/m.

Supposing our offer of £110k was accepted, is it a big risk to take out a 95% mortgage, bearing in mind we'd be purchasing the property for almost half the original asking price?

I wouldn't expect the property to fall below £110k in value (2 bed ground floor flat with garden on the Kent/Surrey border) anytime soon, so we'd be reducing our monthly payments and benefitting from the capital appreciation (I think!)

Any input/advice from fellow moneysavers would be greatly appreciated as we think it's potentially a great chance to get on the property ladder, but we're just not sure.

Many thanks in advance.

Kavanne

Does the 95% offer with HSBC apply to new builds? it may not so that might be the end of that unless you can find the money for an extra deposit? Our parents were able to help us, have you had a chat with yours?

Somerset

chrishill16 wrote: »

We're currently paying £800 p/m in rent and switching to this mortgage fixed @ 6.98% would bring our payments down to £713-£785 p/m.
.

What about the service charge ?

chrishill16

Kavanne wrote: »

Does the 95% offer with HSBC apply to new builds? it may not so that might be the end of that unless you can find the money for an extra deposit?

Not sure if it does, but sounds like you think it might not! Will check this out next week.

chrishill16

Somerset wrote: »

What about the service charge ?

We don't pay a service charge, but if we did I'd be asking for it back as they've been pretty useless! :rotfl:

Kavanne

If you owned it instead of rented then you would have to pay the service charge, I think that is what somerset is getting at

clutton_2

all flats have a service charge and then tend to be quite high on newbuilds

zzzLazyDaisy

Also, do factor in the fact that interest rates (probably) wont stay this low forever. Will you be able to cope with the repayments if interest rates rise by, say, 2% or more?

socrates

Why not approach the LL's current lender and try to do a deal with them - it may kill two birds with one stone.

They organise the mortgage for you as well as avoiding all the expenses involved in repossessing and selling on open market

chrishill16

Great responses from everyone, thanks very much.

I'll enquire about the service charge whenever I manage to get hold of the LLs!

Re the increase in interest rates: the graduate mortgage is fixed at nearly 7% for 2-3 years, after that it reverts to whatever HSBC's current rate is, which I think is between 3.5 and 4% for a tracker. Doesn't that mean that we'll actually be paying less (After the fixed period), unless the rates increase by 3-4%? Or are you saying that we'd struggle to get a decent tracker rate after coming out of a 7% fixed rate?

Re asking the LL's creditors for a mortgage: I'm not sure how I'd go about that. Do you think I could just call them up and ask if they're willing to do that? And who would I call, the LL or their creditors?

Many thanks again to all of you!:money: