First time mortgage - 100%, tracker, fixed??

Zander3

My wife, son and I are looking to move back to Bedfordshire to be close to our family. We have considered buying a property, but have no savings as such. On looking at mortgages, I got dizzy and have started blurting out types during normal conversation, as the information has fried my brain. Any advice for first timers? Thankyou :money:

nervousftb_3

unfortunately, no savings = no mortgage. there is no such thing a as 100% mortgage at the moment, you need to have at least 10% of the house price saved for a deposit (15%, 20%, 25% would be even better) and then £2-3K for solicitors fees, moving costs, furniture etc. so save like mad, or rent.

MORPH3US

AFAIK there are no 100% mortgages at this time for FTB's......

Tracker or fixed...? Thats entirely up to you, its all horses for courses really... trackers are really only likely to go one way = up... might be soon, might not be.

Not too many low fixed rates about at the moment but if you want the security then might be worth going for still.

Your biggest problem is if you don't have a deposit.

Zander3

Thanks guys. But what are the differences between fixed and tracker?

Joe_Bloggs

Here is a link to the relevant section on the MoneyMadeClear section from the FSA.
J_B.

herbertthehelper

Zander3 wrote: »

My wife, son and I are looking to move back to Bedfordshire to be close to our family. We have considered buying a property, but have no savings as such. On looking at mortgages, I got dizzy and have started blurting out types during normal conversation, as the information has fried my brain. Any advice for first timers? Thankyou :money:

UNfortunately you wont be able to get one at the moment - simple

neas

fixed ties you in for a fixed term i.e a 5 year fixed means you will pay a set amount of interest over that period i.e

10% of 100k would mean per year you would pay them 10k for the mortgage
if you fixed for 5 year this would remain at 10% regardless of what happens in economy.

Trackers are usually BOE base rate +X% i.e BOE Base rate +4% would at the moment be a 4.25% mortgage. The problem with a tracker is it tracks BOE base rates... so if BOE raises interest rates to 10% your mortgage payments would also go up. Its a bit volatile whereas people go fixed because they know they can pay X amount of money for 5 years... whereas tracker could mean your payments half... or most likely these days that they will double if not triple.

Also agree that without a deposit you aint got a cat in ehlls chance. The question has to be asked of yourself, if you have been wanting to move and settle down why have you not been saving madly for last 3-4 years for a deposit? I.e put away 400-500 quid a month for savings. Without any money to your name you would be unwise to get a tracker mortgage as you appear to have no extra 'spare' income or currently dont due to lifestyle choices.

i'd recommend save like mad for 2 years while renting/living with family and then take the plunge.

Also heres a good thing to note...

The less you borrow the less you repay and less itnerst you get charged
The less you borrow the less risky youi are to a bank so you will get a lower interest rate (i.e for 95% mortgage you'd get offerd say 6% but if you only borrowed 80% of a house worth maybe you'd get 5.5%.. which means 50-100 quid less say per month)

Saving = good.