Mortgage info please

Legacy_user

Sorry, needed to remove this.

StuTheDon

Hi,

Generally you need at least a 10% mortgage nowadays to get a mortgage, so you need £18 as a deposit. There are some mortgages where you only need 5% deposit but the interest you pay will be higher.

As a rule, the larger the deposit the better the deal you can get.

I think you all need to get an independant broker to look for a good deal. Your daughter may need to apply for a buy to let mortgage as, on the face of it, she will be the landlord and you the tenants. Buy to Let mortgages need a higher deposit - typically 25% of the purchase price.

Other factors to consider are - what is your daughter and son in laws income and do they have a mortgage now on their house?

benjo

If you daughter is looking to buy a property of 180k she will indeed need to pay a deposit, the bigger deposit she pays the less risk there is for the mortgage lender - in the event that she stops paying her mortgage, they can resposes, sell and get their money back.

So basically more deposit = lower risk = better/lower interest rates your daughter will pay = lower monthly payments/less overall interest paid.

If your daughter is buying this house to rent out, then she will have to get a 'buy to let' mortgage, they tend to require a larger deposit than residential (own home) mortgages and the interest charged also tends to be higher than you would pay for the mortgage on your own home - since lenders consider them to be riskier.

The very most lenders will lend now is 95%, so you would need a 9k deposit - but this rate is very rare and wouldnt apply to a buy to let mortgage, so realistically you could ignore this.

You will probably need around 25%, so you would need around 45k as a deposit and you would be borrowing 135k.

135k at 6% over 25 years is £880 per month,
and at 7% £965
8% £1053
9% £1145
10% £1239
11% £1335
if rates rose to 12% your payment would rise to £1400 per month (approx).

System

They are both in the military and as such, have a military property. This proposed investment is for their long-term future.