Help please

coggy_2

Hi all

We had a meeting today with a mortgage adviser at the Alliance and Leicester. They said that we don't need a deposit because we get 32% discount on the property from from the council so we would only need say a 75% mortgage ;D

They could offer me a £38,000 mortgage just on my wage and not using my wifes benefit and because im a Ltd company and pay myself a wage im not classed as self employed and can just give wage slips as proof ;D

I think £38,000 will be plenty because of the discount we get from our council house it might even be less than this which we need and are waiting to get our house valued less the work ive done already

My question really is are the Alliance and Leicester=ester mortgages any good and does anyone have any experience with this bank?

Or should we try another one if so which one?

Thanks all

Coggy

Joe_Bloggs

@Coggy it sound like you had better buy the place incase the landlord does not approve of your work.
What rate of interest did they offer you ? For what period of time? Is there a fee for changing to another lender ?
It sounds as if your A&L advisor can't lose whatever the advice regarding the self employed status. Consider yourself Chairman and Chief Executive Officer. You can hire yourself and fire yourself hence you are not self employed.
J_B.

cath-w

Coggy,

We were in a similar problem as few years ago. Luckily we could produce 3 years of accounts for the bank to check. However, at the time we had to get a specialised mortgage through a specialised company as noone would give a mortgage to us at the time. Even our bank with whom we have had a business and personal account for over 12 years. Luckily the market has changed a lot now and more lenders are open to lend to contract, self-employed workers.

Try a few other mortgage places and see if they will loan you money for the house. If not you can always go with your current bank, even if it is not the most favourable deal and then wait a while and swap the mortgage at a later date to another company. As soon as you have a mortgage it is easier to get another one.

Good luck,
C.

coggy_2

Thanks all this forum is great ;D

Right then im really not clued up on all the mortgage jargon so please bear with me and i will try and post the offer we was given:

Quotation £30,000 over 25 years
2 year fixed rate 5.99%
Freesaver loan of £30,000 over 25 years based on current interest rate of 5.99% (APR 7%)

At the end of the introductory period we will charge interest at the variable rate which applies to this product currently 6.59%

Total monthly payment £275.77

Monthly repayment amount for mortgage £195.38

Mortgage payment protection cover for £275.77 = £16.35 (Which would be a little less if we don't have the critical illness cover)

Home cover extra monthly = £31.17

Mortgage term assurance * critical illness cover for me and my wife = £32.87

Fees
Chaps fee = £30.00
Valuation fee £220.00 but refunded.
£250 given towards legal fees.

These are the terms we was given but we don't think we need the critical illness cover for me and my wife which is £32.87 per month so without that it would bring the monthly payments down to:

Monthly amount without critical accident insurance =£242.90

Any opinions really welcome

Thanks in advance
Mr and Mrs Coggy

PS
We also got a quote for a variable 2 year 1.40% discount loan but we think we would like a fixed rate so we know where we stand.

Cheers
Coggy

coggy_2

Please anyone what do you think of the figures ???

Pal

Is there an early repayment clause? If so, how long does it last. You do not want a 2 year fixed rate if there is a lock in clause that lasts 4 years.

The mortgage experts will no doubt get back to you shortly.

jackdog

I don`t know much about the mortgage quotes etc... but my husband works and I am on DLA and servere disablement, Northern Rock took my benefits into account, have you tried a quote from them, my mortgage is fixed for 7 years for £52,000 over 20 years and I pay £346 a month.

lisyloo

Do you really need a fixed rate?

If so, then I would say that you could probably do better by shopping around.
Alliance & Leicester also charge annual interest on some of their mortgages so it is worth checking whether it is annual or daily interest.

My feeling is you could do better, either by shopping around yourself or by using a broker (get one that doesn't charge you fees).

Mortgage_Master

Hi Coggy,

I sorry don't mean to put dampers on, but I'm really surprised by what the A&L adviser has told you.

Section 6 of their application asks:

1. If employed for less than 12 months please give details of your previous employment.

2. Are you a company director owning 10% or more of the company's ordinary share capital? (this means you'll be treated as self-employed)

From your original post, unfortunately, you'll have a big problem with 2 above. I would be very surprised if they allow the mortgage.

Simon

DiggingOut

It's not a great rate, but IF you can get it (seems doubtful based on what Simon says) I would be inclined to take it in your circumstances, because I don't know how many lenders will look at you at all.

When the 2-year fixed rate ends, you can remortgage to something more competitive, if you've established a good work track record.