Is 7.29% fixed fair for a 90% effective 1st time buyer?

Rheumatoid

I have a mate who is recently divorced. has found a house at 175k and has 17.5k to put down. He earns around 50k. A financial advisor has told him that a 7.29% 2 or 5 fixed is the best he can get on a 90% loan. This means he has to pay around £1100 a month back and cash is a little tight at the moment. I've not been in the market for years but given current interest rates this seems well steep. Is it reasonable? If not where should he be looking? Even if the monthly payments in the early years could be reduced that would be helpful.

Thanks

R.

_Andy_

No idea as we don't know the ins and outs of his sutuation. If money is a 'little tight' is it at all a good idea for him to be purchasing?

Rheumatoid

he could afford it but would prefer to reduce it. surely it is possible to comment on whether the interst rase on the fixed offers put forward are reasonable

Muhasib

RBS have 5.99% fixed for 5 years for FTB's or 2 year (not exclusive to FTB) at 6.59% at 90% LTV,( I don't have either product so i'm not endorsing them) but 7.29% can be beaten from a high street lender

Mrs_Bumble

If he has had a mortgage previously then probably won't qualify for a first time buyer scheme and would need to check eligibility.

There isn't much available out there at 90% LTV and so the rates quotes above look about what I would expect and RBS is worth a look as well.

My overall opinion from what you have said though is that if money is going to be a bit tight he would be better off saving a larger deposit, then not borrowing as much and making things easier on himself. Either that or look at cheaper property.

Rheumatoid

Mrs_Bumble wrote: »

If he has had a mortgage previously then probably won't qualify for a first time buyer scheme and would need to check eligibility.

There isn't much available out there at 90% LTV and so the rates quotes above look about what I would expect and RBS is worth a look as well.

My overall opinion from what you have said though is that if money is going to be a bit tight he would be better off saving a larger deposit, then not borrowing as much and making things easier on himself. Either that or look at cheaper property.

Thanks, interesting he may not qualify even though to all intents and purposes he is now a first time buyer again!

homehunter

90% deals are pretty poor at the moment, but I'd say over 7% is very steep. We've been back and forth to our mortgage adviser during the last couple of years we've been watching the market/actively looking to buy, and each time he 'sees' fewer and fewer good deals. In the end we went to Natwest ourselves as that's where we found the best deal at 80%. Simply put, with the crunch, lenders don't want to have to pay commission to brokers, so brokers won't see their deals. (That's what I was told anyway )

Gorgeous_George

That rate seems high and I'd wait.

As for being a FTBer - there's a clue in the name (although I believe some lenders allow you to be a virgin more than once - after a period of abstention).

GG

chambta

Mrs_Bumble wrote: »

If he has had a mortgage previously then probably won't qualify for a first time buyer scheme and would need to check eligibility.

There isn't much available out there at 90% LTV and so the rates quotes above look about what I would expect and RBS is worth a look as well.

My overall opinion from what you have said though is that if money is going to be a bit tight he would be better off saving a larger deposit, then not borrowing as much and making things easier on himself. Either that or look at cheaper property.

With the RBS one as long as there is no current mortgage to show as outstanding on the credit file there is no reason why he shouldn't get the 5.99% deal. I know as I've done a few of them for customers!

ben_Mortgage_consultant

As a non FTB I can tell you that he would not qualify for the RBS / Natwest deal if he has had a mortgage in last 7 yrs (they check using Experian credit file.) Natwest Direct are offering a 6.59% 5yr fix with a £799 fee for non FTBS and with his salary should easily fit their affordability calculator (assuming not excessive unsecured debts) Another lender worth looking at is HSBC direct who have a 5.99% fix for 2yrs at 90% LTV booking fee £599. One point to note with hsbc however is their processing time is amongst the slowest (8 weeks plus for a mortgage offer) due to their best buy rates. Also the fee is non refundable and payable upfront (can't add to loan)

I am a CeMap Qualified Mortgage Consultant and will answer and questions you may have. Hope this has helped.

dfh

Have a look at Britannia Building Society.They are offering rates of around 6 percent for a 90 percent loan to value.