First time buyer's guide...?

AndrewSmith

ukmonkey wrote:

Waiting until the debts are paid off REALLY isn't an option we'd like to take, as we'd be talking at least another 2 and a half years, but more realisticly 3 years.

As I said before, no-one knows you , like you do. You may decide that this type of mortgage is fine for you, that's your perogative and a decision that I respect as yours.

Just remember that you are likely to then be in a situation of 'negative equity' technically until either you have repaid the unsecured element by overpayments, or property prices have increased sufficiently to cover it.

It all depends on how long you want to stay in the place for really.

Andy

ukmonkey

Andy, we'd be probably looking to stay there AT LEAST ten years.

AndrewSmith

ukmonkey wrote:

Andy, we'd be probably looking to stay there AT LEAST ten years.

Whether you do decide to take the 125% loan is entirely up to you. Please don't think that I am just being objectional or difficult, quite the contrary.

I would just hate to see someone go into a potentially challenging situation without having understood all the negatives first.

You must do what is right for you, as I said earlier, I have clients who have taken these with me, not without having all other possibilities explored first though.

Hope this helps, and hope you have found this thread as a whole helpful.

Andy

lynzpower

ukmonkey wrote:

Waiting until the debts are paid off REALLY isn't an option we'd like to take, as we'd be talking at least another 2 and a half years, but more realisticly 3 years.

Have you ran your SOA past us on the Debt free wannabee board. Ive shaved 3 years off my debt free date, and aim to be cleared by the end of the year. You are much more likely to be able to sort yourself out of debt while you have such small overheads. It seems mental to consider spending an extra 8k on servicing your debts if you are struggling as much as you say you are

However, of course it is your decision, but this being a moneysaving forum, my advice is, if you want to save 8k, then dont tie it into your mortgage.

ukmonkey

@lynzpower - Thnks, I will bear that in mind.

@Andy-thingy-ma-bob - I know you're not trying to be difficult, and I think I kinda understand the potential pitfalls.

jonnydoe

Good luck uk monkey! I didn't get a mortage until I was 28 (which is young nowadays) Keep saving up whilst at your parents! You'll get there in the end..

Cheers

JD

clutton_2

"consolidation" of debts - just means getting into more debt as far as i can see - it may FEEL as if you are reducing payments, but, actually, you are probably increasing the repayment-term and doubling if not tripling the amount you pay back over the long term. Consolidation in my view is a short term "apparent" gain for a long term increase in total debt. I would pay off all other debts before taking on a mortgage, and i would NEVER get more than 90% mortgage - If you buy a 100%/125% product what will you do if mortgage rates go up, if one of you loses his/her job, if you need to do an expensive repair to the house ? I am not wanting to sound too negative here, but, repossessions are increasing month on month. Please do a feasibility spreadsheet before you sign on the dotted line. This is the biggest financial risk you will ever take. Very best wishes

AndrewSmith

clutton wrote:

"consolidation" of debts - just means getting into more debt as far as i can see - it may FEEL as if you are reducing payments, but, actually, you are probably increasing the repayment-term and doubling if not tripling the amount you pay back over the long term. Consolidation in my view is a short term "apparent" gain for a long term increase in total debt. I would pay off all other debts before taking on a mortgage, and i would NEVER get more than 90% mortgage - If you buy a 100%/125% product what will you do if mortgage rates go up, if one of you loses his/her job, if you need to do an expensive repair to the house ? I am not wanting to sound too negative here, but, repossessions are increasing month on month. Please do a feasibility spreadsheet before you sign on the dotted line. This is the biggest financial risk you will ever take. Very best wishes

I don't think you are being negative at all. I call it being grounded and reasoning.

The main issue I personally have with these products is not so much the 'now' but more a case of what happens at the end of the incentive period when, with a large unsecured debt tagged to the mortgage, it is potentially going to be difficult to change lenders to a better rate.

Andy

AndrewSmith

ukmonkey wrote:

@lynzpower - Thnks, I will bear that in mind.

@Andy-thingy-ma-bob - I know you're not trying to be difficult, and I think I kinda understand the potential pitfalls.

No worries Monkey :beer:

ukmonkey

*BUMP*

Any news on the guide yet MSE Martin ?