My first mortgage

daleuk_3

[FONT=&quot]I’m buying a house with the intention refurbing and reselling a few years down the line.. up to 5yrs.

The purchase price is £80k, I have a deposit of £10k.
Annual earnings are £25k. No outgoings.

Iv done a search on Money Supermarket with a term of 25yrs. Cheapest over 5yrs that returns is:[/FONT]

[FONT=&quot]NatWest Purchase[/FONT]
[FONT=&quot]£23,213.64 [/FONT]
[FONT=&quot]4.69% [/FONT]
[FONT=&quot]then [/FONT]
[FONT=&quot]4.00%[/FONT]
[FONT=&quot]£396.67 [/FONT]
[FONT=&quot]Tracker [/FONT]
[FONT=&quot]29/02/2012 [/FONT]
[FONT=&quot]Term[/FONT]
[FONT=&quot]4.2% [/FONT]
[FONT=&quot]

So its going to cost me an additional £23k for the bank to lend me this money for 5 yrs only? £112k for the 25 year term...?

This seems extraordinary high?[/FONT]

g_attrill

Is that 4.69% fixed for 5 years? That doesn't sound too bad. The £23k is the total repayments over 5 years, interest and capital and doing £400x12x5 comes out about right.

If possible try and find another £2k to get to 85% LTV, the rates are much better.

daleuk_3

I have been looking at repayment mortgages. My intention is to sell in 3-5 yrs time. So I would be looking for a product with no early repayment charges?

Or should I be looking at interest only?

However if I do not move on.. and settle in my current location, im afraid of picking the wrong product now and being tied in. Is it just a matter of switching mortgages?

I am able to deposit £12k if that gets me a better rate.

daleuk_3

80k purchase price
12k deposit
85% LTV
Term 25yrs

This is the best deal I can find:

[FONT=&quot]C&G (Direct) Purchase[/FONT]
2 Year Tracker

[FONT=&quot]5Yrs - £21,009.45 [/FONT]
[FONT=&quot]4.49% [/FONT]
[FONT=&quot]then [/FONT]
[FONT=&quot]2.50%[/FONT]
[FONT=&quot]£383.11 Tracker 31/01/2012 [/FONT]
[FONT=&quot]APR 2.9%[/FONT]
25yrs - £96,422.25
Application fee - £99
Product fee - £995

Early Repayment Charge 3% of outstanding loan before 31/01/2011, 2% of outstanding loan next year
- No repayment charges after 31/01/2012.



Is this a good deal? or are the product fees particulary high? Given my outlook summarised above, is this a wise option? I know I need to see a mortgage advisor but it would be good to use all your wealth of knowledge too :-)

beecher2

So that's 3.99% over the base rate? You need to weigh up whether you think base rates will return to norm before 2012. If they were back to the rate they were at only 2 years ago, you'd be paying 9.74%.

daleuk_3

beecher2 wrote: »

So that's 3.99% over the base rate? You need to weigh up whether you think base rates will return to norm before 2012. If they were back to the rate they were at only 2 years ago, you'd be paying 9.74%.

Yes that it correct and yes thats a concern. For the next year I do not see the base rate rising.. but right through to 2012, im not sure.

So if they did rise.. I would just have to pay? As this product ties me in until 2012?

When I get to 2012, is it a matter or looking again for the best deal and switching? does it cost to do this? or do people do it every few years?

Thanks all!

dimbo61

Is this your first property ?
Are you prepared to and trained to do the work to " do up" a property?
Do you have the funds to refurb a property and live in a building site for 6/12 months?
You are unlikely to get an Interest only mortgage in the current mortgage market! even with a 15% deposit.

daleuk_3

dimbo61 wrote: »

Is this your first property ?
Are you prepared to and trained to do the work to " do up" a property?
Do you have the funds to refurb a property and live in a building site for 6/12 months?
You are unlikely to get an Interest only mortgage in the current mortgage market! even with a 15% deposit.

I am prepared to.. I dont have all the skills. But I have the time and will power to do that sort of thing. Iv lived in student accomodation for a long time so I can handle it lol.

No tradional repayment mortgage is fine.

Also looking at this product:

(£75k purchase, £15k deposit)

[FONT=&quot]HSBC Special Fee Free[/FONT]
[FONT=&quot]5yrs - £18,640.56 [/FONT]
[FONT=&quot]3.59% [/FONT]
[FONT=&quot]then [/FONT]
[FONT=&quot]3.94%[/FONT]
[FONT=&quot]£303.28 Discount 2 Years [/FONT]
[FONT=&quot]Term[/FONT]
[FONT=&quot]3.9%
25yrs - [/FONT]£93,986.16

There are no early repayment charges after the 2 years.

My next question is regards to switching mortgages.. the above deal is handy for the first 2 years.. but afterwards its probably not the best. I see that most lenders do not charge fees to switch mortgage.. is this correct?