Just been offered RBS mortgage, any good?

bikeman17

Just need some advice really,

I went to apply for mortgage and have been given a conditional offer by a mortgage advisor. This is the deal

First time buyer.
House: £240k
Deposit: £70k
Mortgage required: £170k

The mortgage is with RBS and adviser has arranged a 2yr fixed interest only which monthly payment of £750ish.

Is this a good deal?

opinions4u

Term?

Rate?

bikeman17

Term? 35years
Rate? I am not 100% postive on the rate as I am first time buyer all info was going through one ear and coming out the next but i think its betwene 5-6%

What are your taughts?

opinions4u

1. It brings your rate in at around 5.3%. Not brilliant for a 71% LTV but there are worse available. Check out sites like www.moneyfacts.co.uk to see if you can beat it. Halifax appears to be cheaper, for example. Does your £750 include any insurances?

2. Why interest only? What's your plan to repay the debt? This is vital, because if you don't have one and rates rise how will you cope?

3. I would strongly suggest that you read all the paperwork that they've given you so far and work on understanding as much as possible.

I am first time buyer all info was going through one ear and coming out the next but i think its betwene 5-6%

I would suggest you find an independent mortgage broker who can take you through the process by spending a little more time explaining how things work to you.


Feel free to ask questions on here though - it's a good source of information and views from different perspectives.

bikeman17

Just checked my paperwork, interest is 4.9%.

Interest only is because live with my brother (and parents) and brother wil be graduating this summer and hopefully when he lands with a graduate position i intend to go to a repayment plan and reduce to 25years.

The 750 does not include any insurance - Is this home insurance you are refering to do u advice i take one out?

Just checked paperwork again - monthly payment is £582. Is this still good deal?

Kavanne

You'll need life insurance that covers AT LEAST the outstanding mortgage amount as well as home insurance (buildings and contents)

bikeman17

Kavanne wrote: »

You'll need life insurance that covers AT LEAST the outstanding mortgage amount as well as home insurance (buildings and contents)

What is the real benefit of of getting life insurance - what happens to the mortgage if i die? do the bank repossess the house?

After the 2year fixed period ends? what do i do - I am really clueless in this area. The advisor advised speak to RBS first and see what the market offers or contact him.

What would be your advice? what do i do after 2yrs later?

Kavanne

bikeman17 wrote: »

What is the real benefit of of getting life insurance - what happens to the mortgage if i die? do the bank repossess the house?

The real benefit is the mortgage can be paid off when you die and your next of kin don't have to sell your house to repay it?

bikeman17

ok any idea what are my options are after my 2yr fixed interest monhtly plan finishes.

VIGILANT22

bikeman17 If you're single with no dependants, your first priority when it somes to protection (insurance) is to protect your income, in the event of sickness, redundancy etc, this is more important to a single person than life insurance

If you took out a two year deal at the end of it you would look around for another competitive rate...with any lender

If you're arranging on interest only, how do you propose to pay back the capital you have borrowed...If you don't know the answer to this, it is the fault of the adviser who has not carried out an indepth discussion with you

bikeman17

VIGILANT22 wrote: »

bikeman17 If you're single with no dependants, your first priority when it somes to protection (insurance) is to protect your income, in the event of sickness, redundancy etc, this is more important to a single person than life insurance

If you took out a two year deal at the end of it you would look around for another competitive rate...with any lender

If you're arranging on interest only, how do you propose to pay back the capital you have borrowed...If you don't know the answer to this, it is the fault of the adviser who has not carried out an indepth discussion with you

As I have mentioned earlier I intend to pay back the money I burrowed. This will be achieved in many ways:
1. Looking to purchase then rent the property out.
2. Younger will be graduating this summer and when is in employment joint salary will be in excess of £40k - Then switch to repayment plan reduced to 25yrs
3. If plain 1 and 2 goes to plan then i can offord to make lump sum of repayments.

Does this sound good in terms of repayment plan?