First time buyer

liamg1987_2

Hi everyone

Me and my girlfriend are looking at buying our first house over the next 2 months, We're both 22 and have 10k saved.

We have met with an individual mortgage broker who had us a mortgage deal with halifax agreed in principal, its a tracker rate at 4.1%.

As were very young I've been trying to garner all the advice I can and Ive been told this is pretty high and to risk a variable mortgage.
I spoke with the broker and he said variable mortgages are dangerous and NEVER get one.

We have seen a house and the agent wants us to see their in house mortgage advisor. If we do will it affect our credit score and potentially jeopardize the agreement we have with Halifax?

Thanks for any advice guys
Liam

Conrad

liamg1987 wrote: »

mortgage broker who had us a mortgage deal with halifax agreed in principal, its a tracker rate at 4.1%.


I spoke with the broker and he said variable mortgages are dangerous and NEVER get one.

Liam

Huh?

You say your broker arranged a tracker, and then say they said this was dangerous, huh??


As a general comment a fixed rate of course is safer. If you are prepared to pay the higher rate to fix then so be it, but there is never a 'right way to go' as everyone has a different set of risks, different emmergency provision (for example help from parents if rates go up_ etc

Cannon_Fodder

Clarify the Tracker rate, please. i.e. total of 4.1% (3.6%+BoE), or 4.1%+BoE = 4.6% in total.

Either way, Trackers are "variable". When the Bank of England rate goes up the Tracker will follow. If it gets back to the historical average of around 5%, your mortgage rate will be approaching 9%.


Personally I would never speak to an EA's mortgage advisor. They are just wanting to sell you something that isn't as good as you can get elsewhere.

happyrichard

Completely agree with some of the advice here.

I would be careful when taking advice from anyone, let alone the EAs mortgage advisor. If you are comfortable with a variable rate, go for it. However, when my wife and I first bought we were only too happy to fix and know for sure what was leaving the account every month. Then you can start to budget all other housing costs- heating, water, insurance etc etc. If you fix for a little while, when you come to remortgage you will know what is good for you and whether some flexibility could work. For instance, we moved on to a tracker for a couple of years and that worked, but we knew that we could have coped with increasing rates for a little while.

Do your maths and know your limit. Get truly independent advice and do your own research.

Then when you have signed and own your own place, you can celebrate and panic all at the same time- home owning is a bumpy ride!

liamg1987_2

Thanks for the responses everybody, No my friends said it was a risky option, Its agreed in principal so far so can I still change specific terms of the mortgage?

VIGILANT22

Ask your friends/family/colleagues to refer you to a whole of market mortgage adviser they have used and have been happy with....

Conrad

You may change the terms as long as the lender has other schemes to offer.

herbiesjp

Can you afford the mortgage if Bank of England rates went back up to say 5%?

How tight is your budget?

If you cannot afford rate rises, then the better option is to look at fixed rates. They may be more expensive now, but they are indeed safer as they allow you to budget and not worry about rates rises too much while you are fixed.

It means that if they do rise, you will not find yourself in a position where the mortgage payments eat into your disposable income and you find your self struggling to pay the mortgage.

Which option do you do like? You should really have had this discussion with your adviser.

liamg1987_2

Hi everybody, our AIP is as follows

The mortgage is based on borrowing £72,250 plus £1,244 for fees over 35 years.
Its a repayment mortgage and the property price is £85,000.

The loan amount is a variable rate which is %4.14 above the BOE base rate.

Our total amount we must pay back is £129,941.

Could you please give your feedback on this agreement? To me the payback is ridiculous as its ≈%40 but im unsure if this is a typical amount to pay back?

We'd much prefer to take a fixed rate after what I've learnt from this site in the past day or so, we also wouldnt mind paying 'x' extra in order for us to have peace of mind. We dont plan on staying in the property 5+ years.

Excuse our naivity we're just trying to find out as much as we can! thanks

jenny_13

When you spoke to your mortgage advisor did he discuss what fixed rates were avaliable to you? I'm on a fixed rate because I like the security of paying a set amount for the next 3 years.

As people have mentioned will you be able to cope if interest rates increase?

The amount you pay back sounds about right as it's over 35 years, our deal is over 15 and I think we'd pay back an extra £20k.

liamg1987_2

Not really he was quite vague, He was from the Mortgage advice bureau and we met him at Edwards Grounds. If we plan on selling within 5 years (we only get penalized for ending the mortgage early during the first 3 years) should we choose a shorter payment period because theoretically if we sold within 4 years and made say 5k profit, wed be left with 50k debts wouldnt we?