What are the big mortgage mistakes?

powerwin

An open question to the forum. What do you think are the biggest mistakes you can make when getting your first mortgage, and what are the common "gotchas" that you can fall for?

Thanks

_Andy_

Looking at the short term only ("I want the lowest payment"), 2 year fixeds, not thinking about the future (i.e. what if rates went up X percent).
Interest only no repayment vehicle (not likely to happen now though)
Not thinking about insurances.
(Purchasing a house) - not thinking about ongoing maintenance/decoration/renovation costs.

getmore4less

Agree with the above especialy the short term fixes.

1. Borrowing too much

2. Borrowing with someone else and not thinking through the exit statagies if things go wrong.

3. Borrowing too soon(I want a house now) when job moves are still on the cards.

4. Borrowing on shared equity without any way to increase the share(variation of 1. if you can't afford a full house why buy 1/2 a house)

wodgerdodger

Not checking out the property location sufficiently at different times of the day and week or the neighbours.

lightSwitch_3

Stay away from endowment mortgages. They are the biggest scam in mortgage land.

They will tell you that the stock market has consistently return 10% over the last 90 years and that this will likely continue. At the end of the 25 year period you are likely to be in the money by a few thousand from your cumulative payments. Don't believe this half truth.

First the Stock market has long periods where it is loosing money. If you are caught up in this period then you will be asked to contribute more to your mortgage in order to pay it off by the end of the term. You don't have to contribute more just pay up at the end.
I got caught up in this BS due to the stock market crash of 2000. Kept getting red letters from the bank wanting more money. I ignored them and sold the house for other reason. I wrote them a letter complaining that I was mis-sold by them, the ombudsman upheld my complaint and I received £12,000 in compensation.

What really made me angry and caused me to complain was that we had set the monthly payments higher so that it would need a much bigger drop in the stock market before they started sending letters. He then proceeded to show charts and explain that at the monthly rate we are paying the stock market needs to fall to very low levels to affect us and that wasn't likely to happen. Look at the chart he said with a big smile, it's been going up for 90 years. Well this bogus explanation is what got me the compensation!!

VIGILANT22

Not taking professional advice and thinking this forum will give you all the answers...also thinking you dont need insurance and taking advice from friends "oh you dont need that" and thinking the adviser is trying to rip you off with insurance...i wonder if those friends who"advise" against insurances would pay yr mortgage if you were made redundant! or was sick long term!

foxy-roxy

Getting a crap solicitor who really hasn't got your best interests at heart eg: does tons of applications to different lenders to see who accepts you and makes your credit score worse.:mad::mad::mad:

VIGILANT22

solicitoes do not or should not apply for mortgages....that is not their area of expertise

dimbo61

Buying a property is a long term commitment and you should do your research on both the property and your finances and lifestyle!
Dont take a 30/35 year term as you will have paid nothing off the debt in the first 2/3/4 years!
Dont borrow more than you can afford.
If you have a steady income think long term fix of 5 years ( if staying that long in property.
Get the right insurance and plan long term GOOD LUCK

foxy-roxy

VIGILANT22 wrote: »

solicitoes do not or should not apply for mortgages....that is not their area of expertise

Ooopppss, meant mortgage advisor, god he was awful.

VIGILANT22

hmmm...so much so you thought he was a solicitor.....rolls eyes