What are the big mortgage mistakes?

molerat

Maxing yourself out at historically low interest rates (anybody remember 15%+)

dimbo61

Hi Danny
Just read you post and it makes me a little nervous!
1 new build ( at least its not a flat)
2 20% loan off the builder ( at least its interest free) but its got to be paid back within 10 years
3 2 year fix ( why not longer?)
4 only 5% deposit saved !!!
5 you have this bond ( worth £6500) next year and plan to put away £3600 a year in ISA,s but do you have any emergency savings ?
6 build up 3/6 months of income in ISA,s asap
Good Luck in your new home

dannymccann

Hi Dimbo

I have made plenty of budget plans regarding this

My bond was a 5 year fixer, couldnt touch it even if I wanted to. I did it when I was 18 and my dad's inheritance money came to me from when he died. In a year this will become our emergency fund / or could be used to be put towards the loan / overpay the mortgage.

As I said, we earn 2k net a month, with 1.5k going on ALL the bills (this includes the minimum monthly amount we need to put towards paying off the loan and 10% on top of the worst case scenario bills to cover), so we have £500 disposable every month to spend and save, of which we plan to save at least £400 of it. These bills sound high but that because we pay towards the car (fuel, mot, servicing costs, insurance, tax, maintenance costs etc all have a set amount put aside for them a month rather than 'hoping for the best' when it comes to the time and spending silly bulk amounts)

On the deposit front, we have only been saving properly for about half a year and we had a Christmas splurge which wont be happening again!

If I didnt think it was doable then I wouldnt of done it, Im part trained as an accountant so have had it drilled into me to think prudently

Jonbvn

dannymccann wrote: »

We are 30.5k gross (2k net a month) earners. We have a 5% deposit for our newbuild £138k house, the housebuilder puts up 20% of the deposit as an interest free loan to us which needs repaying in 10 years.

I'm quite surprised that your lender accepted this. This type of almost "gifted" deposits are generally no longer accepted by most lenders.

VIGILANT22

This will be a Head Start/Easystart scheme or similar......

tiff

molerat wrote: »

Maxing yourself out at historically low interest rates (anybody remember 15%+)

Yes, DH almost had his house repossessed in the late 80's due to this and his ex leaving. Hence why we now have a mortgage fixed at 4.89% for 15 years and totally flexible with overpayments.