FTB - Looking for mortgage at 90% LTV

buyahousein2010

Hi All,

My gf and I have been saving to buy our first house together. Recently a the perfect house for us became available - we have had two viewings and put an offer in for 240k.

We have a Mortgage Advisor who is a friend of the family on my gf's side. We requested him to find us a mortgage and he has come back with only a couple of options for 90% LTV, both with Newcastle BS.

He informed me today that there is not much out there at all for 90% LTV and he has advised us to go for a 85% LTV - the trouble is that is 12k more that we don't have currently!!

Financial Situation
We have saved 25k.
We have a combined income of 73 k/yr

Debts
4,400k personal loan (16 months remaining at 320 per month)
GF pays 200k a month car loan

We both have very good credit ratings so we can't understand why he has only come back with two options for us? I thought the 90% LTV market was becoming more competitive in terms of mortgages available?

Any

There is more deals out there at 90% LTV then two.
Who do you bank with?

Is your income regular income, no bonuses or unguaranteed overtime involved?

Nationwide (for sure) and NatWest (I think) both also have 90% LTV mortgages, but only for current account holders.

However if I can give you an advice - whatever you do, don't go with HSBC. I am having real nightmare with them. They are bunch of incompetent half wits.

TrickyDicky

I get the feeling he's not an all of market broker.

But, looking at your savings, I dont think you can afford 240k if all you have is 25k. You have to pay for solicitors, survey and moving fees, which will probably come to >£1000. Then if the mortgage valuation comes in at < £240k you'll be scuppered unless you can renegotiate the price.

Id save more. That should be quite easy with a 73k/year salary. you could probably have that 12k within a year!

TrickyDicky

Any wrote: »

However if I can give you an advice - whatever you do, don't go with HSBC. I am having real nightmare with them. They are bunch of incompetent half wits.

Really? ours went through with HSBC without a hitch.

Fairdo_2

Abbey are another one that have reasonably competitive deals at 90% LTV. (Relatively speaking!).
I would also say it would be ideal to save up enough for a 15% deposit, but it is not always practical to do that.
If you have found the perfect house, then you may be prepared to pay more a month to get it sorted now instead, so that is your choice!
There are some deals that are helping with some of the previous posters stated costs, but you could do with seeing someone who has some more choices available for you.
However, the reason you may have been given the limited choices is potentially as s/he has done the homework and is offering you recommendations. So ask them if they have narrowed it down for a reason and what other choices there were.

luckyfool

TrickyDicky wrote: »

I get the feeling he's not an all of market broker.

But, looking at your savings, I dont think you can afford 240k if all you have is 25k. You have to pay for solicitors, survey and moving fees, which will probably come to >£1000. Then if the mortgage valuation comes in at < £240k you'll be scuppered unless you can renegotiate the price.

Id save more. That should be quite easy with a 73k/year salary. you could probably have that 12k within a year!

Realistically how likely is it that the property is downvalued on a purchase? In my experience it is pretty rare.

On a £240k purchase [STRIKE]£10k for costs[/STRIKE] seems eminently sensible, especially if they are both first time buyers and exempt from stamp duty.

Whats up with my maths today... of course there is £1k for costs built in there which definitely on the low side. However if they are exempt from stamp duty as Any says, they should be able to cover survey fees and incidentals from income.

Any

TrickyDicky wrote: »

I get the feeling he's not an all of market broker.

But, looking at your savings, I dont think you can afford 240k if all you have is 25k. You have to pay for solicitors, survey and moving fees, which will probably come to >£1000. Then if the mortgage valuation comes in at < £240k you'll be scuppered unless you can renegotiate the price.

Id save more. That should be quite easy with a 73k/year salary. you could probably have that 12k within a year!

I wouldn't worry about that. Who says they need to pay moving fees (friend with van will do) and the lawyer will unlikely come much more then £1000 and if it will then I doubt they will have problem to pay it on the spot from £73k combine salary.

TrickyDicky wrote: »

Really? ours went through with HSBC without a hitch.

Well, obviously you were lucky. Unfortunately I wasn't and judging from what I read on internet reviews I am not the only one.

buyahousein2010

Thanks for the responses thus far!!

It's more a case of it's the perfect house right now. We have managed to put an offer in before it's come on the market. It belongs to friends of friends and was about to be marketed. Had three valuations ranging from 240k - 250k.

My gf would never forgive me if we lost this one, I think she is in love!! ;-)

You are correct, we would have finances for 15% probably in 6 months but we want to buy our house now, so we could move on with our lives and look to get married.

We can borrow 2-3k from parents for fees and have all white good furniture etc from our time renting.

We can afford it, I just want to make sure we get the best deal - Natest or HSBC both have some okay offers available for 90% FTBs.

suisidevw

3 valuations by estate agents? It'll be a completely different kettle of fish with a surveyor if that's the case..........

As said, 85% will help you out but if not, and it's the one you want you'll have to go with 90%. Assume you've done all the searches on compared, moneysupermarket etc?

optimus_prime_2

My girlfriend and I are in a very similar situation - she has also seen the home of her dreams valued @ £240k.

Currently we are trying to decide between a fix and a tracker 90% LTV. The fix is with Halifax: 6.39% for existing customers, 3 years, £495 fee, and £250 exit fee. Plus we can get £150 by opening an Ultimate Reward Account and £750 towards council tax if we apply by 7 May.

Tracker is a lifetime one from HSBC at base + 3.99%, currently 4.49%, £499 fee, no exit fee and no early repayment charge so you have the option to bail if the base starts to rise.

luckyfool

Bare in mind with the tracker that your future options to remortgage could be restricted or non-existent depending on your changing loan to value and changes in the mortgage market. If 2 years from now base rate is 4%, and house prices have fallen 10% then you will find yourself paying 7.99% variable, with a loan to value of around 99% and in all likelihood unable to move your mortgage to anyone else or even fix it with HSBC.

At that kind of ltv I would personally be looking to either fix with a lender with a much lower reversionary rate or fix for a longer time such as 4 to 5 years or more.