Advice for FTB please... my story :-)

mummyfrugal

Hi Alex. My best advice would be to find an independant financial advisor not tied in to any financial institutions. You pay a flat fee for their advice and they try and source you the best deal they can get.

Our first mortgage was one of those investment ones that was absolutely useless and we turned to a financial advisor, who for a half an hour appointment and less than 50 quid fee (was a long time ago we are talking here) she found us the best mortgage deal on the market and sorted us out changed us to 'repayment' and we paid off loads in overpayments over the years.

Its well worth the time and money as you can save thousands of pounds and know you are getting unbiased advice. Also they could probably help you sort out the card debt too.

All the best of luck in your buying, dont worry too much, you dont have too if you find good advice in the first place!!

Bullfighter

in a stable public sector job

I don't want to p*ss on your parade, but are you really confident that your job is safe from the 40% cuts that are coming in central government and LA's...

Of course no job/career is 100% safe, however with the austerity years ahead are going to be tough for a bloated public sector - I would be very careful about committing to massive long term debt.

The bulls on here will tell you that you simply can't lose investing in property, and that prices will go up despite falling employment and diminishing credit - my personal belief is that we are facing unprecedented hard times, that asset values will drop (especially those purchased with debt) and cash will be king.

Good luck.

Batchy

I am a FTB I am getting an 85% deal and over the next 2 years improving the property instead of buying a 80-75% LTV outright with Cash in Hand.

Basically, when the valuation comes in after the 2 years initial rate I will be looking hopefully to be around 70% LTV
This is assuming stable houseprices (stagnation) over the next 2 years, but an increasing Market Value of the property due to the improvements reflecting a more appropriate market value. If this is not the case, I will overpay as much as I can the mortgage, to bring it down to this level of LTV, which by my calculations should not be a problem from savings over the next 2 years of fixed mortgage payments, also based on 2 years of repayments taken into account.

All this affordability does assume that I remain in my current employment for the next few years (based on the fact we have been given approval for a new lease on the building for 5 years, with a tenant only break after 3) should give me a good deal of security.

If after this I am made redundant then I would expect 8 months salary or 10 months (depending on timing, mostly paid NET (tax free) as redundancy plus additional 6 month bonus for sorting out the change (if necessary) for continuity purposes). But this is not expected and a worst case scenario.

I have sickness cover (first 6 months 100%, and then 75% till retirement following including pension contributions of 15% and 5% escalation)
I have already life insurance

This gives me the security I need to make a long term decision as necessary.

Good luck with your choices... its a big step, but im sure you will make the right choices.