Mis advised- FURIOUS

getmore4less

Courtmill wrote: »

There's been a delay because whilst we hold a freehold for the whole building, there is a leasehold on 3 of the garages underneath our property which Halifax have been querying with our solicitor.

THis sounds scary.

Thrugelmir

getmore4less wrote: »

THis sounds scary.

I owned a coach house of similar design some years back. Nothing to be overly concerned about. One garage was mine. Luckily the other 2 were used only for storage only. The floor of the house will be constructed in solid concrete. So no danger either.

kaya

i have no tech advise to offer but stretching your finances to the point that you can "only just afford" seems a bit reckless given the current financial situation

Courtmill

We can afford the mortgage guys, don't worry. (But thanks for the concern!)

The bit we're struggling with right now is the lump sums we need to pay... but our income is sound and we'll be in a fine state to overpay the mortgage as well as save plenty to chuck at Persimmon.

Overpayments are limited to 10% of the remaining mortgage amount I think...
This is what our illustration says:

11. What happens if you want to make overpayments?
These are restricted to 10% of the outstanding balance per year. You are free to make lump sum or regular overpayments to this mortgage at any time.For details of any early repayment charges that may apply please refer to Section 10. Currently, as a concession, in any 12 month rolling period you may repay up to 10% of the amount outstanding on your mortgage product without having to pay an early repayment change.Halifax reserves the right to change or withdraw this concession. The lender’s daily interest method will apply and the interest charged takes account of any changes in the mortgage debt from day to day.Any lump sum or regular overpayments made will immediately reduce the amount of interest you have to pay because interest will be charged on the reduced balance.

This is what is says about Early Repayments:

Early Repayment Charges.
An early repayment charge applies if you want to repay the mortgage early. The charge is calculated using a
loan amount of £114,499.00 and is based on:
3% of the original loan if the mortgage is repaid before 31/07/2011.
2% of the original loan if the mortgage is repaid before 31/07/2012.
Based on the original amount borrowed, cash examples of the early repayment charges that could apply would be:
£3,434.97 if the mortgage is repaid before 31/07/2011.
£2,289.98 if the mortgage is repaid before 31/07/2012.
Therefore the maximum charge you could pay would be £3,434.97.
What happens if you move house?
Your special rate mortgage product is portable. Further information regarding portability can be found in the section headed 'Early Repayment Charges' in the booklet 'Information about your mortgage' which the lender issues with mortgage offers.


We're buying a house for mostly financial reasons- we rent a 2 bed flat at the moment. There's no heating, sash windows, the worlds oldest night storage water heater, it's falling apart. The window sills regularly fall apart and we've replaced 2 of them so far. We live in the town centre and next door to the shop we live above is a cafe type place for people in the town who have nowhere else to go. I.E drug addicts, of which our town has plenty.

Now there are bonuses to this flat. It is DIRT CHEAP... but after nearly 2 years there my boyfriend and I are going insane. We decided we were moving this year anyway, and were looking at renting a more modern 2 bed flat (or at least somewhere with heating!) This would have cost us £600pcm easily.

So there you go... null and void point really. Buy a house or rent one? If it's basically going to cost the same, it's a no brainer!


breaking news:
Persimmon have agreed to pay £500 of the additional £1500. IF we exchange by 23rd July.
Now that, is fine by me. My boyfriend and I are desperate to get things moving, so if this pushes things along, and we get some assistance in the costs... we're sorted!

This may complicate things slightly in terms of the lender- as they have t&c's about where money can come from- but I've been reassured this can be sorted. (Obviously something they've done before....)

So, I'm another step closer to understanding this whole process.


Can I ask a stupid question? Negative equity... basically translated to mean if the house price falls to a lower rate than the outstanding value of our mortgage??
What implications does that have?

Courtmill

Oh yeah and the garage thing is fine.

There's 4 beneath us.. 1 is ours and we have electricity, plumbing and everything down there.
The other 3 are just garages. They are not allowed to have any running water or electric etc.. so basically will just be for storage. The houses they relate to as well are a considerable distance from the garages, so I'm hoping people will not even be parking directly outside, as they would be further from their own homes.

beecher2

Courtmill wrote: »

Can I ask a stupid question? Negative equity... basically translated to mean if the house price falls to a lower rate than the outstanding value of our mortgage??
What implications does that have?[/LEFT]

It means that you'd be unable to get a new deal on your mortgage, and be stuck on the Standard Variable at a time when interest rates will likely be rising. Like I said, the 'norm' is 7% - make sure you can easily afford your mortgage, and the additional loan, at this rate. I think it'd be about £732 a month - at 10% it'd be £984 so make sure that you'd be able to cope with that.

Your Loan to Value rate would have to be below 90% in order to get a deal elsewhere, though Halifax have in the past been a bit more flexible than others. Who knows where we will be in 2 years time though.

InMyDreams

Courtmill wrote: »

Can I ask a stupid question? Negative equity... basically translated to mean if the house price falls to a lower rate than the outstanding value of our mortgage??
What implications does that have?

The implication is that you'll be unlikely to be able to remortgage in 2 years time so will be stuck on whatever variable rate your mortgage lender chooses. This is likely to be higher (possibly much higher) than their current variable rate stated in the KFI. You will be trapped there, owing more than your house is worth and paying through the nose for it.

I'm a bit worried by your assumption that you will be able to get another fix after these two years are up. Even if you are not in negative equity, the chances are that you won't have built up enough equity (at least 10%) for any deal, let alone a good one (for which you'll be needing 20% or more).

You really don't want to be in negative equity.

Edit: Ah - beaten to it ;-)

arby

after 2 years of living in a "dirt cheap" flat you've saved £7k, and now you need to save £30k in 5 years together with the increased expense of running your own home? You won't want to hear this, but there are serious question marks over whether you should proceed with the purchase. Both because of the direction of the housing market, together with your limited understanding of the implications of re-mortgaging a house that is in negative equity while having £30k to repay.

Courtmill

Arby... we've saved up that much in year.. after picking ourselves up from both being made redundant last year.

I have to admit, I have not been party to information regarding negative equity until you guys mentioned it.

It is concerning, but surely this will be the case for many people, regardless of whether we're on a shared scheme or not.

I'll explain again about the additional 20%. It is 20%... not £30k. Although right now £30k is the equivalent of 20% we may well have to pay back more. Or less.
I am going to check in with a few people re the negative equity situation, and see how portable our mortgage is.

Thrugelmir

Courtmill wrote: »

I'll explain again about the additional 20%. It is 20%... not £30k. Although right now £30k is the equivalent of 20% we may well have to pay back more. Or less.

How will it be less?

You are purchasing the property for a £150k. The builder is lending you £30k of this, in the form of a loan. The loan will be secured by a second charge on the property in the sum of £30k. The first charge will be with your mortgage lender.

The capital amount owed to the builder doesn't change.