FTB - How much should I borrow?

BadMutha5

I'm in the middle of sorting out a mortgage for a £160k house. I have £30k as a deposit. My dad and sister between them have offered to lend me another £30k. The idea being that I won't be swallowed up by the mortgage repayments.

However I am not sure, as realistically paying back an extra £30k, on top of a mortgage seems like a big ask. It's great that my family are looking to help out, but I want to make sure they will get their money back.

I was thinking of borrowing £15k, as this seems like a more realistic figure to pay back.

Someone mentioned that I could remortgage the house after a few years and then pay my family back this way... but is that a wothwhile idea? (assuming I put down £60k deposit)

Any advice? Your thoughts and suggestions would be most welcome. Thanks :-)

lilyann1

You don't say how much your salary is,will the multiples allow you to borrow £145K for the house and only borrow 15k off dad?
Of course borrowing off dad and sister will be alot easier and they probably won't charge you interest.
Remortgage is a few years will be ok if house prices have gone up,what if they have reached near their peak and they do not go up enough for that?

Tassotti

I don't think you read the OP.BadMutha has 30K of her own money as a deposit. If she accepts the generous offer, then the mortgage will be 100KHouse prices will not have to rise for her to remortgage and pay back the borrowed deposit.I think it's a great idea, as it helps you out in the start, allowing you to repay some of the mortgage, whilst enhancing your career.The question is, will your dad/sister wan't interest repayed on the loaned amount?

BadMutha5

Thanks so far. My dad and sister wouldn't want any interest paying back, but as a matter of courtesy, I would want to pay them a little extra if I could.

My salary is currently £30k.

PS - I'm a bloke :-)

barnaby-bear

BadMutha5 wrote:

I'm in the middle of sorting out a mortgage for a £160k house. I have £30k as a deposit. My dad and sister between them have offered to lend me another £30k. The idea being that I won't be swallowed up by the mortgage repayments.

However I am not sure, as realistically paying back an extra £30k, on top of a mortgage seems like a big ask. It's great that my family are looking to help out, but I want to make sure they will get their money back.

I was thinking of borrowing £15k, as this seems like a more realistic figure to pay back.

Someone mentioned that I could remortgage the house after a few years and then pay my family back this way... but is that a wothwhile idea? (assuming I put down £60k deposit)

Any advice? Your thoughts and suggestions would be most welcome. Thanks :-)

Some mortgage rates are lower if your LTV is lower (75% seems a cutoff - as does 90%), I'd take the family money - you can pay them half the difference between mortgage and saving rates plus if made redundant they'll wait the mortgage company won't. Why not pay into an account to pay them back at the rate for the higher mortgage for self-discipline. It's upto you to pay them back you want to be sure they get money back - up to you! If you can't pay them back you can't pay the mortgage and if you can't do that you'd lose the house. If single consider a lodger tax free and you'll have a nice big buffer. Don't go mad because money available easy to buy stuff for houses but if paying that pseudo-mortgage back you won't spend it

Entertainer

If you borrow it off them you can cut out the retail margin that the bank/ building society take off you. That is unless you get a great mortgage deal. They might also not pay tax on your repayments depending how you play it (say washing their cars for them as interest.:p )

BadMutha5

Right, I'm gonna borrow the extra cash. Thanks again for help.

barnaby-bear

BadMutha5 wrote:

Right, I'm gonna borrow the extra cash. Thanks again for help.

Have you investigated offset mortgages - you could not pay interest on the family money but withdraw/repay at any time - although ammounts and interest rates need careful adding up to see if it makes sense.

jyonda

We have a similar offer of a big deposit interest free from family and not to sound ungrateful but we still have to pay it back at some point! We'd need to remortgage in a few years time to come up with the kind of money offered by which point house prices may even be lower than they are now. What if interest rates went up and you couldn't make the payments? You'd need to sell quickly before losing the property and your families deposit. Chances are others would be in a similar position.

I'm sure there are others who would say that's just thinking negatively and don't worry as house prices always go up and people never lose their jobs and if interest rates go up then you just have to work harder.