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Deposite problems not FTB's HELP!!!!!
Pold
Posts: 8 Forumite
Hi Peeps,
Just want to sound out some independent financial advice I have been given recently because to be honest it scared the hell out of me and my GF.
Quick version is we own (Northern Rock mortgage, fixed 5.5% repayment 5 years, now 4.79% variable) a flat in Surrey worth at present $138,000 our mortgage is £115,000. between us we earn £45,000.
Houses round here are around the £200,000+ mark, so forgetting at the moment fees, moving costs etc. we have been told that the £23,000 equity from our flat in no where near enough to get a mortgage for a £200,000 house (11% approx). 6 out of 8 banks will not lend to us and the 2 that will are very high rates as we are considered 'HIGH' risk! and these are a seriously bad idea.
Just to point out we have payed flawlessly for the last 5 years and have no bad credit.
We now a require 20 to 25%+ deposit to get considered for anywhere near normal rates or be considered at all.
So we require £50,000+
We have been advised to either stay put for the next 2 years+ or sell up and get out before the prices round here crash because of the above problems, move back to the parents bank the equity and save like crazy!!
Right now we would struggle to re-buy the flat we live in??!!
Is it really that messed up out there in bank land right now? If with clean credit, 5 years of payments and £23,000 we can't buy our flat how on earth can a FTB do it?
Utter stand still is all i can see,
All comments and information greatly received,
Thanks,
Pold.
Just want to sound out some independent financial advice I have been given recently because to be honest it scared the hell out of me and my GF.
Quick version is we own (Northern Rock mortgage, fixed 5.5% repayment 5 years, now 4.79% variable) a flat in Surrey worth at present $138,000 our mortgage is £115,000. between us we earn £45,000.
Houses round here are around the £200,000+ mark, so forgetting at the moment fees, moving costs etc. we have been told that the £23,000 equity from our flat in no where near enough to get a mortgage for a £200,000 house (11% approx). 6 out of 8 banks will not lend to us and the 2 that will are very high rates as we are considered 'HIGH' risk! and these are a seriously bad idea.
Just to point out we have payed flawlessly for the last 5 years and have no bad credit.
We now a require 20 to 25%+ deposit to get considered for anywhere near normal rates or be considered at all.
So we require £50,000+
We have been advised to either stay put for the next 2 years+ or sell up and get out before the prices round here crash because of the above problems, move back to the parents bank the equity and save like crazy!!
Right now we would struggle to re-buy the flat we live in??!!
Is it really that messed up out there in bank land right now? If with clean credit, 5 years of payments and £23,000 we can't buy our flat how on earth can a FTB do it?
Utter stand still is all i can see,
All comments and information greatly received,
Thanks,
Pold.
0
Comments
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I'm not a mortgage advisor, or a financial advisor, just to make things clear.
Your joint wage, does that include commission/bonus, or is that just your set wages?
Do you have any other debts? Do you have any other savings?
Are you sure your flat is worth that much? Who valued it?
45k * 4 is 180k (the amount you'd need to borrow). Which is just about doable (from what I understand), assuming none of that is benefits or bonus etc. 90% mortgages aren't great, fine, and yes you'll get a better deal with 15-40% mortgages, but we'd all have a better deal if we could buy outright too.
As for rates, that depends on where interest rates are at the time, and what deal you go for (length of fix etc), but fixed at 5.5-6% from what I just looked at would be what to expect. Not cheap, but not really ridiculous.
The amount your borrowing is a little on the high side to your income, and obviously anymore deposit would help this and on the %. Any chance of saving 10k to get you to the 15% mark? Ignoring other fees as you said.0 -
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Unfortunately that is how messed up things really are (in my experience and opinion) at the moment. It is very difficult to get a mortgage (rightly so) after the mess the banks made of it in the last decade and now they have gone the other way and are only lending to people who they consider, are a safe bet i.e. the more the deposit, the better the chance.
Flats (especially down South) are a risky business as most were over valued and a lot are in negative equity and unfortunately your combined wages (especially for the south) are considered 'low' to finance a £200k mortgage. Not trying to put you down but we earn £54k between us and have 'just' managed to get a mortgage for just under £200k but had to stump up a 25% deposit and we live up North ...If you don't have 'owt important to say then don't say 'owt ...
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Unfortunately that is how messed up things really are (in my experience and opinion) at the moment. It is very difficult to get a mortgage (rightly so) after the mess the banks made of it in the last decade and now they have gone the other way and are only lending to people who they consider, are a safe bet i.e. the more the deposit, the better the chance.
The banks have gone "the other way" as too many people are not paying back the money they borrowed.RENTING? Have you checked to see that your landlord has permission from their mortgage lender to rent the property? If not, you could be thrown out with very little notice.
Read the sticky on the House Buying, Renting & Selling board.0 -
I'm not a mortgage advisor, or a financial advisor, just to make things clear.
Your joint wage, does that include commission/bonus, or is that just your set wages?
Do you have any other debts? Do you have any other savings?
Are you sure your flat is worth that much? Who valued it?
45k * 4 is 180k (the amount you'd need to borrow). Which is just about doable (from what I understand), assuming none of that is benefits or bonus etc. 90% mortgages aren't great, fine, and yes you'll get a better deal with 15-40% mortgages, but we'd all have a better deal if we could buy outright too.
As for rates, that depends on where interest rates are at the time, and what deal you go for (length of fix etc), but fixed at 5.5-6% from what I just looked at would be what to expect. Not cheap, but not really ridiculous.
The amount your borrowing is a little on the high side to your income, and obviously anymore deposit would help this and on the %. Any chance of saving 10k to get you to the 15% mark? Ignoring other fees as you said.
45K is without any bonuses, no savings and 5K loan.flat has been valued twice by different estate agents.
I worry now that we are stuck both ways as we will struggle to save 25% whilst living here and struggle to find anyone that can actually buy the flat to move out!0 -
Welcome to the Credit Crunch.
Get saving or ask the parents to let you have your inheritence early.0 -
45K is without any bonuses, no savings and 5K loan.flat has been valued twice by different estate agents.
I worry now that we are stuck both ways as we will struggle to save 25% whilst living here and struggle to find anyone that can actually buy the flat to move out!
You need to cut down on your expenditure and over pay your mortgage.
Clear the £5k loan first. Before the mortgage.
If you put your minds to it , its suprising what can be achieved. Though most importantly have patience.0 -
thanks for the input guys/gals unhappy times ahead i feel.0
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is there a rush for you to move? maybe better to wait, i couldnt afford the house i'm in now either!0
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