House purchase queries and Mortgage concerns

Lady_K

My daughter and her partner are planning to buy a house together she would be a first time buyer but his side is a bit more complicated. For the last 2 years he has been on a mortgage shared with his parents, I don't know all the ins and outs of the set up only that he paid all the bills and half of the mortgage, his parents paid the other half between them. He is now in the process of getting his name taken off the mortgage so he can go ahead buying a house with my daughter. They have 10% deposit between them and some to pay all other expenses.

I am concerned because they have only gone to one mortgage provider, Halifax, they haven't had any other quotes. Halifax told them they have an A credit rating due to him having the shared mortgage with them and both of them being with Halifax all thier lives, my daughter has also proved to be a good saver even though she has never had a mortgage. They both have decent jobs.

Halifax said they will be classed as first time buyers because of my daughter but I'm confused by this as he has had the shared mortgage before with them, they have also told them they will get a special rate as they are Halifax customers so her partner believes he wont get better anywhere else. I'm hoping they won't have to pay stamp duty and will get all the benefits of first time buyers so I hope Halifax really do mean they will be classed as first time buyers

They say they don't have time to get any other quotes because it takes 10 days. Halifax gave them a mortgage promise for a fixed 3yr repayment for 35 years but the house they have chosen is a bit cheaper so they are meeting halifax again tomorrow to see about changing it to a 25yr 3yr fixed term one instead

On top of this I'm concerned because everything is such a rush, the house they have chosen has to be sold very quickly. When they viewed on Monday evening the owner said he had to sell it in a week because of a new house deal he had made with wilson homes or it would come off the market as he would lose his new build home too. He had reduced it by 5k that day so my daughter and partner put in an offer straight away of the reduced asking price which has been accepted by the owner but apparently wilson homes say they wont take it off the market until they can prove they are serious and they must sign contracts within 28 days. Because the owners are buying a new built proprty with wilson homes they have now taken over the sale of the property.

Because of the 28 day contract signing everything is being rushed so they are not getting any other quotes or advise and this worries me, although he had a mortgage before he really knows nothing about them as it was all done by his parents apparently while he was away. He has not gained any equity from the shared mortgage because the place has gone down 26k since they bought it so he has nothing from that.

Wilson homes wanted them to use thier solicitors to make sure the contracts were signed before 28 days but they have decided to go with the one halifax recommended to take his name off the mortgage as they were quick and charged half the price.

The vendors have agreed as soon as contracts are signed they will then look for rented accom as thier new home will not be finished until April

I do actually have a Halifax mortgage myself but its 21 years old so I'm not totally against Halifax but I just feel the way things are now its important to shop around. I briefly looked up mortgages on the net and it doesnt seem that Halifax figure near the best deals

Thrugelmir

Few 90% deals on the market currently.

With a 28 day contract exchange it all seems very rushed. Personally I wouldn't be pressurised by the vendor. The problem is there's. The short time frame hardly allows any time to process a mortgage application.

I would caution against a 35 year term for the mortgage. Extending the term to reduce the repayments is not advisable. This is only of benefit to the lender.

Lady_K

It isnt the vendor thats pressuring them really, its wilson homes. I suppose the vendor is under pressure because he will lose his new build home unless he sells quickly but he was very nice to them.

I really wanted them to wait a bit longer and save a bit more to get a better deposit and deal, it really wouldnt take that long but they are letting thier hearts rule thier heads.

They had thier first meeting with halifax a couple of weeks ago which is when they were promised the 35yr deal so not sure if that quickens things up

Maybe its because they know they probably wont get a 90% deal from many places

dimbo61

Your daughter and her boyfriend seem to have the right idea.
3 year fix gives them security of knowing the mortgage payment for the next 3 years and it would be nice to put down 15/20 or even 25% deposit but that might take years.
They have history with the Halifax and I would take the mortgage out over 25 years or even less!
What is the house like they are buying is very important ? old ( needs lots of work/upkeep) or modern with good insulation, lower bills and upkeep.
Location and size are also things that should be considered.
Does it need a full survey or any other problems.
I have recently bought a property and had only a few weeks to sort out all the work thats involved.
ie legals,surveys,mortgage,stamp duty etc
Check the place out with the your daughter/boyfriend and make sure they are getting a good deal
ITS A BUYERS MARKET !!!

Lady_K

I havent been to the house but the pictures look nice and they said the pictures don't do the house justice. I know daughter would like me to see it but we have all agreed it wouldnt feel right visiting because its occupied and they have made thier mind up anyway so it would just be for my benefit or her partners parents. I would feel like I was intruding on thier privacy. I have looked on street veiw though and the surounding houses all look well cared for too.
Not sure how old it is but probably 40 or 50 years or more. Its a semi and seems to have been well looked after, very well presented and good sized landscaped garden. The owners have been there for 12 years and are moving for more room as the lady is pregnant with 3rd child. I don't think it needs a full structural survey but the mid range one, not sure on electrics, damp or woodworm etc but I would hope the survey will inform if anything needs doing, not sure on energy and efficiency ratings but the combi gas boiler is 3 years old and hes just had the full length rear extension flat roof redone with a 10 year guarantee which I hope will be transferred.
As it is now they could just move in, the owners have really tried hard to make the house appealing to sell. Newly decorated throughout and Kitchen is fairly new too. They are leaving all white goods as they are integrated and my daughter asked if they would consider leaving the curtains and blinds to which they have agreed. All the carpets look quite new

They are getting the house for just 130,000 which is about average for the area and between them it really wouldnt take that long to get a deposit of 20 or 25% because my daughter has been back living with me for a while and he has now been removed from the mortgage so doesnt have those expenses anymore, but I's likely they will continue with this anyway.

Her boyfriend says they will have a 3 year fixed then change the mortgage at no cost, do you think they will be classed as first time buyers ?

Lady_K

Do these rates seem very high? They are going for a 3yr fix repayment and for a 10% deposit there are only 2 types on halifax site. Apparently they were told they could not have a 5yr fix yet its on the first time buyers mortgages on the website so not sure why they have been told the longest they can have is 3yr

3 yrs initial rate 6.29% until 31/12/11,
next rate 6.59% from 1/1/12
svr thereafter from 31/12/13 Currently 3.50%
overall cost for comparison 4.2% APR, fee £995, 10-15% deposit, early repayment charges till 31/12/13

3 yrs initial rate 6.49% until 31/12/11,
next rate 6.79% from 1/1/12
svr thereafter from 31/12/13 Currently 3.50%
overall cost for comparison 4.2% APR, fee £495, Min 10% deposit, early repayment charges till 31/12/13
(With this one only First time buyer incentives include:
A refund of your valuation fee (level 1 valuation up to a maximum of £430)
No conveyancing fees (you must still pay disbursements)~
£500 cashback to spend how you wish)

These rates seem really high to me should they be looking elsewere? Her partner says they will change the mortgage after the 3yrs at no cost but it seems most have charges anyway

Can halifax still class them as first time buyers even though hes been on a shared mortgage or has there been some missunderstanding between them?

If they are classed as first time buyers with halifax does that mean they will not have to pay the stamp duty on the purchase or is that different?

dimbo61

NO NO NO its very important you do go and look at the property.
A fresh pair of wise !! eyes will spot things your daughter and B/F would miss.
Check the area, schools ??? local transport links and any other info you can find.
use the net ( rightmove, up my street, local council website for council tax and cost etc)
Information is very usefull.
Just because halifax say they are FTB the government might think different and they may well have to pay Stamp duty.
Not sure about the rates but applying elsewhere now would delay the purchase and more important can they afford the mortgage and all the costs of setting up home.
Are the sellers taking the curtains, carpets, light fittings etc ( people do so check the list from the solictor)
We got the tumble dryer , dishwasher and all curtains,carpets and light fittings included in the price.

dimbo61

Dont like flat roofs extensions full stop ( cheap and they will leak sooner or later)
Check the electrics carefully £3500 for a full rewire.
Take someone along with you to have a look ( builder ,electrican )
How many plugs in each room?
you need 3 doubles in bedrooms and 10 in kitchen
Full survey cost me £400 and money well spent if it needs work get the price reduced

Lady_K

I didnt realise a full survey could be £400 I thought it would be more like £800-£1000 so its worth considering. The estate agent has told them that it doesnt need a full survey and her partner seems happy to take his word, the agent also said that, that property is a bargain

They are leaving the curtains and blinds and although they have not confirmed this my daughter thinks they may be leaving the carpets as they are moving to a new build but I did tell her to get confirmation of this.

Wouldnt a survey say if it needs rewiring? I'll get her to check with them the amount of sockets

All white goods included, cooker, washer/dryer fridge and freezer

dimbo61

The estate agent is acting for the seller and not the buyer ask him/her to put it in writing that the house is perfect and needs nothing doing ( watch them go quite!)
Taking up carpets and putting them down in a new property is not worth the bother but some people will do anything to make an extra penny.
The house is 40/50 years old and may have old wiring and some new ( do you know the difference?)
The boiler is only 3 years old but has it been serviced any warranty ?
Double glazing ? good insulation ? Has the extension been well built and did they have planning permission ( solictor should find that out )
Cooker should be part of kitchen ( fitted) and you can buy a washing machine for £200 new,
Be a wise owl and check the place out with them

Henry_P_Chester

They will have to pay stamp duty they will not be classed as FTBs for stamp duty relief. But if they can negotiate £5k off the asking price it will bring them down below the £125k lower limit meaning they won't pay any.

Those rates are very high. It might be worth looking elsewhere even if you just check other websites for what rates are advertised.

I think really they need to save more of a deposit. Rates are much more favourable with 20/25%. If they won't have a problem saving it's well worth doing as the money it will save in interest payments can be huge!