AIP withdrawn, what now 90% ltv need interest only

getmore4less

riverboat2001 wrote: »

I have a flat worth about 350k with 48k outstanding. My Mum lives in it. She will be retiring at some point in the next two years, and then my flat will go up for sale, this will be used to pay off my new mortgage.

So this is why an interest only mortgage will do us just fine.

Mum has also said that if we sturggle she will move out straight away (she has somewhere to go)

Probably best to sell up know in two years that flat might be worth less that £350k with prices dropping.

If it will definately only be 2 years borrow a bit more and use this to cover the repament mortgage.

Still needs the income to cover the borrowings does that part stack up.


Does your current lender know you are not living in the place and have let to family?

riverboat2001

getmore4less wrote: »

Probably best to sell up know in two years that flat might be worth less that £350k with prices dropping.

If it will definately only be 2 years borrow a bit more and use this to cover the repament mortgage.

Still needs the income to cover the borrowings does that part stack up.


Does your current lender know you are not living in the place and have let to family?

I understand the concept of borowing more, but if the house i'm looking at is only valued at 235k, how could i borrow more?

Also whilst mum lives in my flat, she doesn't pay me any rent.

dunstonh

Also whilst mum lives in my flat, she doesn't pay me any rent.

Ignoring the potential tax issues that gives (and possibly issues later on if long term care means test is required), are they aware that you are not living in it?

dmorgan

opinions4u wrote: »

1) Why do you need an interest only mortgage?

Assume one MAY BE considering to move within say 7 years. On a repayment mortgage one ends up paying about 50% more on a monthly basis, but what is the Equity balance calculated by the bank at the end of let's say 3 years (assume house prices are flat or at best grow with inflation)? On a 4% fixed 25 year repayment monthly payments are actually 60% higher than IO, however after 3 years you should have accumulated 7.2% of equity, and what would your bank show?

Provided you are not staying with the property for under 7 years I bet the repayment proposition looks much less attractive these days compared to the previous decade when regardless of what bank allocates one used to have a decent appreciation in value. So, if, a few years ago, one moved house after a few years only, both the person and the bank had a decent deal.

IO is extinguised by the irregular income that, let's face it, many people do receive (of course some don't, but then the IO is less suitable to them).

opinions4u wrote: »

2) Why would you do business with a broker you picked up on an internet forum?

Ok, so how do you find a decent broker/online search?

opinions4u wrote: »

3) Could you raise a bigger deposit on your existing property?

Hmm, any tips here? As per aforementioned, the irregular income is often not enough to raise 25-30% of the purchase price, even when saving over several years...

riverboat2001

Used a broker recommended by Martin as whole of market etc, been very helpful, can't fault them really.
I could probably raise the extra 5%, but house needs work and there would be no money left for that, let alone the stamp duty, solicitors fees ect......

I would like to get the mortgage product that i'm looking for, and then if sale drags on, i could save the extra deposit and change for a different product, the vendor however is after a quick sale.

riverboat2001

Right, back into the fray after a break away from all the stress of house hunting.

We earn £37, 500 each per year before tax.

And we are still looking for an interest only deal fixed at lowest possible rate for 2 years.

getmore4less

Total borrowings of £260k+ on £37.5k thats 7* multiple.

I think you will have dificulty with that.

riverboat2001

getmore4less wrote: »

Total borrowings of £260k+ on £37.5k thats 7* multiple.

I think you will have dificulty with that.

Okay, was hoping to offer 240k on new property, with 25k deposit

so 215 +48 = 263k

What are the multiples then?

getmore4less

riverboat2001 wrote: »

Okay, was hoping to offer 240k on new property, with 25k deposit

so 215 +48 = 263k

What are the multiples then?

:eek: now that's scary.

riverboat2001

getmore4less wrote: »

:eek: now that's scary.

I'm sorry, you've got me, i don't understand, i have had two AIP's whilst truthfully declaring my outgoings, how can they be so wrong?