Is it really a Minefield??

SpeedSouth

I am currently in the process of looking to buy a house. What will technically be my first as far as the FTB mortgages and stamp duty are concerned.

I am buying the house with my girlfriend, but hope not to have to use her on the mortgage, as she currently has one, and therefore I will be free for stamp duty up to the value of £250k.

The leading contender of house is currently up at £190k, I can raise a deposit of £60k, so I am working on a LTV of 75% or less which obviously opens up the better rates.

I spoke to a broker late last year, who suggested a mortgage deal, but doing my own research I've found cheaper deals. The current leader in my eyes is the NW 5 Year flexible Tracker.

Its 2.75% above but has no early repayment charges. So if it did get out of control I have the option of taking another mortgage and locking in.
As a flex account customer I get various freebies of survey fees and things too.

Using their calcs I should be able to get the amnount I want. Base Salary is £25k + £6-8k commission with a pay rise lined up for April.

Whilst never having a mortgage before I have had credit cards for the last 10 years or so. Spending in the £1,000's each month and always paying in full which should hopefully mean I have a good chance at getting these mortgages and have a decent credit score.

At this value of house we can easily afford the repayments between us and would overpay to the hilt for as long as we could. We could afford a bigger and better house but are planning for kids and don't want to put ourselves in a situation later down the line where we are struggling to meet repayments on a bigger house.

Am I over simplifying this or not?

Thrugelmir

Firstly you need to ascertain if you can obtain the mortgage you require on your salary alone.

Meeper

If you don't want to take your girlfriends assets and liabilities into account and put her on the mortgage, she can't have any ownership of the property either. This may be an issue for her.

You are not really over-simplifying it, it doesn't sound like a complicated situation to be honest. Borrowing £130,000 on your salary however will be right at the top end of affordability as far as lenders are concerned, so I would be aware that they may not lend as much as you want. Affordability calculators on websites aren't always accurate. Whilst you are comfortably able to make the repayments jointly, none of your partners' income will count in this case.

This makes me think.....why not count the girlfriend? What is happening with the place she already owns? Is it being rented out? Are there any reasons not to put her onto the mortgage other than to avoid the Stamp Duty?

SpeedSouth

As I said all being well, providing my credit score is satisfactory I will get the amount I need, based on the NW what can I borrow calculators.

I would hope as well by going with NW this will work in my favour as this is my main account. I realise it will be right at the top end of my current salary, but the repayments could be kept well within my ability to pay if I extend the term accordingly.

Her place is currently being rented out on BTL mortgage and we have been told that should we need to obtain a joint mortgage this will nto be reflected in any applications. The only reason not to put her on it is as you say to avoid stamp duty. At present she is not worried about the ownership issue either. Later down the line when we are due to remortgage we would look to add her at this point.

Oh and I am going to see them next week to get the ball rolling and see what they will lend me.

Thrugelmir

adam81 wrote: »

As I said all being well, providing my credit score is satisfactory I will get the amount I need, based on the NW what can I borrow calculators.

The calculators are only a guide. Suggest you make a phone call and enquire.

SpeedSouth

Just edited the one above, will be going in to see them next week.

herbiesjp

I spoke to a broker late last year, who suggested a mortgage deal, but doing my own research I've found cheaper deals.

Last year is a long time.

He might come up with something different now at 75%

Conrad

Go direct to lender as some rates are only available going direct.

A broker is ONLY a meaningful addition to the chain if you have some complexities. Most people are perfectly able to compare rates and fees and make thier own decisions.

dreamalittle

What do you mean by 'technically' being a FTB? For mortgages it will usually just mean that you don't currently have a property/mortgage, but for the stamp duty exemption, you must never have owned a property or a share in one.

Might solve the problem if neither of you is eligible for the exemption!

SpeedSouth

I've had cash in properties before but never appeared on deeds or anything. I've checked this numerous times but will be checking again with solicitors to make sure.

As you say if for some reason I'm mistaken and not exempt it becomes a much easier decision and mortgage to obtain

Meeper

Conrad wrote: »

Go direct to lender as some rates are only available going direct.

A broker is ONLY a meaningful addition to the chain if you have some complexities. Most people are perfectly able to compare rates and fees and make thier own decisions.

Whilst a "broker" might be as described, an experienced "adviser" can be worth their weight in gold in the process. I am sorry that you have not learned this.
If all that was important about mortgages was the rate and the fee, I might (still only might) be inclined to agree. I can probably list about 20 other criteria which are important to factor in to decisions about which mortgage is "the best", so using a suitably qualified and experienced adviser is often an excellent idea even if you think your situation is straightforward.

It is exactly this type of post which makes people nervous about going to advisers in the first place as they feel it is unnecessary and will cost them money, then they end up getting the mortgage that is not right for them and their individual circumstances.

Not helpful.