FTB Post Office Mortgages and general advice

AAS

We had our AIP from the Post Office quite a while ago. It's taken us nearly a year to find a house and have our offer accepted - we have now had an offer accepted of £150k. We were going to put down a 10% deposit but as it took a long time we now have enough for a 15% deposit with about £1500 left over - I may be able to borrow about 1k from my mum and I have a 2k overdraft! My question is - the london & country mortgage adviser said it would be much better to scrape together the 15% deposit and also warned us that Post Office mortgages are taking months to come through. Has anyone used the Post Office? Do you think I'm not leaving enough for other costs? We can easily afford the monthly payments, we don't need any funiture and have lots of mates with vans for removals!

JSR

IMO it's possible if you can physically move for free and you already have furniture, white goods and curtains etc.

You'll need to be careful with which mortgage product you select as the fees can easily mount up to £1,500. (Fee free ones at the PO aren't very good at 85%, btw.) You'll need between £1,000 and £1,200 for legals. £100 to £200 for connecting services like broadband and phone. No stamp duty if you've never owned before otherwise £1,500.

When I was researching mortgage deals I read a lot of good reviews about the Post Office turning applications around within a week and didn't read any saying they took months (unlike many other lenders!). Their deals at 90% are rubbish though so went elsewhere.

AAS

Some mortgage fees can be added to the loan though can't they? That's what the Post Office one offered. We'd like a 5 yr fix - I've found one with Nottingham BS @ 4.99% but it does have a £995 fee.

We've had a quote for legal fees at about £1000 and a full survey at £450. How much would building insurance be? I'm guessing we could pay monthly? We will in theory get £1k back from our deposit for rented house but I'm trying to 'forget' that just in case! I'm really sensible normally so would always have some extra but it seems silly to loose out on £5k over the 5 years when we could use our overdraft for the first couple of months.

JSR

Some mortgage fees can be added to the loan though can't they?

They can but many lenders say in the small print that this is subject to LTV. So if you're right up against the limit adding the fees to the loan could take you over. I can't remember if the PO do that or not.

We'd like a 5 yr fix - I've found one with Nottingham BS @ 4.99% but it does have a £995 fee.

The Nottingham is were my mortgage is (hopefully) coming from. Valuation on Monday.

How much would building insurance be? I'm guessing we could pay monthly?

Probably about £250 (buildings and contents). Nottingham BS can arrange it for you with no penalty for paying monthly (through Royal Sun Alliance), although be aware there is a fee if you take an NBS mortgage and go elsewhere for insurance!

I'm really sensible normally so would always have some extra but it seems silly to loose out on £5k over the 5 years when we could use our overdraft for the first couple of months.

I tend to agree. Might be worth getting a 0% credit card to cover any unexpected upfront expenses - just in case.

AAS

Thanks for your advice - good luck with your purchase too!

bwlv1

We completed out mortgage in september with post office and they were superb, they were very quick and their customer services are great.