Mortgage advice

Thrugelmir

chris180682 wrote: »

Any thoughts on my last post? Do you think this would put us in a much stronger position?

If you are uncomfortable with the risk. That interest rates would derail your plans. Then don't take the chance. Buy what you can easily afford rather than over committing. Then overpay your mortgage. Over time this will build the equity in your property quicker. Allowing a further move at some point in the future.

chris180682

Thrugelmir wrote: »

If you are uncomfortable with the risk. That interest rates would derail your plans. Then don't take the chance. Buy what you can easily afford rather than over committing. Then overpay your mortgage. Over time this will build the equity in your property quicker. Allowing a further move at some point in the future.

Our combined monthly income is approx £1890 including child benefit and WTC, the mortgages I've seen on 10% would come out between £565 - £580ish (2 year fixed) which seems do-able when I've taken off CTAX, bills, petrol, shopping. Bearing this in mind I'm thinking if we had the extra £5,000 waiting at the end of the two years IF needed then we should be OK or if we did pay the 15% deposit from the start I think we could overpay from the start but probably not by a lot each month but suppose every little would help!

chris180682

Right, I've managed to find a 5 year fixed with the same monthly repayments as The Sanetender two year fixed and no fee! But it would only be the same as The Santander one if we had it over 40 years rather than 35 but I don't really have a problem with that. I'm presuming most people would agree that in the current climate a 5 year fixed would be the best option if you can get it?? The rate is 5.69% and haven't seen anything else near this at 90% fixed for 5 years, has anyone seen anything better ust incase?

seraphina

chris180682 wrote: »

Right, I've managed to find a 5 year fixed with the same monthly repayments as The Sanetender two year fixed and no fee! But it would only be the same as The Santander one if we had it over 40 years rather than 35 but I don't really have a problem with that. I'm presuming most people would agree that in the current climate a 5 year fixed would be the best option if you can get it?? The rate is 5.69% and haven't seen anything else near this at 90% fixed for 5 years, has anyone seen anything better ust incase?

35 years is a *phenomenal* time length to be paying a mortgage off over - you will pay a fortune in extra interest, even if the headline rate (5.69% fixd for 5 years) is "low". Avoid this timescale if you can.

The Co-op have a 90% LTV 5.49% 3 year fix at the moment but not sure if it's first time buyers only, rather than remortgage as well.

chris180682

seraphina wrote: »

35 years is a *phenomenal* time length to be paying a mortgage off over - you will pay a fortune in extra interest, even if the headline rate (5.69% fixd for 5 years) is "low". Avoid this timescale if you can.

The Co-op have a 90% LTV 5.49% 3 year fix at the moment but not sure if it's first time buyers only, rather than remortgage as well.

Thanks for the reply. To be honest we would take as longer term as possible in order to keep monthly payments down at present in the hope we can reduce the term at some point in the future as with our income and only a 10% deposit we are fairly limited but know what we can afford. Our other alternative was renting so this would be an even bigger load of money to throw away if we rented long term! Plus the rents we have seen are more than the monthly mortgage. Yes I will have a look at the Co-op deal thanks, I think I've seen just about every 90% mortgage deal in the UK now though after searching obsessivley! I'm leaning towards the 5 year one to give us that security in the curent climate although the deal you mention is somewhere in between the 2 year 5.15 I've seen and the 5.69 5 year. Just got to weigh up the length of the security against any reduction on repayments we could get on the shorter term fixed but given our income, etc I think the 5 year fixe dmay be the most sensible.

chris180682

Just thought I'd post we decided to go for a cheaper house and had the offer accepted at £11k cheaper than the other one and it needs virtually nothing spending on it whereas the other would have needed at least £2-3k so we should hopefully have a bit more to put away after completion. We have taken the same 5 yr fixed I mentioned with Nottingham at 90% but should be able to get an 85% mortgage at the end of the fixed period rather than still be looking for 90% LTV if we had gone with the more expensive house. We've still had to take it over 35 years but the monthly repayments are about £30 per month less so all in all a more sensible decision I think.