first time buyer and right to buy?

tashamarie70

im in need of some help , we are aboutn to buy our council house , we went to halifax for a mortage and all ok , but feel the product fees and valuation fee ect is rather steep , so went to a broker and they have !!! back with abbey , im not sure whether its better to pay a higher product fee or slightly higher rate???

also halifax wont happily lend us extra to improve the house which is a huge problem and bbey will

we are borrowing 66000 standard but want to borrow 70000
halifax at 66000 charge 995 product fee 280 vauation and 250 completion at a rate of 3.39

abbey at 70000 charge 350 product fee free valuation 250 completion and 250 cashback at a rate of 3.79
this is all on a 2yr fixed rate
can anybody give me a bit of advise???


thanks very much

kingstreet

It almost always works out that if you are borrowing a smaller mortgage, under £100,000, a fee-free deal (perhaps with a cashback) with a slightly higher rate will work out cheaper overall.

For example, Hanley Economic's lifetime variable discount product starts at 2.99%, is fee-free and gives £250 cashback on completion. If you borrow £70,000 you'll pay £4,186 in interest over two years. If you deduct the cashback, the mortgage cost is £3,936.

If you compare that with Northern Rock's two year tracker, starting at 2.48%, the interest over two years would be £3,472. However, when you add in the valuation cost of £231* and arrangement fee of £995 your total over that period is £4,698.

So there's a £762 saving over the two year period by going with what to most people is a worse deal!

I'm not recommending these offers, or suggesting they would suit your circumstances. They are an example of what your adviser should be considering in finding you the best overall deal.

*Assumes a property value of £100,000.

tashamarie70

thanks , this is what i thought i just wasnt sure , and yes property value is at £100, 000