FTB mortgage advice needed

jobytc

Hi all,

As a FTB looking to invest in a property in London (shared ownership) I wondered what kind of mortgage you'd advise getting? To give you an idea I have a deposit of approx £10000 (hard won!) and would like to make payments on my debt so not interest only. The kind of place I'm keen on would mean borrowing approx 80-90% but as its shared ownership I'm hoping that my deposit can be smaller than usual.

So should I go tracker or fixed? With service charge, rent and mortgage I could proably afford to pay around £1000 per month or just over.

Any advice gratefully recieved...

thank you

Jobytc

Gorgeous_George

The decision to choose a tracker or fixed rate product depends on your capacity and willingness to accept risk. Personally, I would look at the whole mortgage deal over 25 years as I prefer NOT to join the churners who only succeed in lining the pockets of intermediaries - IMHO. To do this, you need to consider the follow on rate once the fixed rate or tracker term ends. This needs a bit of crystal ball gazing. My crystal ball suggests base rates are not likely to move much higher (3%+) any time soon so I shall be keeping my base rate trackers for the time being (probably forever). I can accommodate being wrong.

The main function of shared ownership is to give those who cannot afford to buy outright a chance to take on massive debt for an overpriced property. This feeds the bottom of the ladder and ensures prices remain unaffordable for many low paid workers for years to come. Gotta keep the Ponzi scheme going.

What is your motive for the purchase? You mention an investment so I assume you won't be living in the property. BTL is risky and must be considered carefully with a properly costed business plan. Be careful.

Most of all, good luck.

GG

brit1234

jobytc wrote: »

As a FTB looking to invest in a property in London (shared ownership)

I think your find legally that you can't rent them out, its one of the many strangling extra conditions.

Shared ownership isn't for investment purposes.

Its purpose id to get first time buyers to overpay for a property and prop up existing prices.

Personally I would save a bigger deposit and buy a normal property. A £10,000 deposit is endanger of getting drastically reduced in the continuing falls.

Have you considered property outside London?

jobytc

Thank you both for your comments.

I can assure you that when I say 'invest' I mean in the broadest possible sense as a property to live in and own. I 100% want to live in the property and have no intention of BTL. I currnetly work and live in central london and have little chance of buying outright in london - a £150000 property would mean borrowing 140% - quite out of the question.

This is why shared owndership appeals to me and a generation of young people living in London - it is the only realistic way of ever getting on to the housing ladder - especially if you're single and don't have the advantage of 2 incomes.

I can see that interests rates are at a historic low and are likely to go up so I should be prepared top pay steadily more over potetially the next 5-10 years. I do have some wriggle room though so hopefully I can absorb any increase (as long as they're not early 90's level).

Once again - any thoughts much appreciated,

Jobytc