First time buyer - guarantor advice/info

saverbuyer

Parisien wrote: »

Ok...phone Northern, they are ok to allow 25 yr term as its in my sons name.

Will do further research...because listed prices are still 10-20% higher than the 2005 values!!!

What happens here then is say for example your son earns 15K per year. The maximum amount they will lend would probably be around 60K. If the house you see is 120K then he would have a mortgage of 60K and you would guarantee the other 60K. He gets assessed on the 60K on a 25 year term. You get assessed on the other 60K up until retirement based on your current earnings not on a 25 year term. That’s why you guarantee it the amount the northern judge him not to be able to afford.

Its worth pointing out all the big lenders (HBOS and Lloyds) have completely withdrawn this product.

saverbuyer

trebor21 wrote: »

Its just a guide, some will be more and some less.
I belive anything around that level you have midigated most of the risk, as if they go down another few percent the money you would have paid in rent will offset the difference, but certainly dont pay 200k for a place that has a ratable value of £100k! Also alot of propertys are open for negioating, you could certainly offer lower than the advertsied price.

They have dropped 25% since I looked 2+ years ago. I would say anything around that level probably has much further to fall particularly in this area. Definitely much further that a few percent.

trebor21

2 years ago wasnt 2005!

saverbuyer

trebor21 wrote: »

2 years ago wasnt 2005!

It certainly wasn't but trend is your friend and the last I looked priced were still falling.

leftieM

We've just bought in south Belfast. Houses that we looked at that sold in the last 6 months went for rateable value or less if they required work. The one we've ended up with we got for 30k below the listed RV (so about 15% below) but it needs money spent on it.

Parisien

Yes, since spoken to a guy in the know....more to come, between student fees, numerous cuts, less general spending......not looking good for next 2 yrs.

Plus lots of, and I hate this term esp if people have bought and it is their own home, distressed sales, mainly though from developers and banks. He reckons, waving money up front.....at right person, 15-20% off......


Will be hitting the Estate agents on Lisburn road tomorrow am

tara747

leftieM wrote: »

We've just bought in south Belfast. Houses that we looked at that sold in the last 6 months went for rateable value or less if they required work. The one we've ended up with we got for 30k below the listed RV (so about 15% below) but it needs money spent on it.

Oooh, where did you end up buying?

joefizz

Parisien wrote: »

Thanks for that Joefizz........don't tell me they are mis-selling this to me....;)

I think this is my last mortgage, done all the buying prior to this! But does this affect other credit rating etc...or just limits what you can get as a standard loan?

Ideally, after a few years our son takes it over in his name so assume all back to normal, credit wise?

Thats the way it worked for me. I went guarantor on 60k and this was added to my own mortgage and car loan when I applied for a new loan. Even though I wasnt paying any of the 60k it came off my limit.
It meant that my credit scoring was affected and I was offered the new loan but at a ridiculous rate so I didnt bother.
When I was taken off the mortgage that was all negated but it did hamper me for a while.

Parisien

Thanks JF.....will see how the next few weeks go.

I don't have any loan applications outstanding or envisaged in the next year or two.

leftieM

tara747 wrote: »

Oooh, where did you end up buying?

We ended up in Finaghy. We've lived in this area for 10 years so it holds no shocks or surprises for us. It's not fab in terms of primary schools but it's got some cracking secondary schools just a cycle or bus ride away.