help with 125% mortgages

roswell

imagen a extra quarter of the house attached tot eh side and thats the size of your mortgage, your going to be down 25% on the amount the house is worth if your going to gamble that house prices are going to rise your in luck, if they go down your going to be stuck with a very big mortgage and a house you cant sell.

are you willing to do that ?

sarah_elton

Madjock wrote:

To be fair to Northern Rock, their rates are better than the alternative lenders for a 125% mortgage.
If you do buy for £90k, you can only borrow 125% of that amount, ergo £112,500.

Yes, that's the part that confused me. If the broker said 125% mortgage, I think he meant you can buy a house up to £108k, with a mortgage of £135k (this would be a 125% mortgage on the purchase price of £108k). I.e, this is the biggest mortgage you can get, or you can have one up to this amount.

If the lender will "only" lend 125%, the biggest mortgage you could get on a 90k property is £112,500. What you were suggesting was a 150% mortgage (135/90) which I think even Northern Rock may not like...