FTB - Mortgage expectations?

Supreme_2

A mortgage for me is approx the same as renting (if i ignore the huge deposit ).

sammyjammy

callmechar wrote: »

Similar situation, FTB with fiance, looking for property in region of £200k (5% deposit so far, still saving and/or considering 95% mortgages). We earn £46k between us. Only debts student loan and childcare, £130 a month.

I too would prefer 25 year mortgage, will remortgage in a few years when more equity then can drop down to 25 years or equivalent

Do people really still work with that assumption that they will have equity in their house five years after buying and that the value will only ever go up?

What if you are in negative equity at the end of that five year fixed rate, what then? The amount of the loan that you will have repaid in that time would be negligible.

callmechar

sammyjammy wrote: »

Do people really still work with that assumption that they will have equity in their house five years after buying and that the value will only ever go up?

What if you are in negative equity at the end of that five year fixed rate, what then? The amount of the loan that you will have repaid in that time would be negligible.

Yes because we are planning on somewhere that needs work and we will overpay what we can eg any overtime etc. I would assume that we would have added value in 5 years - if not then see what we can do with what we have got

wackorash84

callmechar wrote: »

Similar situation, FTB with fiance, looking for property in region of £200k (5% deposit so far, still saving and/or considering 95% mortgages). We earn £46k between us. Only debts student loan and childcare, £130 a month.

I too would prefer 25 year mortgage, will remortgage in a few years when more equity then can drop down to 25 years or equivalent

To be honest, any FTBs should take the 30 years option if you could since it reduces your monthly 'fixed' mortgage obligation. All mortgages seems to come with a yearly allowable repayment of 10% of the value of the mortgage without any penalties. Therefore, you could make extra repayments whenever you can.

Since there all a lot of other cost that a FTB needs to consider, this will ensure an FTB will have some breathing space in the first few months and then start overpayment when they are settled down. Also if the unthinkable happens and you have difficulty meeting the mortgage repayments at least you are aiming to pay a lower monthly mortgage obligation.

Just my 2cents as a FTB myself.