Mortgage Payments

leaht1988

Hello

Me and my partner have recently put a deposit down on new build property. The property is not due to be build until late November.

My parents are going to be mortgaging the house for us to save embarresing credit checks etc.

The property is £195,000. We have £20,000 deposit.

I am just wondering what sort of monthy repayments we'd be looking at? I have run a few calculators which come back at about 990 pm. Other than raising a larger deposit, is there any way of reducing the payment pm?

Thanks v much for your help.

betmunch

leaht1988 wrote: »

My parents are going to be mortgaging the house for us to save embarresing credit checks etc.

I dont get this bit.

Anyway, in answer to your question:
If you have a longer term then the monthly payments will be lower, but the overall interest paid will be higher

kingstreet

Three factors affect the price you pay for a "mortgage", the amount, the repayment term and the applicable interest rate.

If you can't alter one, ie the amount, you have to alter either two and/or three, the term and/or the rate.

If you are getting this interest-free from parents, only the term can be altered.

I'm assuming you have interest to pay at 4.7%. For example, £175,000 over 25 years at 4.7% = £993 per month. Keeping the amount and rate the same, increasing the term to 30 years reduces the monthly cost to £908.

As betmunch says;-

£993 x 12 x 25 = £297,900
or
£908 x 12 x 30 = £326,880

so the longer term, if left to run unaltered, will add £30k to the overall cost!

blueberrypie

leaht1988 wrote: »

My parents are going to be mortgaging the house for us to save embarresing credit checks etc.

If the plan is that the mortgage will be in your parents' names and you will make the repayments, you will, from a legal point of view, be tenants - and your parents will be landlords. Please look into this carefully. It will affect the kind of mortgage your parents need to look for, the kind of insurance you and they need, their legal liabilities regarding maintenance and safety, their tax position...

Thrugelmir

You need to consider carefully all the tax implications of the transaction you are proposing. Rent, CGT etc

How old are your parents? As the mortgage may well need to be repaid within their working lifetimes. Unless they are able to prove a significant post retirement income.

shortchanged_2

Look leaht1988, it sounds as if you can't really afford this house and don't forget interest rates are very likely to go up in the future.

Do you have any children? If not and are you are considering them in the future don't forget that they are a considerable expense to factor in as well.

Also did you not consider how much this size of mortgage was going to cost you each month BEFORE you put a deposit down!!

Suarez

shortchanged wrote: »

Look leaht1988, it sounds as if you can't really afford this house and don't forget interest rates are very likely to go up in the future.

Exactly what I was thinking...

Ps. Is your username to do with the change from the coffee shop? haha