MORTGAGE ADVICE please

JoeK_3

I have been following your thread with interest. Reading between the lines I could see that you were extremely concerned about your ability to repay such a large mortgage on your income.

If you do decide to go for this new property, may I suggest that you consider the following:-

1) An interest only mortgage for the next five years until your partner goes to work.
2) Keep the £18,000 in reserve in case of emergencies and invest it into cash ISA's over the next financial years. (April 05/07 - April 06/07)
3) Take out a good Accident & Sickness policy on your life to guarantee your income.
4) Take out a good fixed rate mortgage for 5 years until your partner is able to go to work.

Hope this helps

JoeK

homer_j_3

JoeK wrote: »

I have been following your thread with interest. Reading between the lines I could see that you were extremely concerned about your ability to repay such a large mortgage on your income.

Reading between the lines hehehehehe - I got that from the first sentence of the post... I am just that way out tonight lol..

mayb_2

Buying a house is something of a game of nerves and sometimes being worried about losing a house leads you in to paying more than you may have to. If this is the second house in the same street at a lower price than 2005 it is probably a reflection of the market. You can make an offer for the full asking price subject to survey and then look at the valuation placed on it by the mortgage company. If this comes in lower then you can make an offer based on that. If you are worried about a big mortgage as you obviously are, you need to know that you are paying the right price or you will forever regret the cost.

Having said that I once paid over the valuation price and more than I could really afford for a house in much need of refurbishment and no money left to do it. In the end I pocketed the increase in value after doing it up over many years, we got to live where we wanted and our kids grew up in a good area for schools etc. It isn't all about the price I suppose.

JoeK_3

homer_j wrote: »

Reading between the lines hehehehehe - I got that from the first sentence of the post... I am just that way out tonight lol..

Hey, don't knock it! At least we agree on something but I told him. LOL

JoeK

herbiesjp

back2square1 wrote: »

I have entered all honest figures into budget planner and did it worst case scenario. It came up with being £150 in credit pcm.

As our children are fairly young it would be another 5years and then my OH could work fulltime but then looking at it relatively our children will have bigger appetites plus want more expensive clothes and items in 5yrs time too.

Also I don't know if I am being really stupid but don't the agents take you more seriously if you have mortgage agreed in principle? I am aware that doing so will affect credit score which is why I left it until we had found the right property.

£150 pm is not a lot left over at the end of the month especially with 3 children - unexpected expenses could quite easily eat into that amount.

The fact you have found a cheaper property, so lower mortgage, will help with the affordability scenario.

If you do not like the look of an interest only mortgage, you could always look at a repayment mortgage but over a longer term, say 30 or 35 years instead of 25 years. You could then change the term back down as and when you want to e.g. if OH gets a new job etc and you feel comfortable reducing the term back down (otherwise you could make overpayments as and when you want and it will reduce the mortgage term that way)

HTH