5 Ways to reduce your mortgage payments ?, for a NEW property/new mortgage

LittleMissAspie

- buy a smaller property
- buy in a cheaper area
- take a while longer to save a bigger deposit (not only means you can borrow less, but also means you can get a lower interest rate)

kingstreet

gemmaking wrote: »

Can you give an example of a 'plan'

such as an ISA

and what format is it supposed to be written?
(a piece of paper and pen? lol)

What format? I don't understand the question. Please clarify.

LittleMissAspie

I think gemmaking is taking the word plan literally, as though you sit down and actually write a plan out.

gemmaking, it just means you have to prove to the bank how you are going to pay the mortgage off.

gemmaking

kingstreet wrote: »

What format? I don't understand the question. Please clarify.

kingstreet wrote: »

How much you will pay into such a plan is dependent on your target figure and the term involved.

Some lenders are contacting their interest-only borrowers asking them for evidence of the plans they

this plan you mentioned, they need evidence. What format would the plan be in? for the evidence?

eg- My plan is that I have £20,000 in my ISA account , here is the paperwork statement etc.

gemmaking

LittleMissAspie wrote: »

I think gemmaking is taking the word plan literally, as though you sit down and actually write a plan out.

gemmaking, it just means you have to prove to the bank how you are going to pay the mortgage off.

but can't you can just say ANYTHING (about how you are going to pay the mortgage off)....and expect them to believe you? and bluff them ?

Yes I understand that, how do you prove to them?

or do you need to show them statments of 'savings'?

kingstreet

Right.

They want a statement which shows the current value, together with a projection of the monthly payments and capital values at the end of the term.

gemmaking

kingstreet wrote: »

and capital values at the end of the term.

at the end of the term? the end of the term in 25 years?

financial situations can change within 25 years though, can't they ?
eg, people can lose their job, we don't know that.

kingstreet wrote: »

You are unlikely to be able to get an interest-only mortgage without arranging a means of paying it back. The days of doing interest-only for a few years, then changing to repayment are gone.

so you mean you cant do interest only for 4 years, and then turn to 'repayment'.

so what can you now do? or you can do that,..but with some other criteria ?

somethingcorporate

The value you would need to put into an investment vehicle to repay the mortgage would likely be the same as the cost of paying a repayment mortgage in the first place.

You may as well just rent if you are going for an IO mortgage because that is all you are doing.

grey_gym_sock

lenders can decide what kinds of plan are acceptable to them, and what evidence they want. you may have a plan, but it may not meet their criteria.

they are trying to be cautious, but plans that do meet their criteria can still fail.

what you can't do is now start on (or switch to) interest-only, unless you meet the lender's criteria. switching from interest-only to repayment (if you're already on interest-only) shouldn't be a problem.

mrginge

You're not getting an io mortgage. Even if you did it would cost you about the same as repayment. Forget it. Move on.