what should my mate go for ?

blinko

hi all hoping to get a little advice on this my friend has recently bought a new build 1 bed for 180k she has 100k savings and is earing 15k just wondered what you guys recommend

shoudl she get a offset mortgage or a normal mortgage ? and are the first time buyer mortgages any good ? as i cant see the difference between them and a normal mortgage

herbiesjp

When you say bought, do you mean she put in an offer which has been accepted? Has she put down a deposit?

Has the property been completed?

Has she not looked into mortgages before putting an offer in?

blinko

hi

its a new build i dont think its fully finished yet she has put £1000 reservation down and is getting a lawyer through them which i hate but she wants to do it that way.

she has paid the asking price, the barret homes i think will definately give her a mortgage whatever income shes on just to get the sale through but i reckon she can get a better deal from a bank etc so no she hasnt got a mortgage quote as of yet

herbiesjp

Your friend is looking to get 6.66 times her income

Which lender are they offering, as the choice and rates will be very limited

Has she gone to her own bank?

blinko

hhmm it doesnt look good does it ! how are you getting 6.66 im getting 5.13 i think which is 80/15 ? unless your taking 3k of for some reason in which case 80/12=6.66 thanks but you reckon the offset mortage is the best ? Thanks

herbiesjp

Sorry Blinko you are right

LAte night posting soemtrimes plays havoc on figures - 5.33 times the income.

It can be achieved witha few lendes, but it will depend on the exact circumstances.

As for the offset question - well, offset rates tend to be higher. So if you ar not going to have a large amount of money offsetting your mortgage it is probably worth going for a cheaper "standard" or flexible mortgage and overpay if you want to reduce your mortgage term

HTH

blinko

thanks so i mean if say they get an abbey offset mortgage does that mean they can get any abbey savings product and have the interest paid into the offset account

herbiesjp

If they have an Abbey flexible deal, they can pay funds into a savings pot (not an Abbey account)

They can then benefit from not gaining any interest on the money in the savings pot, but not paying any mortgage interest as the equivalent amount on the mortgage. YOur mortgage payments will stay the same.

Otherwise you can make a capital overpayment, which will reduce the mortgage payment. However then you then borrow back any overpayments that you have made

HTH