how much can and should I borrow?

fimonkey

Hi All.

I'm moving closer and closer to making the crunch (house buying) and would appreciate your advice...

I will be a first time buyer...

AT this very moment I have 12K debt (made up of 8k loan, rest on credit cards at 0% for year) and 5K savings, and am due to inherit 40K from sale of late mum's house (accepted offer, sale proceeding).

I earn £29805p.a.

1. Can I see a mortgage advisor now with my current financial situation, or should I wait until money is in the bank and my debt paid off? (Would my current level of debt affect my AIP/amount I can borrow even though it's due to be paid off)?

2. I want to pay off my debt which would leave me 33k (40k - 12k + 5 K savings). However for purposes of buying etc, I don't want to put my every last bean into the price of a shed, so I want to keep 3K in savings. that leaves me 5K for fee's etc and 25K for a deposit.

3. Based on 2, what could I borrow and what would the repayments be? I'm looking at a repayment mortgage: -
a) fixed for either 3 or 5 years (what would ppl recommend)?
b) With lowest interest rate -obviously-but would it be worth me paying a higher arrangement fee to obtain this?
c) with no early redemption charges (and what are the other stealth charges they get you with)?

Many thanks in advance

Fee

herbiesjp

Hi Fee

YOu can indeed go now and talk to a broker - any figures will be based upon the scenario that you give to them i.e. so looking to clear the debts.

Any AIPs that you go for will be able to take that into account

Having a safety net is always a good idea, so you should always keep some money aside if at all possible.

You can look at up to 5 times your income depending on your credit score with the lender, and which lender it is. The bst mortgage for you will need to be based on your individual circumstances, so you owul dneed to look at it from your own perspective as to what you want from the mortgage, and what you want to be able to do

There are no other stealth charges really, as everything is disclosed on the Key Features Illustration

HTH

fimonkey

Thank you, IN terms of seeing a mortgage advisor, I know the bit about them being whole of market etc, what other credentials should I look for?
(ie, what qualifications should they ideally have, who should they be regulated with/any professional bodies they should be a member of? What kind of insurance should they have if they're self employed? Better to see a self employed or one who is a member of a bigger company)?

by 'stealth' charges, ... I know some lenders charge a higher arangement fee in exchange for a lower interest rate over the term of the mortgage, but I'd only be interested in the savings over 5 years (that's the maximum I'd fix for, and then look to re-mortgae, so comparing figures for the whole terms of the mortgage as in the key facts document doesn't really eem helpful). Would an MA be able to illustrate this? ... also, aren't there extra charges with some lenders for leaving after the 'fix' period, (ERC??0 and there's another charge which I've forgotten (anyone?)

Many thanks, ALL advice appreciated

fee

herbiesjp

Fee free may be another option to look at

If they are not qualified they should not be in business. All advisers will be registered with the FSA. And they will have their own professiobnal indemnity insurance.

I'll be biased, but I belive you will get a better service from a self employed adviser as opposed to a large company. YOu will get the personal touch I believe, and not be treated like cattle just being pushed through to hit the sales targets of a big company

HTH

fimonkey

fee free in terms of the mortgage or the actual mortgage advise? If former, do you mean fee free in that there are no set-up/arrangement fees and no ERC (and other charges). Aren't these mortgages then more expensive in terms of the interest rate?

herbiesjp

Fee free in terms of the mortgage adviser

In terms and rates and fees for the mortgage - they will need to be looked at in conjunction with the adviser to see which would work out best for you