FTB Mortgage - Double Mind and Double Troubles

SkippyD_2

Hi All,

Have used this website in the past to learn of how this mortgage process works - some great minds here :beer:

I am currently looking to purchase my first property and have found the following:

1)3 bed semi-detached with schools nearby.
2) It's in a desirable area where property is sought after
3) It needs updating (the works - boiler and all) and have submitted an offer I felt affordable and this looks to be accepted.

If this was immaculate then there is no way I could afford to purchase as a FTB.

Now I am looking into the following:

- Taking a mortgage out with Santander/HSBC
These are currently offering 90% mortgages with different interest rates:

HSBC
2 year fixed @ 4.19% reverts to 3.84% after the term
Arrangement fee - £599

Santander:
2 year fixed @ 4.49% reverts to 4.64% after the term
Arrangement fee - £495

Term - 25/30 years.
Deposit: 10%

Now HSBC looks great, however am worried about their really strict and complained about credit checks. I have no defaults/CCJ, however found it difficult to take out a credit card last year, when I did, the company increased the credit limit as my payments were made on time.

So I am thinking:

Santander means higher monthly payments - having an extra interest rate but at least there is a better chance of securing a mortgage

I do not plan to live here for long - probably 3/4 years - so if I extend my mortage term from 25 to 30 years. This would lower my monthly payments by £60 each month for 2 years and then I could find a better rate on the market - or is this thought just silly?

As when I intend to sell the property I am pretty sure it will sell more than I anticipate to buy and spend on it.

Would the better bet be to just go for Santander with a slightly longer term?

Thanks!

:j

_Andy_

Why do you feel Santander would be more likely to approve the mortgage?

SkippyD_2

Hi,

Great question.

Having looked through some review on this site, I was made aware HSBC are very strict and Santander have a slightly relaxed approach in comparison to HSBC?

I may be wrong but I also have an image of HSBC being overly cautious for FTB.

Also on my profile, e.g. putting down outgoings, earnings and I have no dependents Santander was offering 30k more - although these are just specualtive figures they gave, this gave the impression they are FTB friendly?

I may be wrong but this is the impression I have gathered from reviews

SkippyD_2

bump Any help would be appreciated :beer:

Thrugelmir

SkippyD wrote: »

As when I intend to sell the property I am pretty sure it will sell more than I anticipate to buy and spend on it.

Given the current state of the economy and property market. I wouldn't be overly optimistic. Reducing the debt is the way forward when it comes to building equity. Something which extending the mortgage term will have the opposite effect of.

Do you have any amount of unsecured debt? i.e. credit card. As this will impact your application at the 90% LTV level.

SkippyD_2

Hi,

Thank you for your reply.

Sure, given the current climate I agree to what you have said.

However, in this area, a similar property has just sold for 40k more and that too in poor decorative order.

Now, moving here its not an area I prefer (those are out of my league atm)....but fits into budget, is a respectable area and has great space.

Plan is to spruce it up, live there for 2/3 years and then move on.

I only have a student loan from Student Finance but no unsecured debts at all...