Graduate Mortgages

rover_blue

Hi there,

Firstly thanks to everyone who has posted on here its all been great help to me in understanding mortgages. I am a graduate FTB who has agreed to buy a terraced house for 100k and am now at the point of deciding on a suitable mortgage. In summary...

- 21k salary (on completion of grad scheme in Dec 2007 this will increase)
- 5k deposit
- no additional income / overtime (girlf may move in and help with bills)

After reading through this forum, various websites and advice of other graduates in my position I think that the following is what I would like...

- Fixed Price (so i know my payments for first few years)
- 100% mortgage (so i can use the 5k to update the house as it requires modernisation)
- Low payback in first few years whilst still on the graduate scheme

The package that friends have gone with is the HSBC Home Start mortage which is aimed at grads (3yrs interest only then changes to capital +interest). This looks really good and suited to what I want, the only thing is their interest rate is quite high at 6.19% (£499 booking fee).

I was wondering if anyone knows or could recommend similar packages that I could look into?

Many Thanks,
Rover_Blue

MortgageMamma

Hi Rover Blue

Firstly, you may not need a graduate mortgage, there are plenty of 100% mortgages available and there may be some more competitive

Secondly HSBC are reputedly stopping offering 100% graduate mortgages

You say you have a 5% deposit, are you now planning on using this for furniture etc? could you not use it for deposit and then save for household items? its always better start out paying a deposit if you can

MM

rover_blue

Hi MM,

The 5k was going to be for some improvements to the house it needs

- A shower
- New Kitchen
- New Bathroom
- Central Heating
- General Decoration
- Furniture/Applicances (some of which will be donated/borrowed to start with)

Its perfectly habitable 'as is' (bar the lack of shower) so the idea was to move in and do these areas up over time and add value to the house (others in that row of terraces are going for 115+).

I have a meeting with the HSBC mortgage advisor on Thurs morning so will find out the finer points and post here. I would definately be interested in some similar deals if you could point me in the right direction?

Thanks,
Rover_blue

MortgageMamma

Of course I can I'm a whole of market broker! (that means I have access to all lenders, not just one)

If you give me more specific details I can have a look for you and I'm sure the other advisers on here will help you too

rover_blue

So i went to see the mortgage advisor at HSBC and as of last Monday they officially stopped the 100% grad mortgage its now 95%. So this means I will need to use my 5k as a deposit either way :rolleyes:

It still looks like a good mortgage that is suited to my needs (low payments at first then ramps up after 3 yrs). Their fixed rate they offered me was 6.39% with a 499 booking fee.

So I'm now just after a 95% fixed rate mortgage for a property worth 100k. Anyone got a similar one lately that I could check out or recommend anyone they have gone with?

Thanks,
Rover_Blue

meanmachine_2

You could try Nationwide BS 5.88% 2 yr fix, 95% LTV, fee £499.

TO be honest, there are loads of much better 95% deals than the one offered to you by HSBC.

This whole "graduate" thing is a load of nonsense really. You don't get preferential treatment, but are made to feel like you are.

JoeK_3

Try Scottish Widows & Standard Life Banks.

JoeK

Leon_W

Joes' suggestions above are worth researching especially Scottish (Scittish ?) Widows who for some reason beyond me seem to like graduates at 100%. I say beyond me as when I come into contact with most of them they usually want the earth and pay nothing for it. Perhaps it's me just getting older although being the wrong side of 40 (just !) isn't old is it ?

Anyway rover, you seem quite switched on so we like you.LOL.

You're always better off putting down a deposit if you can as you'll get a better rate but I understand it is not always possible so just to add to Joes' little list above have a look at Portman. They have a few fixed deals starting off at a shade under 6% for 100% which isn't half bad. The fees are reaonable too.

Regards

MortgageMamma

Keep an eye on the market Rover as there are absolutely loads of rates being pulled and remarkted at present. There is much much better than the HSBC deal for you

LeonW - you grumpy OLD man you! ;-)

MM