Barclays Springboard Mortgage

pmartin86

Hi

I've been working over the last year to get my financial life back on track, my partner and I currently rent a house and have been saving for a deposit to buy, we've got around the £4,500 mark at the moment and were expecting to save for another year or 2 before we ventured into the market, however the "Barclay's Springboard Mortgage" was brought to my attention last week by my mum, who for all intents and purposes is willing to stump up the 10% required into the savings account.

We've had a look in the area we live and want to live, and we've found suitable properties between the 80-90 thousand mark, meaning our £4,500 is there or there about for the 5% deposit it requires. We've booked an appointment with Barclays next Wednesday to have a chat about it, but I was wondering if anyone knew if they were really a good way to get started? I've done a few basic calculations, and the repayments on 80,000 at their rate for 4.69% fixed for 3 years works out at £453 a month, only £3 a month more than we're paying in rent for the reasonably dated and flawed house we currently rent. I am aware that owning a house comes with extra costs etc and we've factored these into our wages as we WILL be buying at some point, I just want to know if the springboard is a good place to start? My thoughts are that after the 3 years I would then look to pay off a lump sum which Id aim to save over the 3 years and then remortgage at a better rate? I suspect I'd be able to comfortably afford to save £200 a month on top of everything else so assuming the house was 85,000 and stayed approximately the same value, id be in the 80% LTV range.

Any thoughts or advice appreciated.
Regards
Paul

ACG

Before i go into this in too much depth, one thing that popped out at me was:

"To get your financial life back on track"

Does that mean you have a dodgy credit history? Anything more than the odd late payment then you may as well forget the family springboard mortgage. They dont want any adverse.

pmartin86

Credit report is fine. The only slight blemish is a single late payment marker for a credit card about 8 months ago. My credit available is about 20%of my salary and i use about25% that at the moment. If needed I can tighten my belt for a month and clear that though. By back on track is mostly nor paying attention to what I spent, not saving for a rainy day etc. The one late payment woke me up and I've since cleared about 4 thousand of overdraft and credit cards and saved 2, 500 or sotowards a d er posit. The rest coming from my partner.

ACG

OK thats good then. Maybe take a copy of your credit report and just double check with them. I have a good relationship with our account manager there and shes basically said any adverse is a no... but 1 late payment 8 months ago might not be a huge problem.

But im a big fan of the springboard mortgage, its a great innovation. The rate isnt bad and the interest rate on the savings is also pretty good. Ive spoken to a lot of people about it.

moreofthegoodstuff

I believe if someone is willing to help you they have to see an independent financial advisor prior to doing the mortgage. A very good product though for those with a small deposit. You would most probably have to pay for this financial advisors appointment plus solicitor, land registry etc and moving costs. Is £4500 enough?

pmartin86

Thanks for your reply's, the rate is also one of the things that's attracting me, a rough gauge seems to put it on par with a an 85% mortgage anyway.

As for the 4500, if its not enough then there's no rush. We were expecting to have to save for at least another 12 months anyway, in my head I've got a figure of £1,500 for Legal costs/survey etc, I'm not sure how realistic this is? I'm under the impression of needing about £400 for a survey, £200 or so for the land registry office and about £600 for conveyancing fees? Plus an extra £300 to cover the little costs. Unfortunately, Ive not looked into greater details as i expected a much longer time frame in which to do so. That being said, my mum who is going to cover the 10% as savings has also said she is planning to give us some money, in the region of £1000 when the time comes to help with costs etc anyway. By my reckoning, that would mean we would need another £1000 or so to be about there, which wouldn't be too much of a stretch, again, just tighten the belt so to speak for a month or 2 and the remaining debt is gone and the extra cash is in the bank.

As for moving costs, we would be moving to an area fairly local (probably within 20 miles) and we don't have a huge amount of furniture that isn't easily disassembled and put in the car (I have a Ford Focus which has an impressive amount of boot space) and for the stuff that cant go n the car, a local firm hires out transit vans for about £60 a day. All being said and done, moving costs shouldn't exceed £200.

Regards
Paul

moreofthegoodstuff

If you still want to save for a little while why not look at the nationwide save to buy account. Save £50 a month for six months and you can do a 5% deposit, they pay your solicitor fees, basic valuation and give you £500 once it has all gone through. Mortgage fee of £500 can be added to the mortgage. Slightly higher rate but I think it helps as you don't need to have as much saved for the up front costs like the solicitors etc. We have just done this, would love to do the springboard but didn't have someone to help + costs like moving from renting to your own home can be costly because of getting notice periods right and not having to pay for two properties- I needed a bit of money back just in case that happened!

moreofthegoodstuff

Just to add we were quoted £500 for all the searches/land registry. The solicitors cost was down as £650 but we got if for free. Valuation and home buyers report £400-£500 (I had to pay £190 as the valuation was included)

ACG

moreofthegoodstuff raises a good point... whoever lends you the money will have to get legal advice (not financial advice).