First Time Buyer - 5 1/2 Times Salary

JoeK_3

james10999 wrote: »

Thank you for all your comments. To give you a bit more information:

My rate is secured at 5.79% for 3 years with HSBC who recently has a no fees deal in setting it up. I caught the rate just before all the increases and it's over a 30 year term (the maximum they give). If I go back to change it now, the rate will increase to 6.09% - not something i really want to do!

I tried out several Mortgage advisors covering the whole market, with no fee, however no-one was able to give me a decent deal and HSBC don't go through these advisors. I've been with HSBC bank for about 7 years and had a really good relationship with them, hence the large amount I can borrow (111k).

This is a classic case of a fee free mortgage advisor not recommending a lender that will either not accept introduced business or not paying them a procuration fee (introducers fee)

It pay's to consult a fee charging mortgage broker as it's the bottom line that's important.

james10999 wrote: »

The rent a room scheme looks great, but not quite sure how I would write a contract? I guess you can just download them from the internet somewhere?

Google a short term tenancy agreement. They cost around £5

james10999 wrote: »

In regards to my partner, shall I just state down on a piece of paper that she will get all the money back she pays in to the mortgage if we split up plus a proportion of the profits that would be made from the sale? If I get her to sign and date, who do I give this to? Is that enough?

I would warn you against a diy job as it could cost you more to unravel this at the time of a split.

james10999 wrote: »

After reading everyones points, I have had a quote for mortgage protection insurance and I will be taking this up. it's only £10.64 a month so I guess thats worth it.

What king of mortgage protection is this?

james10999 wrote: »

I know age isn't an excuse, but i'm only 22 and a bit concerned about the vast debt i'm going to be in!

I think you have done a good job so far!

JoeK

james10999

JoeK wrote: »

What king of mortgage protection is this?
JoeK

I've used "Best Insurance" as they reccomended by this site:
http://www.bestinsurance.co.uk/index.asp?siteID=906#

For a monthly mortgage payment of £665, at 22 years old, it works out as £10.64 a month. I've been looking else where to try and reduce this, but no-one comes close. They pay out from day 1 as well which an added benefit.

Just the life assurance now, but i've already got a quote for £6 a month using Cavendish.

I really thank you for your help Joe!

What I can't understand really is why people go through mortgage advisors when you can search for the best deal yourself on moneysupermarket or tips from this forum, or even going through that website that you can get cashback for ordering your mortgage through them! You can also order all the insurance products yourself - so why the need for mortgage advisors?

I guess it's if it gets more complicated?

JoeK_3

It might look easy but the insurances that you have sourced and arranged, are only as good as when you make a claim.

Will they pay?

As mentioned in my previous posts, DIY can be dangerous, as it can cost people more in the long run.

Take care!

JoeK

james10999

JoeK wrote: »

It might look easy but the insurances that you have sourced and arranged, are only as good as when you make a claim.

Will they pay?

As mentioned in my previous posts, DIY can be dangerous, as it can cost people more in the long run.

Take care!

JoeK

Thanks for the tip JoeK - I have reserached into the details of these products and all seems to be in order. Looks like they will pay out for the circumstances I need.

The main aim now is to get the biggest pot of money together that I can over 3 years so as soon as the fix rate ends, I can cut a huge chunk off the mortgage and lower the repayments as I'll be able to fix it for 30 years again then.

StevieJ

JoeK wrote: »

It might look easy but the insurances that you have sourced and arranged, are only as good as when you make a claim.

Will they pay?

As mentioned in my previous posts, DIY can be dangerous, as it can cost people more in the long run.

Take care!

JoeK

Yes it is that easy, and almost certainly a lot better value.
You will be suggesting we go through a financial advisor to get car insurance next.

JoeK_3

StevieJ wrote: »

Yes it is that easy, and almost certainly a lot better value.
You will be suggesting we go through a financial advisor to get car insurance next.

A lot of people do use brokers to arrange car insurance for them!

With the Internet being used more and more, many people have reverted to DIY mortgages and insurances, etc. and whilst this is good and commendable often they fail to read the small print, which is often the job of the mortgage or insurance broker.

As a consequence of some DIY purchases, we hear horror stories of people being locked into massive redemption penalties as high as £8,000 in some instances or having to stay with a lender in their standard variable rate for a number of years and costing them £0,000's unnecessarily.

We hear of insurance companies that won't pay out on insurance claims such as critical illness, car bumps, no courtesy car, etc.

A professional is there to stop all these horror stories happening, as they will often know the best mortgage products to suit an individual, they know the intricacies of insurances and know which policy is the most suitable.

Getting advice from a professional is not just about form filling but relying on their expertise.

Next we will be having DIY court cases on the Internet.

JoeK

james10999

StevieJ wrote: »

Yes it is that easy, and almost certainly a lot better value.
next.

I agree with you there Stevie - I think if you reserach Mortgages and the insurance products as well as reading these forums, you should know what products you are after and what will suit you. I have saved loads wby using online Solicitors, Going through cashback sites as Quidco for Home insurance & Car Insurance and dealing with my mortgage directly to get the best deal.

I think people should use a financial advisor when they haven't really reserached the products well enough or would like someone else to take the responsibility away from them.

Anyway, with my mortgage through HSBC, they don't deal with ANY brokers as all customers have to go to them direct. As HSBC were the only bank offering me a 1/2 decent rate at the money I wanted to borrow, I went down this route. I think it's been a wise decision.

Next i've got to think about getting a Kitchen for £2.5k including fitting - thats going to be even more of a challenge!

homer_j_3

i agree with some aspects of your post james - Searching for home and car insurances through the internet can often be very cost effective.

Life cover and insurances that you are using to protect your mortgage and income are a lot more complex than car and buildings and contents insurance - afterall you might be slightly inconvenienced by your car insurance not having a courtesy car included if you thought it did when you bought the insurance. Its not the end of the world as you could rent a car for a few days.

If you buy lifecover and its a reviewable premium rather than a guaranteed premium - what seems like a good premium may turn out to be not so good in a few years down the line. If your cover doesnt have any cover which allows you to increase the lifecover without further underwriting to cover future house moves - You may have to completely be underwritten again at an older age which means that it is more expensive too.

Take critical illnesses - not all policies cover the same illnesses - some offer free child cover, some dont. Some have excellent claims history some have terrible claims history.

Income protection can sometimes be cheaper through building into your life cover than taking out these Accident Sickness/Payment Protection polices. Payment Protection policies can often stop paying out after 12/24 months where income protection policies can continue until you return to work regardless of time.

If you get it wrong, it can be very expensive long term not short term. You renew your general insurances on a yearly basis and it is vey much an industry that is premium driven and not benefit driven. Where you life and income can be seriosuly affected, is it worth doing a DIY job and risking it.

Sometimes cheapest isn't best especially as far as scuba gear, parachutes and mortgage protection goes!

Well done on your ability to fing a good mortgage and in finding a kitchen that can be fit for £2500.

msaquib

you can get an free tenancy agreement from

http://www.propertyhawk.co.uk/index.php?page=propertyManager#

MS

james10999

Thanks for your comments.

I'd like to say at this stage - my partner is a "he" and we've been together for 3 years. His name could not be put on the mortgage because of CCJ's in the past as we tried to have a joint mortgage and they would not allow this.

However he will be paying 1/2 of the mortgage and any bills we will split. As he is not offically as the mortgage, would this be seen as extra income?