Borrowing, do you use the whole amount?

Alphamare

We can borrow up to 180000. We don't think we want to do this.

Do you borrow the full amount offered? How did you decide, dud you set a limit you were comfortable with or did you view properties up to your max and then decide?

We are not sure at least for now that we even want to go over the stamp duty threshold.

If we went for this a mortgage term of 30 years is exactly the same as we pay in rent. Should we over pay(planning on it) or shoulder shorten the term and over pay?

gazfocus

Alphamare wrote: »

We can borrow up to 180000. We don't think we want to do this.

Do you borrow the full amount offered? How did you decide, dud you set a limit you were comfortable with or did you view properties up to your max and then decide?

We are not sure at least for now that we even want to go over the stamp duty threshold.

If we went for this a mortgage term of 30 years is exactly the same as we pay in rent. Should we over pay(planning on it) or shoulder shorten the term and over pay?

For us, we decided what sort of house we wanted to buy, decided what LTV we wanted to achieve, and then worked on our deposit. We wanted a house that in our area costs around £180,000. We wanted to achieve a 75% LTV so we needed a mortgage of £135,000. Our AIP came for £144k so we're below our maximum but that wasn't necessarily a driving factor.

It really depends on what you have in terms of a deposit and what LTV you want to aim for (the lower the LTV, the better the interest rate).

In terms of overpaying, it's probably best to go for the longer term and overpay because if anything happened and money became tight, your 'minimum payments' would be more affordable.

Alphamare

We are aiming for a ten percent deposit as we want to get on the market sooner rather than later, so by the end of this year. If we stay on the lower end we could afford to go now otherwise as we go up the budget we will have to wait a few months to save the rest of the deposit.

Mrs_Z

So far we have never borrowed the max. We've always worked out our finances on a scenario whether we could still afford the mortgage + bills if one of us lost their job.

bluep

When I went to a couple of mortgage lenders recently, they were willing to lend up to £350k more than we were looking to borrow based on our salaries so we were nowhere near the max.

We decided on what range we had for buying based on the area we wanted, rough size of house we wanted (making some compromise), not wanting a really high monthly payment and leeway incase one of us had an issue work-wise. This is allowing us to save as monthly per month as we pay on a mortgage.

We went for a longer term mortage (offset) so that we can offset our savings and overpay if we want to but have the flexibility that if we NEED not to for a few months or want a special holiday etc... then we can.