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Mortgage advice
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Tykva
Posts: 112 Forumite
Hello everyone!
We want to decide in advance what we can afford in terms of interest rate/house price/ should we stretch ourselves or not. We contacted bank we have an account with and mortgage broker, both of which could only say the amount we would be able to borrow, none of the rest (no interest quote). I had a look on some best- buys on Internet and think they are still high which I suppose were for low deposit/bad credit history customers.. My brother in law got a tracker 4 years ago, on which he currently pays 0.7%. Of course in ideal situation we would like to get something similar but at least still lower than best buys on the Internet.. but our case isn't usual either. My husband has shared ownership property worth 85K which he inherited, I have savings of 100K, which we would like to use as a deposit. Im looking for a job, husband got a permanent job which he started on Feb 10, 2014. He was doing studies prior two years. As we understand the most we can get is 100K and with most lenders after a probation period only. We dont have any other loans/credit cards or car/dependents. I haven't got a credit history as I moved to the UK recently and my husband's credit score is 975. Is it better to wait until finish of probation period to get a better deal? Will we be considered first time buyers or home movers? On another hand prices are rising and so might interest rate. Within the area we are looking property for we can either get something we want for 250K or stretch ourselves for 280K. Will interest rate be higher if we stretch? We kind of need overall advice guidance so that we plan and know what we do before we actually decide on a property itself. Thank you!
Kingstreet, thanks for advice! I deleted this text from that thread.
We want to decide in advance what we can afford in terms of interest rate/house price/ should we stretch ourselves or not. We contacted bank we have an account with and mortgage broker, both of which could only say the amount we would be able to borrow, none of the rest (no interest quote). I had a look on some best- buys on Internet and think they are still high which I suppose were for low deposit/bad credit history customers.. My brother in law got a tracker 4 years ago, on which he currently pays 0.7%. Of course in ideal situation we would like to get something similar but at least still lower than best buys on the Internet.. but our case isn't usual either. My husband has shared ownership property worth 85K which he inherited, I have savings of 100K, which we would like to use as a deposit. Im looking for a job, husband got a permanent job which he started on Feb 10, 2014. He was doing studies prior two years. As we understand the most we can get is 100K and with most lenders after a probation period only. We dont have any other loans/credit cards or car/dependents. I haven't got a credit history as I moved to the UK recently and my husband's credit score is 975. Is it better to wait until finish of probation period to get a better deal? Will we be considered first time buyers or home movers? On another hand prices are rising and so might interest rate. Within the area we are looking property for we can either get something we want for 250K or stretch ourselves for 280K. Will interest rate be higher if we stretch? We kind of need overall advice guidance so that we plan and know what we do before we actually decide on a property itself. Thank you!
Kingstreet, thanks for advice! I deleted this text from that thread.
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Comments
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The interest rate is based on the LTV (LTV is mortgage as a percentage of the purchase price. eg £100k purchase price and a £70k mortgage would be 70% LTV). The lower the LTV the better the rate.
You are not going to get an interest rate of 0.7% in a million years, there is a reason your brother in law has that rate but its not something you can get now.
As a very rough guide:
A 90% (of the purchase price) mortgage you would be looking at rates in the region of 4%.
A 75% mortgage you would be looking at rates in the region of 2.5%
A 60% mortgage you would be looking at rates in the region of 2.1%
Those rates are all ball park figures and you may be eligible for lower rates or likewise you may not be eligible for rates similar to the above - it would depend on your cirucmstances (thats my get out clause).
As for how much you can borrow, it will depend on your circumstances but i tend to work to the tune of 4x income although upto and beyond 5x can be achievable in certain circumstances.
But it would all depend on your circumstances. Its probably worth sitting down with a broker.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Do you have permanent right to reside? Are you on a visa?
Are you able to be party to the mortgage? If not the deposit being yours will be an issue.
There will also be many questions asked about the deposit especially if it has come from another country. Which country is it?I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
The interest rate is based on the LTV (LTV is mortgage as a percentage of the purchase price. eg £100k purchase price and a £70k mortgage would be 70% LTV). The lower the LTV the better the rate.
You are not going to get an interest rate of 0.7% in a million years, there is a reason your brother in law has that rate but its not something you can get now.
As a very rough guide:
A 90% (of the purchase price) mortgage you would be looking at rates in the region of 4%.
A 75% mortgage you would be looking at rates in the region of 2.5%
A 60% mortgage you would be looking at rates in the region of 2.1%
But it would all depend on your circumstances. Its probably worth sitting down with a broker.
Thank you, ACG!
SO is my understanding right that probation period doesn't really affect the interest rate? In terms of brother in law - its to do with the salary? (I would like to understand it for future, how the system works)
Yes, we don't mind sitting with the broker to discuss if we find a good one.0 -
Do you have permanent right to reside? Are you on a visa?
Are you able to be party to the mortgage? If not the deposit being yours will be an issue.
There will also be many questions asked about the deposit especially if it has come from another country. Which country is it?
Yes, Im on a leave to remain visa. I hope I can participate, what is the eligibility criteria?
I have checked on several websites, seems like there shouldn't be a problem with my savings. In any case I wonder why there should be, it doesn't make sense to me. What sorts of problem do you think there might be? Thank you!0 -
Probationary period does impact on which lenders are available so indirectly it has an impact on what rate you will pay but it will not have a huge impact.
As for the rate, if you took a mortgage out before around 2008 they had a follow on rate of x% above the bank of england base rate. So when the bank of england base rate dropped so did the follow on rates people paid.
That is still available however now banks have put a clause in saying it will not drop below a certain rate OR the follow on rate is a lot higher (ie instead of being 0.2% above the bank of england base rate, it will now be 3% above the base rate). Its nothing to do with credit score/incom or anything you have any power over, its to do with the contract that was in place when taking out the mortgage.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
What is "leave to remain" visa? Is it indefinite leave to remain?0
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Yes, Im on a leave to remain visa. I hope I can participate, what is the eligibility criteria?
I have checked on several websites, seems like there shouldn't be a problem with my savings. In any case I wonder why there should be, it doesn't make sense to me. What sorts of problem do you think there might be? Thank you!
If you are not able to go on to the mortgage then you providing the deposit and residing will cause issues and not be accepted.
Which country did the money come from?I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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