Buying First House

F1rstTimeBuyer

Hi. Hoping someone could settle my anxieties. I've got a mortgage promise from the Halifax and had an offer accepted on a house, I'm planning on borrowing 113k on a 5% deposit 2 year fixed deal. Got word that the surveyor has been instructed and that should be complete within a few days.

I'm doing this alone so obviously it's a huge decision to make (i have family and friends for advice but buying solo). I'm late 20s and hoping this is the right time to get on the property ladder. The initial interest rate is 5.6%. I'm apprehensive about the thoughts of the rates rising and being met with higher monthly payments.

Due to it being a 5% deposit Halifax have told me in a few years my LTV will be 92% so "no one else would touch me". I'm planning on saving for overpayments so that i can pay a chunk off the mortgage before my current deal ends.

Has anyone suffered the same anxieties or thoughts? I feel like i'm overreacting but this is one of the biggest decisions i will ever make. Everyone tells me it is the right one. Any views or opinions would be appreciated.

kingstreet

F1rstTimeBuyer wrote: »

Due to it being a 5% deposit Halifax have told me in a few years my LTV will be 92% so "no one else would touch me".

Provided it is still available at the time, HTB - Mortgage Guarantee is also available on remortgages, so what they have told you isn't accurate.

kasperblue

Congratulations!. Try not to worry too much. I think everyone is really anxious when they buy their first property (and most of the ones after) but you have to take it one step at a time. No one can predict exactly what interest rates are going to do or what might happen in two years time - but I would make sure that you feel comfortable that you can afford the mortgage right now and if it goes up 1 or 2 %. Its a good idea to put some extra money away if you can - having a 10% deposit/equity always put you in a better position moving forward and will give you more options.


If you feel confident with the sums then just sit back and give yourself a bit pat on the back for buying your first home....and pour a glass of wine and relax :-)

F1rstTimeBuyer

kingstreet wrote: »

Provided it is still available at the time, HTB - Mortgage Guarantee is also available on remortgages, so what they have told you isn't accurate.

Yea i didn't like when they said that to be honest, made me feel a little bit under pressure. Hopefully i'll be able to save enough to take me under the 90% LTV bracket

F1rstTimeBuyer

kasperblue wrote: »

Congratulations!. Try not to worry too much. I think everyone is really anxious when they buy their first property (and most of the ones after) but you have to take it one step at a time. No one can predict exactly what interest rates are going to do or what might happen in two years time - but I would make sure that you feel comfortable that you can afford the mortgage right now and if it goes up 1 or 2 %. Its a good idea to put some extra money away if you can - having a 10% deposit/equity always put you in a better position moving forward and will give you more options.


If you feel confident with the sums then just sit back and give yourself a bit pat on the back for buying your first home....and pour a glass of wine and relax :-)

Thank you. Yeah i'm happy enough with the figures now. I feel i could save enough as well to pay off more. Exciting time but anxiety takes over...

andilong1

I'm not sure if it's just me or a general rate on the HTB from Halifax ? but my fixed rate for 2 years is 5.5% or something like, after that i will be put on the Halifax SVR which is currently around 2% lower than this.

With that in mind, interest rates would have to rise a full 2% in that period to just catch up what i will be paying anyway. I'm not saying it wont happen because obviously nobody knows, however equally you don't know what your salary will be in 2 years ?

So i guess you just have to decide if you want to take the biggest gamble of your life on the basis of 2 largely unknown factors, the same gamble taken by thousands of people every year.

F1rstTimeBuyer

andilong1 wrote: »

I'm not sure if it's just me or a general rate on the HTB from Halifax ? but my fixed rate for 2 years is 5.5% or something like, after that i will be put on the Halifax SVR which is currently around 2% lower than this.

With that in mind, interest rates would have to rise a full 2% in that period to just catch up what i will be paying anyway. I'm not saying it wont happen because obviously nobody knows, however equally you don't know what your salary will be in 2 years ?

So i guess you just have to decide if you want to take the biggest gamble of your life on the basis of 2 largely unknown factors, the same gamble taken by thousands of people every year.

Yes same deal as you, i did think that when the deal ended i'd be saving, then if the rates go up 2% you are quite right that i wouldn't be paying much different. It's a gamble either way. Wait for another few years then purchase or go for it now. How long have you been with Halifax? Do you find them good? I've heard they are good to new customers but when it comes to existing they don't go out of their way for new deals (part of the reason i want to be able to shop around end of deal time).

kingstreet

Halifax SVR is 3.99%, so more like 1.5% between that and your fix.

I don't see interest rates rising that much in the next two years, but your LTV in 2016 is not gong to leave you many options even if HTB - MG is still available.

You need to get down below 90% as soon as you can.

F1rstTimeBuyer

Does anyone know the process if further on down the line i decide to take in a lodger?

snowscreamer

If it's your own home, subletting is absolutely fine. If you own it freehold, you can just go ahead but if its a leasehold property you'll need permission from the freeholder (check the lease).
Subletting is a different kettle of fish to letting the whole property which would need the mortgage company's permission.

kingstreet

Having a lodger isn't sub-letting.

If you take in a lodger some lenders do require you to obtain a consent form, check with yours. See page 31 of the pdf attached in the case of Halifax, where permission will be required;-

http://www.halifax-intermediaries.co.uk/pdf/halifax-mortgage-conditions_10_.pdf

When you must ask for our permission

You must get our permission before you
do any of the following things relating to
the whole of your property, or any part
of it;-

Give up possession of your property
or give someone (for example, a paying
lodger) a right to occupy all or part of
your property.