'Strange' advice from Mortgage Advisor re Interest Only Mortgages

Yellabowley

What I'm saying is, it isn't HIM that I don't trust. Switching advisers wouldn't solve the issue. I simply found some information which appeared to directly conflict the information he gave me. I know that comparison sites use a lot of assumptions in their calculations and so the purpose of the post is to clarify if the advice I am getting is sound, drawing on the expertise of people within the forum to do so.

Apologies if my post was somewhat ambiguous. I thought I had made my question and the reason behind it quite clear.

Thrugelmir

Yellabowley wrote: »

switch to capital and repayment but based on a lower loan to value and therefore better rates.

Rates are going to rise at some point in the future. There's no guarantee what level interest rates will be in the future.

Idiophreak

Thrugelmir wrote: »

Rates are going to rise at some point in the future. There's no guarantee what level interest rates will be in the future.

...but you can pretty well guarantee that a lower LTV will yield a better rate...

Thrugelmir

Idiophreak wrote: »

...but you can pretty well guarantee that a lower LTV will yield a better rate...

Also depends on the wider property market as well. So many variables. Lenders base their decision on the known factors as they stand today.

Yellabowley

I meant relative to a higher LTV but point taken.

I estimate that with the improvements and extensions we plan to make combined with even a slow rise in the market, the value will end up somewhere around £170k in 3 years time. If we were to go interest only for those 3 years we'd be looking to remortgage on a 70% LTV rather than the 85% we're currently looking at.

Based on the above advice we may be looking at plan B now anyway.

Thanks to everyone for the advice anyway.

ACG

Typically to get interest only the property needs to be valued at around £300k with around 50% equity.
Some require a minimum income of around £100k and or for you to be a professional.

with regards to the comparison sites, the devil is in the detail. So go on to the lenders website and have a look at criteria with regards to interest only, that is where you are likely to find it does not fit. Offering a product and being eligible for it are very very different.

I would not want to say it cant be done but if you came to me wanting an interest only, I would not sit there and do the research at 85% LTV as I would not be confident that there is a solution out there.

Yellabowley

ACG wrote: »

Typically to get interest only the property needs to be valued at around £300k with around 50% equity.
Some require a minimum income of around £100k and or for you to be a professional.

with regards to the comparison sites, the devil is in the detail. So go on to the lenders website and have a look at criteria with regards to interest only, that is where you are likely to find it does not fit. Offering a product and being eligible for it are very very different.

I would not want to say it cant be done but if you came to me wanting an interest only, I would not sit there and do the research at 85% LTV as I would not be confident that there is a solution out there.

That's brilliant cheers and ties in with the advice I was given. Exactly the sort of response I was looking for.