FTB Help please

Heythere450

Hi,

So me and my partner have just had a offer accepted for a property

I am seeing the mortgage advisor on Tuesday to sort it all out. Question at the current rates would it be better securing a 2 yr fixed term or 5?i think there's a 0.5% between the 2. After 2 we wouldn't have much equity anyway not enough to be in another bracket. I'd like to know what other people have gone for recently. And also I saw new eu rules about affordability, so come 2 years and we wanted to change is there a high chance of been a mortgage prisoner? If so it would make sense to go for the 5.

Thanks

Heythere450

Also, one more question. Is it possible say after 5 years of fixed term, to get a new deal and extend the mortgage another 5 years so to 35 again?

Sorry I appreciate these are totally amateur questions but I need to know before I go and finalise

Thanks

Contemptuous

Heythere450 wrote: »

Hi,

So me and my partner have just had a offer accepted for a property

I am seeing the mortgage advisor on Tuesday to sort it all out. Question at the current rates would it be better securing a 2 yr fixed term or 5?i think there's a 0.5% between the 2. After 2 we wouldn't have much equity anyway not enough to be in another bracket. I'd like to know what other people have gone for recently. And also I saw new eu rules about affordability, so come 2 years and we wanted to change is there a high chance of been a mortgage prisoner? If so it would make sense to go for the 5.

Thanks

Personal preference and down to your own set of circumstances really. I took out a mortgage a year ago and fixed for five years, because at that point my youngest will be in school and I'll have no childcare costs so can potentially throw more money at the monthly repayments.
Who knows what will happen with the mortgage application process five years from now? Although mortgage prisoners tend to be those in negative equity more than anything.

As long as your age allows it, there's not really any reason why you couldn't extend the mortgage term in the future, as long as you're happy paying more interest.

Heythere450

Thanks for the advice. I think we are swaying towards the 5 years just for stability. We don't mind paying added interest, obviously just a option if we do choose to extend the mortgage we can. All the articles and things I have read online scared me thanks

Kynthia

It's a personal decision. How much extra will you pay over the next two years if you go for the five year deal? How much would you possibly pay when remortgaging in two years in fees, but do you think the rate would be better and would you have moved down a LTV bracket? How much deposit have you put in and if only 5% are you at risk of negative equity in two years should prices fall, when five years should be more smoothed out with price increases as well? In two years are you likely to be in a better or worse financial position when it comes to meeting the mortgage lenders' criteria compared to in five years time (additional/reduced childcare costs, working part-time, promotion, going self-employed, etc)? Can you afford to make the worse financial choice or is your affordability tight so you're happy to pay a little extra for security?


There's a balance of things to consider that are personal to you and the others, like what changes to lending will happen and what rates will be, are unknowns so you hope for the best but prepare for the worst.

Debtslayer

It's very much a personal decision.
We chose a five year fix as we wanted security of the same payment over a longer period and wouldn't have to think about remortgaging until 5 years time which by then we should have a much better ltv.
But everyone is different and some choose 2 years do after 2 years they get to change to hopefully a new low rate.
No one knows what's going to happen with interest rates in the next 2 to 5 years

Flip_Mode_2016

Heythere450 wrote: »

Also, one more question. Is it possible say after 5 years of fixed term, to get a new deal and extend the mortgage another 5 years so to 35 again?

Sorry I appreciate these are totally amateur questions but I need to know before I go and finalise

Thanks

40 year mortgage, that's a long time. I take it you have done all the online/soa calculators and realise how much you will have to pay each month, plus interest rates can only go up in the future. How come you want to extend the mortgage another 5 years in 5 years time (40 year mortgage)? If you are worried about future repayments can you go for a longer fixed rate?

Heythere450

Thanks for all the help.

No, we are not planning on extending the term, I was more curious than anything just incase for whatever we did have to. I think we will go for the 5 year as it's nicely affordable and fairly stable bet

We are both on 22k a year so 43-44k joint for the year. We are putting a 10% deposit down. Does this sound good enough to get a 150k mortgage?

Thanks

Debtslayer

Heythere450 wrote: »

Thanks for all the help.

No, we are not planning on extending the term, I was more curious than anything just incase for whatever we did have to. I think we will go for the 5 year as it's nicely affordable and fairly stable bet

We are both on 22k a year so 43-44k joint for the year. We are putting a 10% deposit down. Does this sound good enough to get a 150k mortgage?

Thanks

Yes; certainly sounds doable as long as you have no debts and no adverse credit history.

Heythere450

Brill. I was getting worried. I went on the Mse borrowing calculator and said max we could get was 150 so I though we might be pushing it. But then I did 5 more on Halifax, nationwide etc and all came up around 200k hopefully things will all go smoothly for us, certainly not worry free!

Debtslayer

Heythere450 wrote: »

Brill. I was getting worried. I went on the Mse borrowing calculator and said max we could get was 150 so I though we might be pushing it. But then I did 5 more on Halifax, nationwide etc and all came up around 200k hopefully things will all go smoothly for us, certainly not worry free!

Are you using an Independant mortgage broker? (Not one tied to EA)?
I would highly recommend you do to find you the best deal and as FTB as we were I found them great, answered any questions we had and made the buying process as stress free as if possibly can be