!st time buyer advice.

ipri

Hi, my son and girl friend beginning the house search. It's a long time since we had a mortgage so things will have changed. We had an endowment...ended up with warning letters re. shortfall. We were able to pay it off so we were ok. I suppose a repayment M. would be best?. They will have a decent deposit ( £25- 30K). Will they need life Insurance?. Will they need any other scheme eg ISAS / or other saving backups.as we did? Any info appreciated.

Royster82

I think legally the mortgages state that you must have home building Insurance that's about it, they do ask questions what would you do if you or your partner passed away but I have life insurance so we would on when I applied. If you did not have life cover I'm guessing if I was a bank I'd see you as more high risk, than someone that has cover

Life Insurance all comes down to personal choice and is quite cheap in general and Offers peace of mind should anything happen to you that it would all be sorted.

muhandis

ipri wrote: »

Hi, my son and girl friend beginning the house search. It's a long time since we had a mortgage so things will have changed. We had an endowment...ended up with warning letters re. shortfall. We were able to pay it off so we were ok. I suppose a repayment M. would be best?. They will have a decent deposit ( £25- 30K). Will they need life Insurance?. Will they need any other scheme eg ISAS / or other saving backups.as we did? Any info appreciated.

1. Assuming your son and partner fall within a standard first time buyer category, they will only have access to a repayment mortgage, and so their ability to borrow and maximum length of mortgage will be assessed based on their deposit, income, outgoings, age, credit history, etc.

2. Based on the above, aside from proof of the deposit, ISAs etc will not be required as the monthly mortgage payment will be calculated such that the mortgage is fully paid off at the end of the repayment term.

3. AFAIK, you do not need to take out life insurance as a condition of the mortgage and it does not impact your mortgage application. Having said that, it might make sense to take out life insurance based on the buyer's particular circumstances.

Money_Rollercoaster

As noted by Muhandis ...

muhandis wrote: »

1. Assuming your son and partner fall within a standard first time buyer category, they will only have access to a repayment mortgage, and so their ability to borrow and maximum length of mortgage will be assessed based on their deposit, income, outgoings, age, credit history, etc.

... lenders now assess applicants for affordability in a reasonably standardised way now. It's worth a look at the following article, in preparation for the mortage interview / consultation / interrogation ...


http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10787176/New-mortgage-rules-the-questions-you-will-be-asked.html

ACG

If they are on repayment (which is very likely now a days) they do not need any savings plans.

They do not need life insurance but if one dies does pass away their family may want paying from the equity so it is advisable even if for a small amount.

If in doubt. speak to a broker.