100% or more mortgages

skye

I was thinking about a 100% or 125% type northern rock mortgage as I have seen a good buy that I could afford (except I have no deposit and would need to put my loan on - I know this isn't a good idea but seems the only option to get on property ladder, there is not much in my area, decent for under £120,000). Does anyone know any other mortgage companys that do this? Any websites or details would be great if anyone can help.

Thorpeedo

I can't help much .... other than to say I think you're daft borrowing that much in todays climate:-)

calleyw

Can you afford it if interest rates rise.

Are your thinking of moving in the next few years.

If the answers are No and Yes then don't do it.

House prices are levelling off. They may even drop a little so personally would not saddle myself with that much debt.

But you have do what you feel is best for you.

But I think you would be better off clearing any debt that you have and getting some money together for a deposit and legal fees if needed.

Yours

Calley

meanmachine_2

To the original poster, you do realise that house prices have been falling don't you?

If you're not aware of this, don't you think you should have done your homework before makiing the biggest purchase of your entire life?

Do you also realise that, by taking out a 100% mortgage you'll be paying higher IR rates, and will, within months, be plunged into negative equity?

The answer is, you need to save for a deposit, then you can think about buying. A 100% mortgage is highly questionable even in a rising market. In a falling market it should be illegal.

BTW, could you provide us with more details of your finances? How much you earn, what your outgoings are? Only if you want to, of course...

Paul_Herring

meanmachine wrote:

Do you also realise that, by taking out a 100% mortgage you'll be paying higher IR rates, and will, within months, be plunged into negative equity?

More to the point, if a 125% mortgage is taken out, then they'll be in negative equity from day one.

skye

Turns out house wasn't such a good buy (it would have been £74,950) nice house but it wasn't an area I would want to live in.

I know it's a bad idea having a 100% mortgage but the houses were I live are still rising. At the month I am renting and that is just dead money, I don't think the house prices around here are going to drop too much.

In november I have a chance to buy my housing association flat (£9,000 off valuation at time), there has been one sold for £69,950 where they owned 3/4 and there is another up for sale for £109,000. Do you think this would be a better idea? Try & pay off debt in meantime.

meanmachine_2

Yes, buy your housing association flat.

Keep saving. Pay off debts.

Do up flat and then move.

Oh and renting isn't dead money in a falling or stagnant housing market.

Can I ask which general area you're looking to move to?

While it's true that in some areas asking prices have gone up, actual sales prices have been falling on most areas.

If you're in the North, it's possible that your area might still be rising. But trust me, where London goes, the rest of the country follows, and prices in the captial have been dead or falling for months now.

skye

The area is Wirral.

meanmachine_2

Well I'm not an expert on your area, but as far as I know it's always been a fairly desirable location and is likely to be more immune to any significant price crash than, say, Toxteth.

In a price crash or correction, the places that fall the least and recover the quickest are those that people always want to live in. Only in a boom when people are desperate to live someone, anywhere, do the grotty parts of the UK grudgingly see a rise.

Ask yourself this: if you DIDN'T have to live in the area, would you still choose to? If the answer is yes, then it's a sensible purchase.

If the answer is no, I'm only living here cos I can't afford anywhere else, then your house will appreciate less than others and fall further than others.

skye

I earn £15015 per year (after tax etc is about £950 per month), and have about £8000 in credit card debts (currently on 0%/low interest) which some of are shared with my boyfriend and under £4000 left to pay on a loan (big mistakes to make i know & am trying to pay off asap). My boyfriend earns £14,000 basic and gets a lot of overtime (taking it up to around £22-24,000 per year, working out to between £1,100 -£1,700 per month after tax etc).

My outgoings are (boyfriend gives me £300 each month for rent, gas etc but not food - he would give me more money for this)
£55.79 per week rent
£45 per quarter electricity
£19 per month gas
£81 council tax
£150 per year water
£50/60 per week food shopping (gradually getting this down)
I pay back £107.67 per month to my loan and at least £160 in credit card repayments a month. (the idea being that if I have a 110% mortgage etc then this money would also be paying off the mortgage as well as the debts. I do know its bad idea and not one I would jump straight into.

I would still want to live here whether house prices go up or down. My friends, family etc live here, I have a steady job etc, I don't really want to move unless I could get a nicer cheaper house or better job.

As long as I could buy a nice 2/3 bed house (my flat is a balcony bedroom, no privacy but nice for now) I wouldn't mind staying in it for quite a good period of time.

dougk_2

Personally I think you would be best reducing the debts before considering buying a house. The rent doesn't seem that expensive and taking out a 100% (or more) mortgage would not be at a very competitive rate, you really need at least a 5% deposit to start getting "better" deals.