Deposit and 2 year vs 5 year

juniordoc

It is a risky time to be buying with a 5% deposit, more risk of house prices falling with rates rising and brexit uncertainty.
If you could put down 8 rather than 5% you would be slightly better protected from negative equity.
Could you agree with your MIL to have a period before you start to pay her back? To wait until your salaries go up?
The process of buying/moving is always more expensive than you think!

tkb7

juniordoc wrote: »

It is a risky time to be buying with a 5% deposit, more risk of house prices falling with rates rising and brexit uncertainty.
If you could put down 8 rather than 5% you would be slightly better protected from negative equity.
Could you agree with your MIL to have a period before you start to pay her back? To wait until your salaries go up?
The process of buying/moving is always more expensive than you think!

Thank you.
Yeah, my partner is going to speak with her. She did offer to give us money every month until his wage goes up but that is just pointless when we could just not pay her back until a couple of years down the line.
It really is! I know everyone always says that but it's not until you're doing it that you realise exactly what people mean.

getmore4less

tkb7 wrote: »

We are needing to borrowing £175,750 with a 5% deposit.
Repayments are £820.90 per month which is manageable but it would maybe be on the tighter side especially because most of our deposit was a loan from MIL and we need to gradually pay that back.

Does your broker and lender know this?

Anyway,

forgot to ask the rate/term but can work out some numbers for different terms.

purchase say £184,740k borrowing £175,500 LTV 95% paying £821

How much will you owe in 2y and what will the LTV be

40y @ 4.7813% £172,440 93.3%
35y @ 4.4118% £171,098 92.6%
30y @ 3.8325% £169,013 91.5%
25y @ 2.8764% £165,622 89.7%

Looking like worst case you can get to 90% in 2 years(you said you can squeeze to 92% now.
you need to compare 2y @ 95% + 3y @ 90% against a 5y @ 95%

rates option are lower for 2y 95% and even more when you get to 90%

if things are tight then a 5y may be more suitable

if there is borrowed family money them maybe something like the Barclays springboard is an option to look at

Rates are 2.7% over 3 years but lock in 10% family money for the 3 years but they get interest on that @ 2% which is higher than a lot of savings accounts.

https://www.barclays.co.uk/mortgages/family-springboard-mortgage/

getmore4less

juniordoc wrote: »

It is a risky time to be buying with a 5% deposit, more risk of house prices falling with rates rising and brexit uncertainty.
If you could put down 8 rather than 5% you would be slightly better protected from negative equity.
Could you agree with your MIL to have a period before you start to pay her back? To wait until your salaries go up?
The process of buying/moving is always more expensive than you think!

It really does not matter that much if you are buying a place to live in and the interest costs are not more than rent.

pick the right lender and you can mitigate the follow on rate to a base+2.5% tracker.

worst case as long as you can service the debt is you can't move so picking the right house is more important than worrying about not buying.

tkb7

getmore4less wrote: »

It really does not matter that much if you are buying a place to live in and the interest costs are not more than rent.

pick the right lender and you can mitigate the follow on rate to a base+2.5% tracker.

worst case as long as you can service the debt is you can't move so picking the right house is more important than worrying about not buying.

Definetly not planning on moving again anytime soon after this. This will be my 6th move in 7 years (first that isn't rented) and packing isn't exactly my favourite thing to do! :rotfl: