What to do!?!

Biggie

peterc2609 wrote: »

Went to view a house last night.

3 bed semi in Liverpool.

Needs no work, apart from a lick of paint.

It was up for 128k, they reduced it to 124,995 to be under stamp duty limit...

I like it...

Not really got a deposit....

What could I do? Offer a lot lower, get them to pay deposit in some way!?!?

You really do have a lot to learn...

1) Can't offer untill you know how much you can afford. Also need to know the buyers situation and what the markets like in that area. How long it's been on the market etc etc
2) They can't pay your deposit solicitor and mortgage company won't allow it, so you will need a 100% mortgage what ever price you did agree.
3) if you haven't got a deposit then you obviousily live on the bread line, so how will you afford to run a house, pay fees legal fees etc etc.

You can get a 125% mortgage but believe alot of these have been pulled from the maret for good reason. And even if you get one the intreast will be higher then normal and and will probably be a lot more then renting so how will you afford this. Also your a contractor so what's the contingency if you can't pay your mortgage.


THINK BEFORE YOU BUY AND STOP WASTING OUR TIME.

peterc2609

Thanks for your help Biggie.... but ....

I currently rent and it costs a hell of a lot more than a mortgage will....

I know how much I can afford... I simply will stop buying "stuff" and holidays!

Are you saying that all contractors should not get mortgages, in case their contract ends?? What happens if you become unemployed?? You have insurance to pay the bills... Same here!

I thought this was a board for help... not put downs... I'm not wasting anyones time... forgive me if I know nothing about buying homes or mortgages.... but I thought this was the place to learn!?! Is it not!?!?

fc123

Hi..I think whats being said is that things can change...we're self employed...have been for 20 yrs....one can have a great 6 yrs then just 1 dire one...which can wipe out all the gains of the previous 6 yrs in 6 mnths.....ones income is never really guaranteed...you are in IT....pretty stable and well paid BUT..economicaly at the mo.......your contracts could suddenly end...not because you are no good at your job (i'm sure you're great!) but because the company that you are working for loses their customer / contract etc.
The replies seem to come from older persons...who have "been there".

I think the warning is as follows.....now you rent..if you were not to renew a contract and couldn't find anything else for 3 mnths you have the option to just rent a room or Housing benefit MAY pay your rent...but if you have a mortgage...HB doesn't help you.
The other posts kind of say...you earn great...you spend it...but don't have a need or discipline to save at the mo...i think they are saying (and i think helpfully...wish we'd had this advice 20 yrs ago) that BEFORE you commit to a mortgage (and it is a big commitent) you should try a bit of saving / money discipline first.

And for what it's worth...my advice is...save a fat deposit and set a deadline (say 6 mnths)...you have a great incentive ...you hate where you live.....so 6 mnths of nights in and 13p kidney bean stew is nothing if it gives you choices.
Puts you in a stronger position to make offeres when the right place comes up.
my other advice would be...unless you are in a safe PAYE job, your current months salary is the only thing ever guaranteed.

peterc2609

I've had some quotes from a mortgage broker person:

How do these sound?

Purchase £120,000 (If I get for this much!))
Mortgage £114,000 (95%)

Option 1:
-Fixed 6.79% until 30/11/2009
-Arrangement fee £499* can be added to loan
-Valuation fee £315 upfront
-Mortgage Indemnity Fee £1,907
-Solicitors’ fees you will need to pay
-Redemptions: 3% before 30/11/2008, then 2% before 30/11/2009, 10% per annum overpayments allowed without penalty

Monthly payment on 25 year term for £116,406* would be £658 on interest only

Option 2:
-Fixed 7.29% until 01/12/2009
-Arrangement fee £995* can be added to loan
-Valuation fee £505 upfront
-Mortgage Indemnity Premium FREE
-Solicitors’ fees you will need to pay
-Redemptions: 4% before 01/12/2009, unlimited overpayments allowed without penalty

Monthly payment on 25 year term for £114,995* would be £698 on interest only

"fees for arranging and dealing with your mortgage will be £400 this is due in 2 parts; £200 on full mortgage application and £200 on receipt of a formal mortgage offer. "

I have two satisfied defaults from 2003 and am self employed contractor, which is why they may seem high figures... but do they sound reasonable!?!?!

epz_2

if you are pulling in upto 50k a year why not just save up a decent deposit, if you save for 6 months youll have a better deposit which will get you a much better rate, it is also usefull to get you used to not blowing all your cash though how its possible earn 50k and have virtually no savings is beyond me.

peterc2609

I'm just asking whether them numbers seem right... I'm not here to be judged about what or how I spend my earnings!?!?

Just to get some answer to my questions!?

fc123

Hi !!
There are no right / wrong answers.
The house is "worth" what you are prepared to pay (or rather borrow) and u can research comparible properties in the area with regards price and look up SOLD PRICES list on Rightmove to check actual selling prices.

Deposit...the more you have,the better the mortgage deal plus i think (someone will correct if i'm wrong) there will be no indemnity fee if the loan is 70%; this fee, if added to the loan will end up costing you 3 times as much.

Interest only.....get repayment quotes and budget on those instead...not a good time to just do interest only as the market doesn't look so healthy at the mo....at least you will pay off a little capital each mnth.

hope this helps!

Poppy9

If you are going for an interest only mortgage, how do you intend to repay the capital? You are self-employed, you could have a dire year next year. Your GF doesn't earn enough to keep you both. You should look at mortgages you can overpay when the going is good to give you a break when things are bad. My father was always self-employed and had years when the money was rolling in and years when it wasn't. Particulary hard hit when he suffered a serious injury that prevented him from working. OH was self employed for years and had some lean years too. I earn decent money though so things were not so bad.

peterc2609 wrote:

I know how much I can afford... I simply will stop buying "stuff" and holidays!

If you can't discipline yourself now to get a deposit how will you discipline yourself not to buy new sofas (Oh they're on 0% credit so lets get furniture to match) etc. It's not so easy to just stop spending, if it was we wouldn't have so many DFW.

No many sellers will take your offer seriously if you don't have a mortgage agreement in place. When you do then you can make cheeky offers. Research your market, see what other houses in the street have sold for and then make a judgement.