Living costs

SameOldRoundabout

On those kind of rates I’d be waiting another year and doing everything possible to improve her rating so you can get better. 5.4% is crazy high. You may get a better rate in 2 years but I think it will depend on what is making her rating so poor, and if it’s now old enough to have less effect. Have you tried a broker to see if other lenders will give better options? They are the best place to start usually. 

AdrianC

jonny411 said:

Your right about us moving out from living with parents, but I wouldn’t rent personally.

Why on earth not? And please don't come out with that trite ol' guff about "throwing money away" - you're quite happy to pay for other services received, right?

It is concerning how much interest we would be paying initially. When we went to remortgage after the two years would we get a significantly lower interest rate if her credit rate improves?

Yes. ...but if it doesn't, you may be stuck with this usurious sub-prime product.

jonny411

Back to the drawing board then haha

jonny411

SameOldRoundabout said:

On those kind of rates I’d be waiting another year and doing everything possible to improve her rating so you can get better. 5.4% is crazy high. You may get a better rate in 2 years but I think it will depend on what is making her rating so poor, and if it’s now old enough to have less effect. Have you tried a broker to see if other lenders will give better options? They are the best place to start usually. 

Basically she defaulted on a payment just over a year ago. It was a one off that she paid off straight away. Nothing bad since. So by the time we would have applied for the mortgage at the end of 2020 it will be two years old and the mortgage advisor said that by the time we come to remortgage after two years the default payment will be 4 years old and wouldn’t have as much of an impact. 

lees80

With that kind of joint income you could save a serious amount of money by staying as you are at the moment. 
The interest rate is ridiculous and the amount you'd pay in initial interest doesn't seem worth it to me.

Appreciate the urge to buy, but honestly it's just not worth it. Work out the costs in interest going with this product vs going with a high street lender at current high Street rates - that should tell you all you need to make the right decision. 

FreeBear

Unless you buy a fairly new build, you need to factor in maintenance costs. A new boiler could easily set you back £3K if the existing one becomes unrepairable. Painting, decorating, replacing windows (or just the sealed units). Repairs to the roof, guttering, and drains - It all mounts up. If you buy an older house, you'll probably want a new kitchen and bathroom - Easily another £30K if you get someone in to do all the work, then you may find the place needs rewiring (another £4K)... At least with a rented property, someone else is paying for the maintenance, but you get stuck with their choice of kitchen & bathroom.

Darkslider

To echo others comments, ooft! I thought we were getting a sore deal at 3% fixed for 5 years due to my poor credit history and partner only on a temporary contract! 

How did you come about your 5.4% AIP? Did you just approach your bank? If you haven't already I'd strongly recommend booking an appointment with an independent (whole of market) mortgage broker who can search around to find you a better deal. My partner had a default 18 months ago and it made us less attractive to some lenders but our broker knew which ones to approach and, considering our circumstances, I'm happy with the deal we ended up getting. 

If you've already done this however and 5.4% really is the best you can get, it may well be worth holding on for 6-12 months, working on your finances and perhaps increasing your savings so you can stretch to the next 5% LTV band. The extra elapsed time since your default will open up more lenders to you as well.

[Deleted User]

youth_leader said:

I would recommend having a look at You Need A Budget for household expenses.  It's helped me.  I use it to budget my electric, water and sewerage, council tax,  broadband, mobile phone, tv licence, house insurance, dog insurance, personal insurance, car insurance and car tax, savings.  I've not got gas as we are on oil, so have to load the winter payments for a lot more oil as well as wood for the woodburner.  
Are you going to have a separate account for mortgage/bills etc, and keep your own individual accounts?  We used to do this and saved any monies left at the end of the month.

I'm going off piste here.  I used YNAB4 and then upgraded to nYNAB locking in the annual fee of $45 for life and I have found it really helpful for budgeting (personal and business) but the price is now $84 a year or $11.99 a month.  I like nYNAB but I'm not sure I like it enough to pay those prices.  At $45 it wipes its own face, at $84....

[Deleted User]

OP, I don't understand your reluctance to rent when you are willing to accept a sub-prime mortgage rate.  That makes no sense to me.  You haven't lived together before and it sounds as if neither of you have ever lived away from home before given that you have no idea how much utilities cost so renting together for a year or two would seem like a very sensible idea.

jonny411

Darkslider said:

To echo others comments, ooft! I thought we were getting a sore deal at 3% fixed for 5 years due to my poor credit history and partner only on a temporary contract! 

How did you come about your 5.4% AIP? Did you just approach your bank? If you haven't already I'd strongly recommend booking an appointment with an independent (whole of market) mortgage broker who can search around to find you a better deal. My partner had a default 18 months ago and it made us less attractive to some lenders but our broker knew which ones to approach and, considering our circumstances, I'm happy with the deal we ended up getting. 

If you've already done this however and 5.4% really is the best you can get, it may well be worth holding on for 6-12 months, working on your finances and perhaps increasing your savings so you can stretch to the next 5% LTV band. The extra elapsed time since your default will open up more lenders to you as well.

We went to the mortgage bureau who gave us that quote.  We haven't tried anyone else yet.
I think we will go to an independent broker and see if we can get a better deal.  Considering your circumstances i am surprised how bad our AIP is.