Proceed with house purchase?

[Deleted User]

You may find that a mortgage offer is harder to secure if you wait. Many lenders are only offering mortgages to those with a 40% deposit in the current crisis. However as you have your mortgage in place this won't affect you.

numbercruncher8

If you can afford the house at 15% deposit, but not at 20% it sounds like you're putting most of your money into it?
Anyway, what I mean by stress testing your mortgage is looking at affordability at higher rates.
After your introductory period your rate will go up. Most people in your position a few years ago would not be able to remortgage today with some lenders, because they have restricted the loan to value requirements. To all purposes they are stuck paying the higher costs, at least until the market opens up again. 
Also, no-one knows what may happen to interest rates either. A rate rise feeds straight into the mortgage costs for those not on the introductory rates.
So for an example, someone borrowing £200k may pay £850 a month on the standard rate (2%). That cost may be closer to  £1050 after the introductory term ends (4%), or closer to £1300 if interest rates are 2% and a remortgage is not possible.
Clearly interest rates rising to this level are not that likely over the next couple of years, but it represents a worst case scenario.

peppapig14

Peckarami said:

Hey all, me and my partner are in the process of buying a house, we put an offer on at the end of Jan (and got a good price) currently we have the mortgage, solicitors searches are complete and we are just waiting for the last enquiries to be done before agreeing an exchange date. We have already paid about £1000 between solicitors, mortgage advisor etc etc. All good so far. Obviously COVID19 is here and now my partners family have casted doubt about house prices and us loosing money in the long run. They also may think we can renegotiate the price on the house even lower citing the Coronavirus as the cause or even pull out completely and look again once this has blown over. The house is perfect for us and in the right location but does anyone have any thoughts on the above? My opinion is that we should continue, we got a good price and we can afford it, we both have stable secure and well paid jobs, but my partner is quite worried that her family may be right and we should put a hold on the whole thing, obviously losing any money already spent so far. I would like to give her the confidence we are doing the right thing but family is a big influence. 

I did do a search, but the posts didn't cover my set of circumstances. But if there are any similar post the link below?

Thanks in advance! I would really appreciate any help you lovely lot can give. 

Peckarami said:

Hey all, me and my partner are in the process of buying a house, we put an offer on at the end of Jan (and got a good price) currently we have the mortgage, solicitors searches are complete and we are just waiting for the last enquiries to be done before agreeing an exchange date. We have already paid about £1000 between solicitors, mortgage advisor etc etc. All good so far. Obviously COVID19 is here and now my partners family have casted doubt about house prices and us loosing money in the long run. They also may think we can renegotiate the price on the house even lower citing the Coronavirus as the cause or even pull out completely and look again once this has blown over. The house is perfect for us and in the right location but does anyone have any thoughts on the above? My opinion is that we should continue, we got a good price and we can afford it, we both have stable secure and well paid jobs, but my partner is quite worried that her family may be right and we should put a hold on the whole thing, obviously losing any money already spent so far. I would like to give her the confidence we are doing the right thing but family is a big influence. 

I did do a search, but the posts didn't cover my set of circumstances. But if there are any similar post the link below?

Thanks in advance! I would really appreciate any help you lovely lot can give. 

we are in same situation and currently not sure what to do. been looking for about 4 years, found house in perfect location ( worse house in the street as no direct parking, north face garden etc ), and had offer accepted at lower price due to new heating and windows needed. we are putting most of our savings in, and concerned we could be in negative equity in few years. we aim to stay for at least 5 years, have mortgage offer fixed for 5 years and the mortgage will be £250 cheaper than rent we are currently paying

RelievedSheff

peppapig14 said:

Peckarami said:

Hey all, me and my partner are in the process of buying a house, we put an offer on at the end of Jan (and got a good price) currently we have the mortgage, solicitors searches are complete and we are just waiting for the last enquiries to be done before agreeing an exchange date. We have already paid about £1000 between solicitors, mortgage advisor etc etc. All good so far. Obviously COVID19 is here and now my partners family have casted doubt about house prices and us loosing money in the long run. They also may think we can renegotiate the price on the house even lower citing the Coronavirus as the cause or even pull out completely and look again once this has blown over. The house is perfect for us and in the right location but does anyone have any thoughts on the above? My opinion is that we should continue, we got a good price and we can afford it, we both have stable secure and well paid jobs, but my partner is quite worried that her family may be right and we should put a hold on the whole thing, obviously losing any money already spent so far. I would like to give her the confidence we are doing the right thing but family is a big influence. 

I did do a search, but the posts didn't cover my set of circumstances. But if there are any similar post the link below?

Thanks in advance! I would really appreciate any help you lovely lot can give. 

Peckarami said:

Hey all, me and my partner are in the process of buying a house, we put an offer on at the end of Jan (and got a good price) currently we have the mortgage, solicitors searches are complete and we are just waiting for the last enquiries to be done before agreeing an exchange date. We have already paid about £1000 between solicitors, mortgage advisor etc etc. All good so far. Obviously COVID19 is here and now my partners family have casted doubt about house prices and us loosing money in the long run. They also may think we can renegotiate the price on the house even lower citing the Coronavirus as the cause or even pull out completely and look again once this has blown over. The house is perfect for us and in the right location but does anyone have any thoughts on the above? My opinion is that we should continue, we got a good price and we can afford it, we both have stable secure and well paid jobs, but my partner is quite worried that her family may be right and we should put a hold on the whole thing, obviously losing any money already spent so far. I would like to give her the confidence we are doing the right thing but family is a big influence. 

I did do a search, but the posts didn't cover my set of circumstances. But if there are any similar post the link below?

Thanks in advance! I would really appreciate any help you lovely lot can give. 

we are in same situation and currently not sure what to do. been looking for about 4 years, found house in perfect location ( worse house in the street as no direct parking, north face garden etc ), and had offer accepted at lower price due to new heating and windows needed. we are putting most of our savings in, and concerned we could be in negative equity in few years. we aim to stay for at least 5 years, have mortgage offer fixed for 5 years and the mortgage will be £250 cheaper than rent we are currently paying

In your case you would be daft not to go for it but accept you may have to stay longer than your anticipated 5 years.

RelievedSheff

numbercruncher8 said:

If you can afford the house at 15% deposit, but not at 20% it sounds like you're putting most of your money into it?
Anyway, what I mean by stress testing your mortgage is looking at affordability at higher rates.
After your introductory period your rate will go up. Most people in your position a few years ago would not be able to remortgage today with some lenders, because they have restricted the loan to value requirements. To all purposes they are stuck paying the higher costs, at least until the market opens up again. 
Also, no-one knows what may happen to interest rates either. A rate rise feeds straight into the mortgage costs for those not on the introductory rates.
So for an example, someone borrowing £200k may pay £850 a month on the standard rate (2%). That cost may be closer to  £1050 after the introductory term ends (4%), or closer to £1300 if interest rates are 2% and a remortgage is not possible.
Clearly interest rates rising to this level are not that likely over the next couple of years, but it represents a worst case scenario.

We had to mortgage with an adverse lender last year. Our mortgage rate is actually forecast to be lower than our current fixed rate if we cant remortgage next April.

We have no worries,  if we cant remortgage we can afford a much higher interest rate than we are currently on. We will keep plodding away at the mortgage as we have done before.

peppapig14

RelievedSheff said:

peppapig14 said:

Peckarami said:

Hey all, me and my partner are in the process of buying a house, we put an offer on at the end of Jan (and got a good price) currently we have the mortgage, solicitors searches are complete and we are just waiting for the last enquiries to be done before agreeing an exchange date. We have already paid about £1000 between solicitors, mortgage advisor etc etc. All good so far. Obviously COVID19 is here and now my partners family have casted doubt about house prices and us loosing money in the long run. They also may think we can renegotiate the price on the house even lower citing the Coronavirus as the cause or even pull out completely and look again once this has blown over. The house is perfect for us and in the right location but does anyone have any thoughts on the above? My opinion is that we should continue, we got a good price and we can afford it, we both have stable secure and well paid jobs, but my partner is quite worried that her family may be right and we should put a hold on the whole thing, obviously losing any money already spent so far. I would like to give her the confidence we are doing the right thing but family is a big influence. 

I did do a search, but the posts didn't cover my set of circumstances. But if there are any similar post the link below?

Thanks in advance! I would really appreciate any help you lovely lot can give. 

Peckarami said:

Hey all, me and my partner are in the process of buying a house, we put an offer on at the end of Jan (and got a good price) currently we have the mortgage, solicitors searches are complete and we are just waiting for the last enquiries to be done before agreeing an exchange date. We have already paid about £1000 between solicitors, mortgage advisor etc etc. All good so far. Obviously COVID19 is here and now my partners family have casted doubt about house prices and us loosing money in the long run. They also may think we can renegotiate the price on the house even lower citing the Coronavirus as the cause or even pull out completely and look again once this has blown over. The house is perfect for us and in the right location but does anyone have any thoughts on the above? My opinion is that we should continue, we got a good price and we can afford it, we both have stable secure and well paid jobs, but my partner is quite worried that her family may be right and we should put a hold on the whole thing, obviously losing any money already spent so far. I would like to give her the confidence we are doing the right thing but family is a big influence. 

I did do a search, but the posts didn't cover my set of circumstances. But if there are any similar post the link below?

Thanks in advance! I would really appreciate any help you lovely lot can give. 

we are in same situation and currently not sure what to do. been looking for about 4 years, found house in perfect location ( worse house in the street as no direct parking, north face garden etc ), and had offer accepted at lower price due to new heating and windows needed. we are putting most of our savings in, and concerned we could be in negative equity in few years. we aim to stay for at least 5 years, have mortgage offer fixed for 5 years and the mortgage will be £250 cheaper than rent we are currently paying

In your case you would be daft not to go for it but accept you may have to stay longer than your anticipated 5 years.

that's our dilemma as it is a small mid terrace with no room for extending. 
our dilemma is if we lose our jobs , we would have the money to rely in which we have put aside for the repairs - thus having no funds for the new heating, Windows untill we managed to save up again

Crashy_Time

AdrianIsabel said:

numbercruncher8 said:

What's the area?
House price levels are a generalisation and wont affect each place evenly.
If you're planning to stay a long time in the house, price becomes less relevant. Maybe more relevant is a mortgage stress test, could you afford it if you were on the SVR? 
If there was a worst case and house prices fell, it wouldn't make much different to those who were staying anyway, but could affect the ability for some to remortgage due to LTV.

The problem is, or could be, how to know if you could afford it when you don't know the SVR that will be there waiting you after a fixed term. You can predict now, or in a few months, what BoE does with rates if things go crazy is unknown.

True, see Denmark.

AdrianIsabel

What happened there? I have seen a 0.15% increase there (from -0.75% to -0.6%). Nothing scary. I doubt that once in negative rates there is a decrease on the SVR and fixed rates. There will be a minimum and below that level banks will do nothing if lower.

Crashy_Time

AdrianIsabel said:

What happened there? I have seen a 0.15% increase there (from -0.75% to -0.6%). Nothing scary. I doubt that once in negative rates there is a decrease on the SVR and fixed rates. There will be a minimum and below that level banks will do nothing if lower.

Global/European bond/currency markets are signalling that their rates are too low.