Unsure what to do!

Runningmad

getmore4less said:

Runningmad said:

samps1973 said:

Thanks @Runningmad
I had a little look into it. I remember it said something about the government paying 20% toward the equity (whatever that means ) or something like that but I think it said it was coming to an end soon so I brushed it aside unless I'm thinking of something else. I only thought about the sharedownership as I'd heard of it before. I'll dig a little deeper about the help to buy.
Thanks

It has recently changed a little but carries on until 2023. You have to Be FTB, has to be a new build and there are price caps on different parts of the country. You can get all the info on line but the brief out line is you have 5% deposit, 20% equity loan from the government and 75% mortgage. Take a look, this is the only way we can buy at the moment. The point to remember is the 20% equity loan will almost certainly increase as you pay back 20% at the time of sale/mortgage end not the 20% value at the beginning. It's worth looking into for sure. Good luck. 

I did the calculation for using H2B against a 95% mortgage over 5 years. using 5y fixes back in Jan 2020
https://forums.moneysavingexpert.com/discussion/comment/76694270/#Comment_76694270
Property had to rise 41% in that example to be worse off  a more recent one was 

One using the more recent(1st May) 95% rates came out out at 55%
https://forums.moneysavingexpert.com/discussion/comment/78292300/#Comment_78292300

If the property fits the criteria H2B can still be the smart move even if you can afford the place outright.

I've just read both the links and noticed the second one you posted was on a post that I made! Your figures go right over my head but your ending comment that it could be a smart move is just what I want to hear especially as today we made it  one step closer and got a mortgage in principle. Thank you

Anyanka1

Well done and good luck.

samps1973

Thanks everyone for your replies and help. 
@MovingForwards
Thanks for the very good advice. 
I spoke to a friend at work today and his girlfriend is training to be a mortgage broker. The company she works for deals with all sorts of cases and is independent. He said the owner would deal with it and has been in the business for many years and is very good at helping people. so fingers crossed I'll get some good advice. I have his email address. I'm going to write down all the questions I need to ask to save time and confusion. I'm not sure if your able to but is it possible you could let me know what mortgage broker you used as you was in a similar situation as me,  Thank you and if that's not possible on this forum what type of mortgage are you on to be able to make extra monthly payments.
One of the biggest things for me is being able to pay over each month like yourself as I get occasional overtime etc and it also gives a massive incentive to get it paid quicker.
Thanks 

@saajan_12
Very good point, thank you. I think from what I'm reading here shared ownership really is last resort for me now. Thanks

@AnotherJoe
Thank you very much for taking the time to look into the figures.

When I compared the prices I was looking at the monthly payments on shared ownership properties and noticed there wasn't much difference between a one bed and two bed place. But I guess if you look at the lump figures theres a big difference.

I think my aim now is to try and get a full mortgage on a one bedroom property and a good Sofabed. Like you said £20k is £20k. Also a one bed flat would be a big upgrade for me considering I sleep, eat and live in the same room. Also you said I can always change in the future which is true.
Thanks for the advice

@lookstraightahead
Good name by the way 😀 
I do tend to try and wrap my daughter in cotton wool. I guess she could take 100 or more paths in life. All I really need to do at the mo is get on that ladder. At least she'll have a separate room if I have a 1 bed flat hopefully.

@Runningmad
Congratulations on today's news, you must be over the moon. Good luck 👍

To be honest, from reading your posts the help to buy sounds really good and thanks for pointing me in the right direction. Just need to speak to a good Broker now and see it suits my circumstances. Thanks.

@getmore4less
Thanks for the reply. I find it a bit difficult to understand the figures but the last sentence really stand out for me. Thanks.

@Anyanka1
I think now a One bed is definitely the way to go. Also I guess if a room is always available for her she'll make less effort to get her own place too.
Thanks 

samps1973

In 4 days I've learned a lot from you guys, Thank you. Like some of you have said theres no mad rush and I have time. Over the coming days I'm going to think of all the questions to ask the broker to save a bit of time and confusion and also have a rest in between. All this reading and thinking has left me feeling a bit brain fried 😀

I also know that this isn't a fast journey and there will be gaps between the steps but I'll keep updating here as I go along. Over and out for now Zzzz 😁
Any more comments are welcome. I'm just not going to research online for a bit. Thanks again.

MovingForwards

@samps1973 I used @ACG but I'm not sure if he's taking new clients on at the moment; he will pop up and say but you can always drop him a message, especially if it's a few months before you would start looking.

Most lenders allow upto 10% overpayments to be made, some allow more as they have a strange way of calculating it.

I'm actually with a sub-prime lender due historical problems following my marriage breaking down. I've got my lender set up as a payee with my bank.  The first thing I do payday is send them a chunk of money, a few days later they take their monthly payment.
I've a 23 year mortgage term, fixed for 5 years but saving up to remortgage early and my plan was to clear it within 10 years of it starting; only 9 years to go if I keep to my schedule. 
As most of my outgoings are fixed, I can budget and plan quite easily. Which is a nice feeling.

getmore4less

re:  the H2B can still be the smart move.
its about trying to asses the options that should have the best outcome given the known information and then adding in the speculative unknown stuff.

For H2B the easy one is use 5y fixes and see what drops out in 5 years.
MY examples don't include the H2B overheads of extra valuations and other fees.

Against 95% H2B looks OK, 90%/85% the margins are a lot narrower.
When at the 95%/90% you need to run the 2 year numbers as the drop in LTV gets better rates forthe later part of the 5y 

A simpler example is the 5y/10y trade off.

People say "I am low risk I like a long term fix in case rates go up".
They think a longer fix is lower risk when it may in fact be the higher(different) risk option.
When you run the 5+5 against 10 paying the 10y amount  what comes out is 
"I am low risk I like a long term fix in case rates go up"
changes to
"I am low risk I like a long term fix in case rates go up by more than X% in 5 years"
that X changes the risk profile considerably not only locking into higher payments for the first 5 years but the risk duruing  the second 5 is greatly reduced due to owing less and having a rate margin in the bag.

then you get options like the Coventry 10y where you are only locked in for 5y and can switch ERC free
that adds another option to analyse..

samps1973

@MovingForwards
Thanks for the link.
Asking which mortgage i am able to pay the most % extra a month is a valuable question to ask the mortgage broker I guess. The extra interest saved say on a £100 over 20 years is massive. What. I've never liked paying Bill's, who does 😁 but I'd enjoy paying the extra time get it paid early, what a incentive!
Thanks 👍

samps1973

@getmore4less
Thanks for taking the time to write what is I'm sure a valuable post. I'm very new to the world of mortgages so to be honest I find the numbers and the terms used in your post a bit difficult to understand, but I'm sure as I research etc the numbers and terms will become easier to understand. I will definitely come back to your post when I have a bit more knowledge. 

Thank you 👍

samps1973

It's not even been a week yet and thinking about a shared ownership property seems like a distant memory. I feel a bit more fired up and positive now that I know there may be a chance I can get a full mortgage. I've never been one to follow money however, knowing that when I'm working hard to pay for my home every penny I pay will be going towards paying it off and being rent free. Onwards and upwards. Whatever i'm able to get must be better than what im doing now so win win.

Thanks all 👍

MovingForwards

It took me 3.5 years of saving before I was ready to buy and I discovered mortgage overpayment calculators; was a really eye-opening. 

Paying the mortgage down quicker is good as it brings financial freedom quicker, but don't neglect your pension planning and savings. State pension helps keep things ticking over as a homeowner, but it's nice to have a little bit extra. Once you're unpacked and settled into a new routine, it's one to look at 😃