95% Mortgage for 19 year old - Advice

navidson

Apologies for my slow reply to the comments - all of them much appreciated!

Here is the link to one of the flats he is interested - I'll let people who know more than more decide how wise of an investment it may or not be

https://www.rightmove.co.uk/properties/162507038

Tabieth

navidson said:

Apologies for my slow reply to the comments - all of them much appreciated!

Here is the link to one of the flats he is interested - I'll let people who know more than more decide how wise of an investment it may or not be

https://www.rightmove.co.uk/properties/162507038

Well it’s a long lease so that’s clearly not the issue. I’m not keen on the flat or its layout (I dislike the open plan living area and I don’t like the Jack and Jill bathroom). But that’s just me and others may not mind or like these things. There doesn’t seem to be much storage space but that’s not uncommon with flats. There’s no balcony and I don’t recall noticing anything about communal gardens. There’s car parking which is good and it’s a 2-bed so much better investment (and more comfortable) than a 1-bed. 

It’s not horrible, it just looks a bit bland and dull. But I don’t know the area at all and so I can’t comment on the location. Many things about a property can be changed. The location can’t be. 60k for a 2-bed flat in 2025 is ridiculously cheap. I still assume there must be something wrong with it. 

Herzlos

It looks like a nice flat, I assume that because it's top floor with reduced height in some places that'll put some people off. 

Is it fixed price £60k or is there a risk it'll go over and he'll need more money?

I think your best options are a whole of market broker, or finding a way to raise and gift him the other £3k needed to get to a 10% deposit. 

poseidon1

navidson said:

Apologies for my slow reply to the comments - all of them much appreciated!

Here is the link to one of the flats he is interested - I'll let people who know more than more decide how wise of an investment it may or not be

https://www.rightmove.co.uk/properties/162507038

Couple of points to note.

At £60k it is selling at 50% less than its last purchase price of £119,000 in 2006, so massive depreciation from new over the last 20 years.

There is another flat in the block, unsold at £75k since October 2024 and similarly selling well below cost- see below

https://www.rightmove.co.uk/properties/162508658#/?channel=RES_BUY

Does not inspire confidence as a secure long term investment.

Edit - imagine you were the original lender at 95% LTV in 2006!

Herzlos

Did Balfour street come up before with some weird renting/HMO thing? I recognise the houses on the other side of the road on streetview. 

I see other flats also had a massive price drop early on:

#14 sold for £114k new, then £50k in 2017 and £68k in 2024.

#9 sold for £112k new, then £73k in 2021.


So whatever caused the price to tank happened before 2017. Was it just that they never recovered from the 2007 crash? Or were painfully overpriced to begin with? I don't know the area to comment. 

Prices have been creeping up since, I don't think it's a terrible investment in that I don't think they'll drop again, but I'd be very curious to find out why they dropped so far and didn't recover. 

RAS

The first questions I'd ask are about the service charge and any scheduled works. Also about a sinking fund.

It's not above 4 floors anyway.

newsgroupmonkey_

eddddy said:

navidson said:

 and his credit score is over 900.

la531983 said:

Just to say, this is totally irrelevant as nobody sees it.

It's not at all irrelevant - but it's only part of the picture.

The credit reference agency use a calculation formula that summarises your credit history and financial behaviour.  e.g. have you missed payments, do you make late payments, have you got CCJs etc.

A mortgage lender will look at those same factors, and will probably use a similar calculation formula as part of their scoring.


But a mortgage lender will also look at things like affordability (income vs outgoings), job stability (employed vs self-employed, time in a job, etc), and other stuff.

So if you have a good credit history (indicated by a good credit score), that's probably one box ticked.

If you have a bad credit history (indicated by a bad credit score), you're likely to have problems.

My credit scoring is now starting to fall, because the only debt I now have is a mortgage.

Not missed a payment in 19 years (and even that was an accident which I could have had removed if I'd bothered shouting loud enough).

I have a credit card with a £15k limit for emergencies. I have some savings (although probably not enough, hence the CC). I've borrowed loads in the past and paid it back (sometimes with interest)

And no, I can't be bothered with the whole "Buy everything on CC and pay it all back at the end of the month". That's just asking for trouble. I had debt problems prior to the 19 year thing and I never wish to get back into that spiral.

ReadySteadyPop

poseidon1 said:

navidson said:

Apologies for my slow reply to the comments - all of them much appreciated!

Here is the link to one of the flats he is interested - I'll let people who know more than more decide how wise of an investment it may or not be

https://www.rightmove.co.uk/properties/162507038

Couple of points to note.

At £60k it is selling at 50% less than its last purchase price of £119,000 in 2006, so massive depreciation from new over the last 20 years.

There is another flat in the block, unsold at £75k since October 2024 and similarly selling well below cost- see below

https://www.rightmove.co.uk/properties/162508658#/?channel=RES_BUY

Does not inspire confidence as a secure long term investment.

Edit - imagine you were the original lender at 95% LTV in 2006!

I believe they are looking for a home though not an investment? The flat probably won`t make a profit, might easily make a loss again in this environment but they are starting with only 60k debt that is the main thing, they are in a better position than the people who overpaid and ended up in negative equity. As I said previously the bank probably thinks this flat could sell at a loss in the future hence the 10% deposit.