Need to start thinking about this malarky!

boinging_2

southernscouser wrote: »

You won't get slated from me!

So is it a case of if you borrow more than say 3.5 times your salary, you pay a higher interest rate? :think:

Do not and I stress the not part, take on a massive interest only mortgage in a falling market.

pinkshoes

SaveTheCheerleader wrote: »

I'll get slated for putting this but you can borrow more than 3.5 X your income. We did two years ago on just my partners income (£21,000 borrowed 120,000). We just remortgaged to another fixed rate with no problem. Obviously we are on a higher interest rate than we would like and an interest only mortgaage BUT if you are happy with that then why not.

Like you we are in Essex, which is unbelievably expensive to buy and rent, and got fed up with renting and just wanted a home to bring up our children. We're not in it for investment just living!!

Good luck

Southernscouser, the answer is already in the post above... two years ago you could borrow five or six times your salary, but since the recent credit crunch, this amount is now MUCH lower.

If you buy on an interest only mortgage, you have to presume that the price of the property will rise, which is an unknown in today's market. You can still get an IO mortgage, but nowadays the bank often want a 20% deposit to secure their (your) investment!!

Doozergirl

An interest only mortgage shoud be accompnaied by another investment vehicle which is predicted to pay off the capital at the end of the loan.

Just taking out an IO mortgage without putting money away for the actual loan repayments is like renting, except it's generally more expensive than rent; so a bit of a stupid idea.

SaveTheCheerleader

I guess it can depend on many factors (I'm no expert!) but can just tell you how it was for us.

Basically the mortgage companys wouldn't lend us the amount of money we required based on our income so we did a self certifcation mortgage (where you don't have to supply payslips, normally for self employed persons). They were then happy to lend the money but as we are a 'higher risk' they would only lend at a higher interest rate, 5.09% two years ago and 6.05% now.

Also we didn't need to borrow the full amount of the house price as we had a good deposit (begged, borrowed and stole from family!!) which I think can factor in the decision of whether they will lend you the money.

Again I'm no expert on these matters so don't want to give you duff info but we arranged the mortgage through a reputable broker and are now with Natwest so no probs really.

Doozergirl

SaveTheCheerleader wrote: »

Basically the mortgage companys wouldn't lend us the amount of money we required based on our income so we did a self certifcation mortgage (where you don't have to supply payslips, normally for self employed persons). They were then happy to lend the money but as we are a 'higher risk' they would only lend at a higher interest rate, 5.09% two years ago and 6.05% now.

That's called fraud Used to be ever so popular.

Lenders are tightening up their restrcitions - you'll be lucky to get away without showing payslips these days plus those income multiples are there to protect you aswell.

southernscouser

Doozergirl wrote: »

I think you are allowed to be treated like a grown up

Woah! Lets not do anything silly here! :rotfl:

southernscouser

OK, I've got loads of questions so none of you disappear or I'll hunt you down! :mad:

What are peoples opinions/advice/preferences on;

1) If buying/renting a flat, what floor do you suggest? I don't like the idea of ground floor but can see the practicailty's. But I'm a strapping lad (so my mum says ) so not too much of an issue from that point

2) 30 year mortgages? I imagine you're all hearing alarm bells right? :rotfl:

3) There was something else but I forgot! :doh:

summerday

Hi SS,I can understand that you're keen to get your own place, and it's good that you're trying to get as much info as possible. Me and OH bought a house 4 years ago, when we did everyone told us not to as prices would drop soon and we would be in negative equity etc etc etc, well I'm very glad we didn't listen, our little house has gone up a modest amount in value and we have so much enjoyed making this place our own. As long as you are willing and able to ride out any falls (ie not need to move) it's not such a big deal.I also think the 2 bed place is a good idea, to get a lodger, it will mean you get help with bills etc.I know it must be a pain living with your folks, but the more money you can save up for a deposit, the more it will help you, both in terms of reducing the amount you need to borrow and reducing your chances of being in negative equity. Save like crazy for at least a year, that's what me and OH did with him working 2 jobs and me 3 jobs, it was worth it. I think any outstanding debts you have may well reduce the amount you can borrow, so the lower the debt it the more it will help.Best of luck with it

Doozergirl

I like top floor flats because you get to steal all the heat that rises from the apartments below It gets hot in summer but you burn a heck of a lot less fule in winter!

southernscouser

saraht wrote: »

Hi SS,I can understand that you're keen to get your own place, and it's good that you're trying to get as much info as possible. Me and OH bought a house 4 years ago, when we did everyone told us not to as prices would drop soon and we would be in negative equity etc etc etc, well I'm very glad we didn't listen, our little house has gone up a modest amount in value and we have so much enjoyed making this place our own. As long as you are willing and able to ride out any falls (ie not need to move) it's not such a big deal.I also think the 2 bed place is a good idea, to get a lodger, it will mean you get help with bills etc.I know it must be a pain living with your folks, but the more money you can save up for a deposit, the more it will help you, both in terms of reducing the amount you need to borrow and reducing your chances of being in negative equity. Save like crazy for at least a year, that's what me and OH did with him working 2 jobs and me 3 jobs, it was worth it. I think any outstanding debts you have may well reduce the amount you can borrow, so the lower the debt it the more it will help.Best of luck with it

Thanks sarah.

I definately won't be doing anything until the debt has gone. And obviously I'll then have to save my deposit! But a whole year? :eek: :rotfl:

For my own sanity I hope I'm out of here before then!

Maybe renting will be the better option short term! :undecided

I just worry that it won't feel like my own place! Does that make any sense to anyone?