first time buyer need some advice

t0mmy

Hi, im only 18 and a first time buyer and not really up to scratch with mortgages + figures. i've had an offer accepted on a property for 120,000GBP. Ive been to see a mortgage adviser and ive been told she will give me the best rates available.. yet later we called abbey to find they dropped there rate over a phone call. Due to my brother being self employed for only 1 year we are unable to get a standard mortgage. So we have no hoice but to go self cert. does anyone have any websites or any information on rates. I need to borrow 108,000GBP, the cheapest ive been told are Bristol & West Fixed rate@ %5.690 + 399GBP fee paying 512.10 a month. also they offer the variable rate fee-free currently at %5.850 paying 526.50 a month. Both mortgages are interest only. Should i go fixed or variable or are there cheaper deals out there! any info would be helpful. Cheers, tom.

meanmachine_2

My advice is that you're too young to buy.

But apart from that, go see a broker. They might have access to self certs that branches won't have.

GreenB_2

or better still see two or three brokers

Doozergirl

You will probably get more replies on the mortgages section.

I think you can get 5.15% fixed rate with the Coventry Building Society, but you'd have to find an 15% (£18,000) deposit. I think you generally need a more hefty deposit to get a good deal on a self cert mortgage?

Good Luck! Wish I'd bought when I was 18!

t0mmy

thanks yea ive scraped 12,000 but 15 would be very hard.. i just wanna get on the ladder early so im sorted out can't stand renting!. cheers, tom.

Paul_H_4

meanmachine wrote:

My advice is that you're too young to buy.

But apart from that, go see a broker. They might have access to self certs that branches won't have.

Why is he too young? I brought my first house with my GF when we were both 19, you can either rent a property and effectively pay someone else's mortgage or start paying your own off and have it finished by the time your 43.

A good place to start looking is http://www.moneysupermarket.com there you can enter current salary etc and amount you wish to borrow. It's then worth speaking to an IFA, a lot of estate agencies have mortgage consultants in the branches who usually do not charge you a fee thye just work on commission received from the lender.

Fixed is easier for budgetting however when the interest rates drop like on thursday you will be annoyed as your price will not change, it's a gambler either way as interest rates could go up although it appears they are likely to drop further in the short term future.

meanmachine_2

Why is there a link in your signature? Is that allowed?

To the OP I'd say beware the vested interest groups on this forum who will only recommend you buy now, no matter what your circumstances.

My advice would be to wait and save a little more so that you can reach the 15% deposit threshhold comfortably.

Buying when you're young is a gamble, of course. I have friends who regretted it as it locked them into jobs they hated, and others who think it was the right thing.

Generally I'd say it's crazy buying at the peak (or near peak) of any market, but I'm sure you've read up on all that anyway, since you seem sensible.

kinesin_2

t0mmy wrote:

I need to borrow 108,000GBP, the cheapest ive been told are Bristol & West Fixed rate@ %5.690 + 399GBP fee paying 512.10 a month. also they offer the variable rate fee-free currently at %5.850 paying 526.50 a month. Both mortgages are interest only. Should i go fixed or variable or are there cheaper deals out there! any info would be helpful. Cheers, tom.

Hi Tommy,

If your looking at an interest only mortgage then please realized that after 25 years you will still have to find that 108k from elsewhere to pay it back. :eek: The £526 would be in effect a RENT payment to the bank for living in THEIR home, but if anything goes wrong (boiler, cooker, plumbing etc) you have to hand over some crash to fix it. - not the landlord.

£526 will rent me a lovely place around these parts, and remember that rental prices/month can be negotiated - i.e advertised rents in the region £580-600 can be pushed down to £526. Off course you could alway rent somewhere cheaper and save the difference into a ISA etc..

House prices are failing.. 13th monthly fall was reported recently.. it might be a slow fall, but it's still a fall. Wage inflation in now above HPI. Time is now on your side: in 2 years that 108K mortgage might only have to be 88k - that extra 20k saved would cost you today approx 35k over the life of your mortgage once interest payments are taken in account.

Work the maths out yourself, check your local areas house prices. Check nethouseprices, look for trends, reductions, EA special weekends - it all pointing one way. Don't worry about the extra £15 you could have saved on your mortgage due to Thursdays IR cut.. The reality is that house prices are currently just massively overpriced, they will correct:they always have.

meanmachine_2

I didn't realise it was interest only.

In a rising market, these are a good idea, as they allow you to at least get on the ladder.

In a stagnant or falling market you *might* be better off renting.

If you can't afford a repayment when int rates are incredibly low (as they are now), then you can't afford to buy.

You must also factor in the interest LOST from your deposit as well as the legal and moving costs.