FTB Mortgage checklist, ideas please!

Rob_B_8

Me & my girlfriend are looking into getting a house very soon, we've not checked what we can borrow yet but i'm getting together a list of things that we need to check, so far its small & i'm hoping people can provide some more!

This is not a perfect list, i appreciate constructive criticism & i'll try to edit it with things so others find it useful too.

We want about an 80k house, deposit of about 7/8K so around 10%





1) Avoid MIG/MIP (usually only arise on high % mortgages?)

2) As rates are low (aug 05) a 2/3 year fixed rate would be good to start with

3) No early repayment/overpayment charges. Find a mortgage that lets you overpay upto 10% a year, even if you cant afford it now you might do in the future, remember there is usually a min overpayment (~£200)

4) Avoid 'Rule of 78' (is this still around or not?!?)

5) Check your credit reports, you do not want any untruths to appear on them as your prospective lender will see them too (http://www.joincreditexpert.com/index.asp, http://www.equifax.co.uk/)

6) Be wary of existing debt as this can count against how much some will lend you.

7) Have your P60's, bank statements, utility bills, job history, employer personel office address and telephone number on hand

Good rates at the moment > http://www.moneyfacts.co.uk/mortgages/charts/mortgages_fixed_noext.htm

KTF

For point 2 I would have thought that daily and monthly interest makes no odds given that you are only making the payment once a month. If you are planning to overpay then I can see if making a difference.

Some of the fixed rates can be found here:

http://www.moneyfacts.co.uk/mortgages/charts/mortgages_fixed_noext.htm

meanmachine_2

Yeah, I'd agree with all that.

Unless you're planning on overpaying regularly, then monthly interest calcs should be OK. Even then, if you plan it so that you overpay just before the re-calc then it should be fine.

Yes, I'd fix now.

No idea what rule of 78 is.

Where can you buy a property for 80k? And does it come a roof and walls for that money?!

Rob_B_8

well, you'll be suprised, but edinburgh....not centre obviously, you just need to know where to look!

herbiesjp

You could be looking at rates in the low 4%s

However this will depend on your incomes being sufficient to justify the loans, and affordability being there to pay other monthly expenses that go with buying a property.

You say no ERCs/penalties however I am gusessing you mean no extended penalties and happy to be tied in for the fixed rate period, provided you have the facility to overpay up to the 10% you mention

Rob_B_8

yeah, fixed rate for say 2/3 years we arent going to overpay by 30% of the mortgage in that time so its fine. To anyone with a 2 bedroom 'normal' (as vague as this is) house, with 2 people in it, how much are your monthly outgoings for elec/water/gas (varies i know but overestimate if anything!)

Joe_Bloggs

Check your credit reports. You do not want any untruths to appear on them as your prospective lender will see them too. Be very wary of existing debt as this can count against how much some will lend you. Have your P60's, bank statements, utility bills to hand. Also job history, employer personel office address and telephone number.You may need to have credit card limiits/balances and loan details. Many try to disguise where 'their' deposit came from.
Find a good conveyancing solicitor. Prefereably your solicitor should concentrate in this area and be a whizz at communicating with all parties.
J_B. (Just a few suggestions).

Rob_B_8

keep em coming! anyone know about if rule of 78 is still about? (heard it went for loans below 21k?) also can someone clarify on mips/migs so i can update?

Ian_W

Rob_B wrote: anyone know about if rule of 78 is still about? (heard it went for loans below 21k?)

Can't be sure, but I think it's in relation to smaller unsecured loans or HP rather than mortgages.
If it's what I'm thinking of it was a way under the Consumer Credit Act that lenders calculated what you owed if you wanted to pay a loan off earlier than the agreed term. It was disadvantageous to the borrower wanting to repay early - I've recently read somewhere [maybe this site] it has, or very shortly will be, changed.
If it had applied to mortgages most of us wouldn't swop as often as we do as a pile of interest would have been payable for early repayment!!

Rob_B_8

thats why im asking, wasnt it that you paid interest off before the capital therefore the new interest was on the full amount of capital still not that you paid off capital first therefore lowering the new interest? i read a while ago it was going but couldnt find out if it had

Ian_W

Rob_B wrote:thats why im asking, wasnt it that you paid interest off before the capital therefore the new interest was on the full amount of capital still not that you paid off capital first therefore lowering the new interest? i read a while ago it was going but couldnt find out if it had

Errr.. Yeh... something like that!!

But what I was saying is it applies to smaller unsecured loans and HP NOT mortgages - so why would you want it on a mortgage check-list?