My first house my first mortgage nightmare please help

sas1_3

I can’t even sleep… My problem is that Abbey approved my 100% mortgage in January and since I have renegotiated the sale price a bit less (£2500) so my solicitor went back to Abbey for approval but since they pulled back their 100% product. I am looking to complete on 25.04.08 and gave notice to my landlord so I will have to move out. I am in this nightmare situation that I don’t know now if I am going to get the mortgage and if not where am I going to move?...
Does someone have the same situation? Will Abbey approve as I already had my mortgage principal agreement? Please Help!
I am new to this site and hope that someone might be able to help me.
Thank you

glen8

I think mortgage principles are held for six months

pinkshoes

Have you exchanged contracts?

Given all the news and media coverage about withdrawal of 100% mortgages in the last few weeks, did you not think to contact your mortgage lender to check things were ok? I think they can pull out of the deal if they find it a risk.

It's too much of a risk for lenders to give 100% mortgages now, as there's not guarantee that the property price will rise, thus they could potentially have to chase you for the debt should you sell.

Why not find somewhere else to rent, or speak to your current landlord, and save up a deposit? Most mortgages want 10% nowadays.

neas

I find it funny that you don't ask yourself WHY the 100% mortgages were pulled...

or WHY you are buying a house at 100%... BECAUSE you haven't BEEN ABLE to save ANY MONEY.

Its a bad sign getting a mortgage at 100%, especially when you through in negative equity as well... I know you really want this property but please look at the market at the moment... this might save you alot of money in the future and stop you from making a stupid mistake.

If you buy now, you will struggle to repay your mortgage, potentially leading to years of negative equity ( You can't leave because house is worth less than your mortgage) And maybe even repossession.

Can you really afford this propetry? Do you have 0 debts, 0 credit card debts? Some savings?

Whats your mortgage rate? Interest only?, Repayment?

Whats your income per month, Whats the mortgage per month at the moment?

sas1_3

The seller already signed the contract and I am about to do it but still waiting for Abbey’s answer. My mortgage had been approved until august but I am worrying for the exact reasons you state.
Landlord found the new tenant so I will have to move.
Please note that I am debt free and have some saved money which I can use as contingency for rainy days instead of deposit.

sas1_3

Nease,

Please see my answer to pinkshoes. Yes i can afford it. I am buying on my name but have a self employed builder husband. The house is below market value as it needs complete refurb. The area where i am buying going to have a fast train link to London next year and I am looking to get in a tenant.

neas

If you do proceed understand that houses are dropping..

You Pay 100 (100% mortgage).. House was valued at 100

5 Years Pass.. house is worth 75.... you still owe 95k...

All your contingency should be shovelled into the mortgage (baring 1-2k for personal things).. so as to reduce the compound interest you pay. Mortgage rates will rise...

Whats your 100% deal on? Fixed for 2 years?

sas1_3

Yes i heard the news it is everywhere hence my first post. The bottom line is that i am not buying for 5 years but for life and historically property prices will go back, yes they go down but will go back. It happened after the 90s recession.
My mortgage is a tracer 1.34% above the base rate, fixed for 2 years so I am already paying more interest than many other people coming off 4.somthing rates and suffering because off the extra payment.
And yes I calculated how much it would cost me if the interest rate went up to 12% I could still manage. But I really hope this won’t happen for the Empire sake.

Generali

You should be ok as the mortgage was approved in principle and now you're looking to borrow less, ie within the criteria of the original loan.

To Neas especially: It's more helpful to the OP if we stick to the subject (will Abbey still lend the money) than start making predictions about what we guess is going to happen to house prices in the next few years. There is an entire board full of threads dedicated to the future value of houses.

silvercar

You haven't got a major problem yet.

Although you haven't got a mortgage offer, you haven't exchanged contracts, so you could walk away and owe nothing. The real danger would have been if you had exchanged contracts before your mortgage came through.

As you are buying to refurb and your husband can sort the work, I expect you are getting a good deal, though the fact that you can see that you will need a tenant to pay the bills is a worry. Are you moving in to the property with the tenant?

sas1_3

Nease so you don't have your house? Yes you need to have guts to get one and there is always an excuse to delay buying. As it stands you have the best possible climate for your reasons.
Appreciate your comments, take care