3.5 X Combined Salary + Low fixed Rate? Does it exist?

Rob_B_8

Howdy folks!

Me & my girlfirend are looking at getting a house/flat in the Edinburgh area, we have the option to hae a 5yr fixed rate of 4.45% and no setup fees as i work for The Royal Bank of Scotland but they will only lend us 2.75 X our combined incomes which is a measly 65K, we want & can afford a mortgage of 80Kish and have had a quick scout around for other rates. (looking for 20yr mortgages which at 80k is about £500/month)

Nationwide would (hopefully) offer us 82K (3.5xsalaries) at 5.09% or 4.69% if we pay a 'reservation fee' of £389!! (with a 10% deposit)

Is this any good or are there better out there?

To sum up we want:

Fixed rate for 5yrs (maybe more)
Lending of 3.5xsalaries
Ability to overpay
No stupid hidden fees (ie setup ones or overpayment ones)

Can anyone help?! This has been made more urgent by the fact we viewed somewhere perfect today we thought was in our budget but was mispriced so sad faces all round

YorkshireBoy

Check this thread, particularly post #2...

http://forums.moneysavingexpert.com/showthread.html?t=88027

herbiesjp

There are quite a few schems that offer what you are looking for.

However, you need to be a little clearer on the overpayments yo want to make - with nationwide you overpay by £500 pm - is that enough? Other lenders will offer a 10% yearly capital repayment? If you exceed these levels then you will incur Early Repayment Charges - one of the fees you said you did not want.



With most mortgages you will have set up fees, or else pay higher rates, as you have found with Nationwide - you will have to number crucnch to see which method would be better off for you

Rob_B_8

overpayments would never be more than a few hundred/month so upto £500/m is fine, yearley i see 10% of initial amount is kinda average.

Where are the best buy tables? ive looked at money facts but theres so many ways you can view em im confused!

EDIT: Is it ok to get loads of agrrement in principles from different providers? i already have one from my work but yorkshire may be better than A&L but wont lend us as much (only 3k difference so thats why the property price is a BIG factor)

meanmachine_2

Try this link and scroll down.

http://www.moneysupermarket.com/mortgages/mortgage.asp

To be honest, you should have your pick of mortgage deals.

Rob_B_8

Just printed a KFI from A&L

5yr Fixed @ 4.54%
£30 telegraphic transfer fee
£245 basic mortgage valuation fee (i want more than basic dont I?)
£395 product fee (added to mortgage)
upto 10% overpayment
and they'll lend us upto 80k!

Good deal?

EDIT: Can someone just look at this for me? It says you can overpay <£500 and it takes effect the end of the month, £500+ that takes effect straight away, but it says you can make a penalty free Overpayment every Jan over £500, does this mean there are fees for any other overpayment? or just that if you say paid off more than 10% of the amount it wouldnt incur fees like it normally would? http://i5.photobucket.com/albums/y176/rob_b/overpayment.jpg

YorkshireBoy

Rob_B wrote:

5yr Fixed @ 4.54%

Can you meet their LTV requirements? Any tie in to SVR or ERC's after the 5 years?

Rob_B wrote:

£245 basic mortgage valuation fee (i want more than basic dont I?)

This valuation is not so much for you as for them. It's so they can check the property affords adequate security for their loan. If it's an older property you might want to consider a more thorough structural report, if it's new with NHBC guarantee it might not be as important.

Rob_B wrote:

£395 product fee (added to mortgage)

Save 25 years interest and pay it up front!

Finally, don't forget to factor in solicitors fees (as well as life insurance, council tax, water rates, gas, electric, telephone, property repairs, DIY tools and materials, food, clothes, holidays, car expenses, etc, as well as your mortgage payments). Welcome to the real world.

Good luck (especially with the overpayments!).

will-in-estoril

Rob_B wrote:

Just printed a KFI from A&L

5yr Fixed @ 4.54%
£30 telegraphic transfer fee
£245 basic mortgage valuation fee (i want more than basic dont I?)
£395 product fee (added to mortgage)
upto 10% overpayment
and they'll lend us upto 80k!

Good deal?

EDIT: Can someone just look at this for me? It says you can overpay <£500 and it takes effect the end of the month, £500+ that takes effect straight away, but it says you can make a penalty free Overpayment every Jan over £500, does this mean there are fees for any other overpayment? or just that if you say paid off more than 10% of the amount it wouldnt incur fees like it normally would? http://i5.photobucket.com/albums/y176/rob_b/overpayment.jpg

If you make a capital repayment on, say, 28th of month, your outstanding balance, and therefore monthly repayment, should go down two or three days later. However, if your payment date is at the beginning of the month you would have to wait until the next month to give A&L time to recalculate your DD.

I am currently with A&L, and may switch to the two year deal at 4.24%, which has a similar overpayment facility, which seems ok. Of course, you have to ring on 0870 number to speak to an advisor!

Rob_B_8

YorkshireBoy wrote:

Can you meet their LTV requirements? Any tie in to SVR or ERC's after the 5 years?

Yeah, deposit is no prob, site says only tied into mortgage for fixed period, think its £295 to move after that. SVR?

Not sure where to go from here though, got a KFI, do we

Find House
Goto A&L for proper checks & agreement
Get acceptance of amount to be loaned
Make offer
Get home insurance sorted
Pay
Move in

In that order? Bearing in mind we live in Scotland if that makes a difference?

Its a 5yr old property, how/who/when do we approach for full survey? the solicitor i assume?

Who'd have though its so much work?!

Will: I get that part but it says penalty free overpayments in Jan, leading e to ask are there penaltys any other time?

YorkshireBoy

Rob_B wrote:

SVR?

Standard Variable Rate - no-one should be on this deal in this day and age (but many are!)

Rob_B wrote:

Its a 5yr old property, how/who/when do we approach for full survey? the solicitor i assume?

No, it would be the lender in England. They should advise you, but at the end of the day it's your decision as to the type of survey you go for.

Rob_B_8

Just to keep anyone informed... we've offered on an 86k house (fixed price) & are waiting for the survey, kinda hard work but quicker than we expected!