First time buyer 110% (or more!) mortgage

kurt-sam

Does anyone have ane experience of these? We are thinking of buying our first home but one of us (not me!!) has large debts. We would be able to afford much higher repayments without the debts to pay. We both work in secure jobs (nurse and policeman) although I'm part time at the moment having had a baby.

As this is my first post I apologise if I've got the jist of this site completely wrong but I'd appreciate any experiences or advice going!

Fairdo_2

Hi kurt-sam and welcome to the forum.

It looks to me like you may have a few options that may be worth further investigation (sorry to the policeman, not meant as a pun!)

You have the above 100% mortgages through the likes of Northern Rock (Together - the most established version of this model), Coventry (Moregage) and Mortgage Express (can't remember its name off hand).

Based on the Together through Northern Rock, the general model has been designed to assist in the purchase of a property, the ability to "Help with Costs" and the ability to consolidate existing loans into the same as the mortgage rate over a longer term than the usual unsecured loans.

The other possible option that is smacking me in the face is that you would both be eligible to apply for the "Key Workers Home Start Initiative" (as long as you are both first time buyers). This means that you could get a property fitting your status with assistance from the government or social landlord with a smaller mortgage, as you could qualify for an interest free loan for part of the equity in a property.

lush_walrus

I would agree with the point above regarding the keyworkers scheme, although that is restricted to area and they do have more than one scheme accoding to whether you are buying a new home or not. Also the application can be quite lengthy, but ultimately worth it. They also have restrictions, such as income maximums and your actual needs particularily whether you can forefill them without their assistance, but if you are looking into 110% mortgages etc then I would say that you will be eligible.

110% mortgages are never a good idea, you are effectively borrowing against the property more than it is worth, so what if your circumstances change and you need to move?

kurt-sam

Hi thanks to both of you for your help. We have thought about the key worker scheme, and I do want to try and apply for it. If things don't work out and we end up continuing to rent I'm sure they wouldn't mind having the cash back!!

I'm the only one who will be eligible for the scheme where we plan to move (Bristol), and as long as they don't mind that I may still be part time it seems a good plan. Thanks for pointing out that it takes some time, maybe I should call up and see if it is a feasable option.

As silly as it sounds, I hadn't thought about the fact the mortgage would be worth more than the house :rolleyes: . As we are moving from another city, and have no house in mind yet perhaps we should continue renting for the time being if the key worker scheme is a no go. For this to be a feasable option we would need to find a house and an area we are sure we want to be in for the forseeable future, something which would be harder when property hunting from a distance.

We will never be able to save any money in the near future though, as we are paying out about £550 a month on loans, CC etc. Most of his debts are consolidated (they take up the lions share) already.

Excuse all the waffling, sorry!

Fairdo_2

Take on baord lush walrus' point about mortgage more than property value, but bear in mind that, as partner has all these debts mentioned, you would already be in that position anyway.

The way the Together mortgage works it has a maximum of 95% on a secured mortgaged basis. Therefore, anything above this would be on the same rate, but on an unsecured basis.

I am not trying to sell this type of mortgage to you, but I want to you to be aware of the facts.

kurt-sam

Thanks for that. I will look into it.