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Thread: mortgage advice

  1. #1
    DF VIP Member whatnow's Avatar
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    Default mortgage advice

    After three or so years I've finally managed to fix a problem I had with my credit scoring. The only problem is I'm now just so happy that I can get one that I need to be careful that I don't get burnt with the one I chose.

    I ended up getting a few quotes from my own bank's lender - C&G because they take my personal finances into consideration - other lenders didn't and I've been refused in the past. My actual bank recognised my 14 years with them and were offering me a whole host of packages.

    Ok, first of all I've got a part ownership in a flat, and that needs to be sold. But it's mortgage free. - this is my deposit, plus some savings money. I'd hope to have about £70,000 from this.

    My options are to buy a Flat or a House... the latter is obviously preferable. Either purchase will need modernisation, I'm not into paying premiums for 'move into' places.

    1-2 bed Flat purchase prices are about £130k-£160k
    2-3+ House purchase prices are about £185k+

    (same area)

    My two borrowing amounts are about:

    Borrow £70k - £80k and it'll be a 17.5-20 year term, payments of about £260+ a month.
    Borrow £110k - £120k and it'll be a 35-40 year term, payments of about £600+ a month.

    now I know it's my decision but I just wondered if anyone had sensible experience or advice for me. I know I'm better off borrowing as less as I can, and that's reflected in the payments, but flat prices are quite high in bristol and house prices are coming down, so maybe i'm in a good position to take advantage if i stretch myself.

    Am I best off borrowing as much as I can afford?

    I'm still trying to work out my finances so I don't have a maximum per month I can pay back, but I planned to use my savings if I get in trouble with payments, I'm happy to live cheapily and I'm also happy to rent rooms out to friends/people to help subsidise costs in general (and be prepared to suffer when they're not paying and i'm renovating).

    I just feel like i'm on my own a bit, my family are a bit glassy eyed about it and just say borrow as much as I can, buy a house blah blah blah... but i'm trying to think sensibly.
    I'm new to this :huh:

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    VIP Member CzarJunkie's Avatar
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    Default Re: mortgage advice

    Quote Originally Posted by whatnow View Post
    Borrow £70k - £80k and it'll be a 17.5-20 year term, payments of about £260+ a month.
    No wonder the banks are in trouble, I'd snap their hands off for that deal. Presumably thats interest only?

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    Default Re: mortgage advice

    Quote Originally Posted by CzarJunkie View Post
    No wonder the banks are in trouble, I'd snap their hands off for that deal. Presumably thats interest only?
    I was just about to say that...my £83000 fixed rate repayment over 23 years is around £560/ month and thats the best I could get via a personal friend of mine who is a mortgage adviser about 18 months ago!!

    I wouldnt touch interest only.
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    DF VIP Member hxbro's Avatar
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    Default Re: mortgage advice

    Might be better asking on money saving expert, you have a huge deposit so I'd expect you'll be able to find a good deal.

    If you borrow less, you can always over pay which will mean clearing it a lot sooner and saving you thousands. I wouldn't stretch yourself, it would only lead to problems and leave you no spare money, it could although with the large deposit unlikely, leave you in negative equity.

    Do some research into the areas you are considering, find out how much prices are dropping in the area, find out the prices of recent sales, don't offer anywhere near the asking price, houses are over valued and will drop in value over the next few years.

    Stay away from new builds unless you can get a very good deal, e.g. 20% + 10k worth of extra, the value of a new build drops quite quickly and they are over priced. The good thing is they are desperate to sell so it's easier to get a decent deal. Do a lot of research on the company building it if you do consider, some are worse than others.

    We are looking at some of the villages/towns around bath rather than in bath, prices are cheaper, and we are looking at upto 180k but I'm going to be offering 15 - 20% less as initial offers, my ideal house price is going to cost me 155k but we are willing to go to 165k

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    DF VIP Member urbsy's Avatar
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    Default Re: mortgage advice

    What ever you decide to buy have a look at Australian type mortgages where the interest is calculated daily and you pay it weekly, this literally knocks years off your term in an instant.
    I've had quite a number of these through Yorkshire bank and can't fault them.

    The housing market is a swine now, in the early days the banks were chucking money at you, now it's very hard game to play.
    I had 3 personal mortgages running concurrently at one point with not a cat in hells chance of earning enough to qualify for any of them but they didn't care as long as you paid. You could make some serious dough in a short space of time if you were prepared to take it on, and a lot did.

    I feel sorry for the peeps getting on the ladder nowadays with the house prices as they are, even bags of shit are bringing strong money it's barmy.
    Drugs are only a problem to people who can't afford them.


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    DF VIP Member whatnow's Avatar
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    Default Re: mortgage advice

    thanks for the advice on this so far people,

    currently i'm trying to just mvoe forward in terms of getting an offer on my place before I go making further plans for what i'm doing next. The property market in Bristol is slowing right down, and prices are dropping. I'm very tempted to sell for a loss on my flat which will enable me to purchase much larger places (that I'd never dreamt of being able to afford previously) and take advantage of this current housing situation.

    It's interesting to know how it'll all pan out, if listing prices and sale prices get closer and closer places will fall to lower values and people will be despirate to sell for financial reasons.

    I've seen some real cracking places. One house, semi-detatched, great location and next door (indentical) just sold for £330,000. It's on the market for £200,000 and I'd only raise an offer to £180,000 subj to survey. It's hard to not think that it's a absolute bargain, could be three flats with the basement & loft space it's got. Garage, front back and side gardens, edwardian period. Just needs a LOT of work. edit: but I would never convert, it would also make a smashing house

    and then there's decent little 1-2 bed flats dropping to just over £110,000 - £140,000 in the same area.

    It's really very tough knowing what do & trying to not get cloudy judgement from something that's unrealisticly difficult to turn around without risking everything.

    safe as houses? fuck off!
    I'm new to this :huh:

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