General Discussion: mortgage help


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sofasogud
sofasogud avatar

5198 posts since 13/3/03

5 Mar 2008 20:30
Haydn wrote: Im in the process of arranging a mortgage at the moment, everyones saying that i should get on the ladder as soon as really, im looking for it as a long term thing.

My current housemate, who also likes to think he's my financial advisor tells me i shouldnt be buying at this time.

I've looked into it and on the south coast, house prices have dropped by roughly 2% each month over the last few months, however, the way i see it, im going in for the long run, so if there is a recession, i should be ok right?

It depends if you have any money saved up and can afford the risk of a crash or can afford to buy when property is cheaper (it'll always pick up in value). Since the Northern Rock fiasco the days of 125% loans to first-time buyers are gone.
Crackajack
Crackajack avatar

7176 posts since 21/4/05

5 Mar 2008 21:49
Over 25 years property will generally rise in price and make a good return - you may find you cannot afford to pay your mtg with inflation on cost of living and interest rate rises though! You cant say wether its a good time to buy unless you know the persons current situation.

If you live at home or can rent cheaply stay as you are and save as much as possible - you will get a better interest rate on any home loan in future and will be in position to take advantage of any 'crash'.
Noble Locks
Noble Locks avatar

66963 posts since 10/7/03

6 Mar 2008 09:57
crackajack wrote: Over 25 years property will generally rise in price and make a good return

id love to see a property that hasnt risen in value MASSIVELY in the last twenty five years i really would…could you show us any that havent risen or have lost, hence you using the word 'generally'?
aitch
aitch avatar

8923 posts since 19/8/07

6 Mar 2008 10:10
I've been renting a room from friends for the past 2 years, paying less than average rent for the area. I'm just sick of living in this area and want to move closer to work and where most of my friends live. Rather than pissing money down the drain in rent again i guess i see it as a good time to buy, even though not many others are at the moment.

Im looking for a 3 bedroom place so i will let 2 of the rooms, with this i'll be able to afford the repayments, however im not banking on letting the rooms immediately as work might need doing and they might take a while to let.

This might sound like a dumb question, but if interest rates explode along with the cost of living, will the cost of renting rise also?
Hello World
Hello World avatar

12100 posts since 7/3/05

6 Mar 2008 20:49
People charge rent to pay their mortgage, if the mortgage costs more then the rent has to go up to cover it. In general renting costs less than a mortgage, either due to the owner putting more deposit down on a new buy, or the property being old and the mortgage was of a smaller value than the actual value now.
Crackajack
Crackajack avatar

7176 posts since 21/4/05

6 Mar 2008 23:14
Noble Locks wrote:
crackajack wrote: Over 25 years property will generally rise in price and make a good return

id love to see a property that hasnt risen in value MASSIVELY in the last twenty five years i really would…could you show us any that havent risen or have lost, hence you using the word 'generally'?


Well it depends - the people who bought these houses in areas of manchester, liverpool, oldham etc 25 years ago arent smiling now Eye-wink Im sure that isnt pertinant to the people who read these forums though as they are probably buying expensive houses to begin with Eye-wink

But im being pedantic, I just wanted to make the point that your house value can go up and down - you may be in -ve equity for 10 years then see a rise. Or you may sell your house for more than you bought it but due to interest payments still lose money!
aitch
aitch avatar

8923 posts since 19/8/07

10 May 2008 14:45
Saw quite a nice house today, and spoke to a mortgage advisor (estate agent). He wasn't the first mortgage advisor i have spoke to, but i was quite curious on the advise that he had given me.

He was aware of the houses that i was going to be looking at, and i asked him what sort of offers could i make on todays market. He replied saying that a lot of sellers are willing to take offers of 10% lower than the price that they are selling at.

Surely its things like this that can cause slow downs in the market? A few of the houses that i viewed today had been up for about 3 months, it doesn't seem surprising if estate agencies are telling people that they can get 10% off.
Noble Locks
Noble Locks avatar

66963 posts since 10/7/03

10 May 2008 15:00
thats the norm mate, always has been…its very very rare that you ever pay the full asking
aitch
aitch avatar

8923 posts since 19/8/07

11 May 2008 11:14
Always knew that people made offers, i just thought it was off that i was advised to make ridiculous offers like that.
Noble Locks
Noble Locks avatar

66963 posts since 10/7/03

11 May 2008 11:18
nothings selling mate, its the worst time in the housing market since you have been alive.
he was doing you a favour by trying to save you money, cos most people selling now will have been selling for ages and would more than likely take a 10% hit on any sale (from a one bed flat for 150k to a mansion at 1.5mill), and he fully knows that and shared that knowledge with a young and inexperienced buyer cos his firm needs the sale as bad as the vendor.
t_dot
t_dot avatar

6087 posts since 1/8/05

11 May 2008 11:20
yeah what noble says is spot on. Id say 10% lower offers were pretty common place in a normal situation, but in the current market you could easily offer lower and have it accepted if you find the right house / people.
aitch
aitch avatar

8923 posts since 19/8/07

11 May 2008 11:41
Cool Cheers fellas.

Homer
Homer avatar

23926 posts since 8/5/03

11 May 2008 12:03
Might as well start low, nowt to lose
aitch
aitch avatar

8923 posts since 19/8/07

11 May 2008 12:55
Looked at a new place yesterday as well, which was well over my budget. Told the representative there my budget and he basically cut 20% off the asking price without me even offering a holding fee.
AAA
AAA avatar

10012 posts since 15/12/02

11 May 2008 13:02
With 20k savings and a wage of 25K a year what sort of mortgage could you get?
Noble Locks
Noble Locks avatar

66963 posts since 10/7/03

11 May 2008 14:20
175
sofasogud
sofasogud avatar

5198 posts since 13/3/03

11 May 2008 16:25
Haydn wrote: Always knew that people made offers, i just thought it was off that i was advised to make ridiculous offers like that.

My financial advisor told me the same 3 years ago when the market was still rising. You go in with a low ball offer which they won't accept and they counter offer. I got 5% off mine.
aitch
aitch avatar

8923 posts since 19/8/07

16 May 2008 11:45
What is the best way to get a mortgage? Using a financial advisor or going straight to a bank?

Reason i ask is that a financial advisor some friends and collegues use has got back to me with a mortgage with Lloyds, its 6.69% interest only for 2 years, with fees of £1995. They claim they search the whole market, and that they don't charge a fee.

I walked into Natwest the other day and told them my circumstances, and the best deal they could find me was 5.99% interest only for two years with fees of £999.

I would have thought the financial advisor would have found this mortgage product. Has anyone on here got a mortgage with Natwest or Lloyds? Natwest is looking the most attractive at the moment as the repayments are about £150 less.
andymakesglasses
andymakesglasses avatar

20226 posts since 26/1/06

16 May 2008 11:53
in my (incredibly limited) experience I would advise going direct to the bank

I went to see my bank (RBS) first and then an "independent mortgage adviser"

the bank were extremely helpful and went through all of their products with me to (seemingly) genuinely find the best product for me. I'm self-employed so over the year the money I save to pay my tax (a few grand) is building up but essentially useless to me, so an offset mortgage makes perfect sense. The woman at the bank compared it to their nearest mortgage and we found that over the course of the mortgage's life I would be thousands of pounds better off with an offset

when I saw the independent mortgage adviser he seemed to be pushing a couple of particular mortgages, and when I asked him about offset mortgages he said "they're no use for you, you have to have savings of 50 grand plus to make it worthwhile"

conclusion - independent mortgage advisers get a lower fee for selling offset mortgages Laughing out loud

dealing with a bank direct you should be able to be confident that there are no ulterior motives behind their advice
aitch
aitch avatar

8923 posts since 19/8/07

16 May 2008 12:00
Thats what i thought, immediately when i saw the high fees for the mortgage with Lloyds, i imagined that is the reason why they recommended it.

Its funny looking at the Lloyds site, that their highest fee is £895.