Mortgage help please :)

[SparKeh]

donations welcome.

nah seriously though, i am looking to buy my first house and i could do with some information. I'm a busy man so getting into town to find out about it all is a bit hard, plus i dont want a mortgage adviser telling me something and i've not got a clue wtf he's talking about so a little research before hand would be wise i thought

I cannot afford a big mortgage at the moment however the houses in my area are quiet expensive (for northern ireland anyway) for anything basic. Yes i could move to a different/cheaper area but i need to be close to here for work and all the rest. At present i dont fully own my own car so thats why i would like to stay in the area as well. Anyway i've been told theres a mortgage called "co-ownership" or something. I've heard a few things about it but i found it quiet confusing and it wasn't official (people telling me what they know but they all seem to be saying different things). Could anyone explain to me what exactly it means and how it works?

I'm hoping someone here will know

Cheers

 

[Doomy]

When my girlfriend wakes up tomorrow i can ask her if you like. Shes a mortgage underwriter and has been for 3 years.

 

[SparKeh]

that would be great cheers

 

[Tom]

My advice Sparkeh:

Start saving

Seriously though, work out what you can afford, then add 5% to the interest rate, and see if you can still afford it.

 

[Doomy]

Shared Ownership...

Say you buy a house for 100k or want one, you get a 30 grand mortgage and share 30% of the mortage with the housing asosciation (they would own the 70%). So you would pay a mortgage on the 30% and then a nominal rent to the housing assosciation for the remainder (for example £250 mortgage £100 rent) You will need to have a minimal of 3% savings of the amount you are going to purchase and there is a fee the housing assosciation will take which can be small and large depending on where you want to live (Milton keynes could cost you £10000 for example). The housing assosciation will have a 2nd charge on the property which means if you default on the mortgage the lender will get their share of the property back first. You would also have to put your name on a waiting list which can take different amounts of time, also dependant on where you live. The only banks she knows off hand that do this service is Abbey National and Halifax.

That was her rattling on at me, hope it makes sense.

Check with your housing assosciation that deals with the properties in your area i guess and put your name down on a list now as even if you decide against it.

 

[SparKeh]

i sort of need to be able to afford it without sounding like a spoilt brat, or i'll be homeless. My mum has ran off with her boss and will be moving to england soon with him as he got transfered in the army and now my dad's seeing his ex-finacee again who broke his heart bout 30 years ago. Anyway to cut a long story short, im not moving to england, im not living with my dad and his new gf. So it leaves me 2 options. 1) move into a council estate 2) sort out a mortgage

The council estate is the cheaper option but in nireland they are quiet rough places full of paramilitaries which i cant really be arsed with. Its not the type of area i was brought up to live in and i would rather not downgrade myself to a wee pokey flat that gets its windows put in every other week. My parents want to get me on the property market anyway so are gonna pay a 10k deposit or something for me to get me started as my gf and i are not in particularly highly paid jobs yet.

 

[SparKeh]

thanks doomy + gf

 

[Tom]

My financial adviser managed to secure a 5 year capped rate mortgage on a house that i wouldn't have normally been able to get, because the average profit I'd made over the last 3 years (when I was buying it) didn't add up to the necessary 3.5x

They wouldn't take into consideration the fact that my profits were going up each year with more work coming in. The only thing he got out of the deal was the commission on the assurance policy I took out, which I think I still have

 

[xane]

So it leaves me 2 options. 1) move into a council estate 2) sort out a mortgage .

I must have missed the bit about why you can't get private rented accomodation.

 

[Tom]

Its funny really, over here, renting a place is seen as wasting money. I can understand that, after all, I bought my own place. If you go on the continent, many more people rent their homes.

Is renting much cheaper than mortaging over there?

 

[SparKeh]

I must have missed the bit about why you can't get private rented accomodation.

I see it as a waste of money tbh. Over here its about 450->500quid a month for an unfurnished place. I dont know what thats like compared to england but if your paying that, and bills then it doesnt leave an awhful lot of spare money. Surely the money would be better spent on a mortgage i thought.

 

[L_Plates]

The only advice i can give is wait till the prices drop. They are sky high here at the moment not sure if its the same were you are.

I bought my house for 50,000 and its now valued around 100,000 2 years later.

Save up and wait a little if the prices are the same.

 

[throdgrain]

Sparky mate, I dont know how expensive houses are in N.Ireland,but if your getting 10 large as a deposit for free you'd be mad not to go for it, as longas you can afford it.
Im with Nationwide for my mortgage, it's a £48k Ive had for 5 years and I currently pay about £320 a month.
Id have a look at them, they regularly win best mortgage provider awards. Also, if you can, always go for a repayment mortgage, always try to avoid an endowment mortgage.

 

[old.user4556]

My advice would be to save as much as possible for a deposit, as there are other things to take into consideration such as valuation and conveyancers fees to pay, building and contents insurance in addition to buying the house.

You've also got to watch the rising interest rate by the bank of england, as a variable rate mortgage might be cheaper per month just now, but by the time the rates go up, a fixed rate mortgage would have been a much better idea (Gordon Brown is really pushing for fixed rate).

I'm not sure about this co-ownership thing, but alternatively you could buy a two bedroomed place and rent out the other room to a mate or someone else which would help pay about half or 3/4 of the mortgage payments. Failing that, look for someone to actually buy with if neither of you can afford to buy yourself. For two people on an income of £15000, you could look to borrow about a maximum of ~£120,000.

Working for a bank myself, there are no signs of the interest rates going down nor a slow down in the house price market. The sooner you get on the property ladder, the better. It's a bit rich coming from me, 'cos i still live with my parents and I can afford to move out, but I'm waiting until my girlfriend finishes uni so we can use two incomes to buy a better place.

Sorry this doesn't answer your original question, just my own personal musings .

G

 

[Vae]

Interest rates are very likely to be going up in the near future. Predictions at the moment are that the base rate could reach 5% later this year. Fixed rate for at least 5 years would be a better and safer bet than a variable rate mortgage.

On the of rent vs buying, renting is seen as wasting your money but often people don't take into account the fact that the interest you are paying on your loan is what you should compare to your rent.
e.g. £120,000 loan at say 5% = £6000 per year
That's the equivalent of 500 per month rent.

Renting you won't be paying repair bills or buildings insurance either but you will miss out on any gain/fall inthe value of the property.

Generally you would expect buying to be a better option though as people would expect a higher return on renting than the interest they'd be paying on their mortgage but its just worth remembering.