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General Chat Thread, First Time Buyer and Mortages in General; I know this is not relevant to IT in anyway and admin remove me if im making a mockery of ...
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    First Time Buyer and Mortages

    I know this is not relevant to IT in anyway and admin remove me if im making a mockery of a sham...

    But, Im about to move into a flat which i will be living in for 12 months before buying it. Its a relatives flat and he is just glad for someone to be living there keeping the place safe and in good order etc..I'll just be paying the bills each month and thats about it.

    After 12 months I will be buying the flat, the 12 months will give me time to save a decent deposit hopefully 10% of the value.

    But as a first time buyer in 12 months time do you think i will have trouble getting a mortage. I know 12 months is a long time and this can all change in that time but any opinions or information appreciated. The martage would be no more than 3.5 times my wages at present.

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    plexer's Avatar
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    To be honest it sounds like you are in a favourable position the 10% is what people are recommending at the moment I suppose if you could manage 15% say then that would give you a bit more leverage in 12months time becuase as you say no one can predict the market at the moment.

    If you couldn't get the mortgage you needed in 12months time would he continue to rent it to you?

    Ben

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    ICT_GUY's Avatar
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    With a 10% deposit? They will bite your arm off!

    The days of people having a 10% deposit were long gone, its the 100% or even %115 mortgages that got the banks in serious trouble (and also fuelled the crazy house price inflation).

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    Friez's Avatar
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    Also consider you might not *GET* a mortgage since the banks are being pretty tight with their lending now.

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    plexer's Avatar
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    Unless you now have a 10% deposit you are likely to not get a mortgage offer.

    Ben

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    Quote Originally Posted by ICT_GUY View Post
    With a 10% deposit? They will bite your arm off!

    The days of people having a 10% deposit were long gone, its the 100% or even %115 mortgages that got the banks in serious trouble (and also fuelled the crazy house price inflation).
    The days of that are gone now. The absolute minimum is now 5%, with most people recommending you save up 15%.

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    MK-2's Avatar
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    Plus reports today say that house prices are set to drop a further 9% this year.

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    coquet636
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    No need to worry

    There is alot of scaremongering in the press fueling people to believe were all gonna lose our houses and end up back living in huts.....

    If you have a deposit you will get a morgage, Its just the special offers and lower rate morgages that are hard to get. Yeah you will probably be paying a high interest rate for the time being. If you can afford it then fine, then in 5 years time when this gloom lifts your on the market and will probably be in a better place for moving up the ladder.

    If you arent planning to stay in the flat more than 3-5 years its probably not a good idea as the value is likely to go down before it goes up so if its short term i would say no, but long term definately.

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    Quote Originally Posted by j17sparky View Post
    The days of that are gone now. The absolute minimum is now 5%, with most people recommending you save up 15%.
    Halifax are still offering 3% (MAX LTV 97%) Halifax Mortgages | FTB Choices for 1st time buyers. A good way to end up in negative equity. but its still possible.

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    First time buyer here, well not for a couple of years, on the money i earn in the place i live there is no hope of buying. Will just have to keep renting for another 18-24 months and hopefully the drop in house prices continues and i'll be able to afford a modest flat somewhere.

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    Quote Originally Posted by CyberNerd View Post
    Halifax are still offering 3% (MAX LTV 97%) Halifax Mortgages | FTB Choices for 1st time buyers. A good way to end up in negative equity. but its still possible.
    Negative equity is only an issue if:

    1. You cant afford the mortgage payments and bank has to reposses
    2. You are selling

    Any other situation and you can cope with negative equity.

    Banks are still lending, giving out mortgages, loans, credit cards, etc.

    You should be able to get a 90% mortgage at 3.5x your salary without any issues.

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    somabc's Avatar
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    I heard some lenders will want a 25% deposit. It depends on your credit history. If you have made any slip ups, even minor expect to find it very difficult. Banks are not at all into any sort of "risk" now. If you have a good income, a hefty deposit (at least 10%) then it should be alright. Note: for the 97% Halifax you will need an HBOS Current Account into which you pay your salary otherwise max LTV is 90%.

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    My bro is a business advisor for a major bank and his wife is a mortgage advisor - They both say that prices will hit their lowest at the end of this year before starting to rise again.

    I got a mortgage AIP the other day on my pretty lowly wage with 10% deposit and they said I was allowed up to 109,000 - that's quite a lot.

    I'm going to buy a house at Christmas - Wilf says that'll be the best time to buy.

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    somabc's Avatar
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    TBH anyone who says the market will bottom out this year is just guessing, it is almost certain prices will fall for the rest of this year, but for how long?

    The Governor of the Bank of England today said Britain faces its worst financial crisis for 20 years. The credit crunch, inflation etc. could all be combining for a perfect storm that makes the next decade look more like the 1970s (and hopefully not the 1930s).

    BBC NEWS | Business | Bank governor offers bleak view

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    Quote Originally Posted by Hightower View Post
    I got a mortgage AIP the other day on my pretty lowly wage with 10% deposit and they said I was allowed up to 109,000 - that's quite a lot.
    Wouldn't buy you much around this area, 1 bed flat if you were lucky.

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