Michael Posted June 16, 2013 Posted June 16, 2013 I agree, 20% as a minimum (as above). Normally you can pay up to an additional 10% off your monthly mortgage payment without penalty, but please check before doing so! 1
SpuffMonkey Posted June 16, 2013 Posted June 16, 2013 I suppose the Life Insurance thing only makes sense if you have a family - if you're buying on your own it would serve no purpose at all - and the lender wouldn't lose out as they can have the house anyway... 1
sippo Posted June 17, 2013 Posted June 17, 2013 Steve, speak to Dave @ South West mortgages. We use him and he is spot on. Mortgage advice Swindon- South West Mortgage Solutions Limited - Mortgages Wiltshire - IFA Swindon 1
Tallwood_6 Posted June 17, 2013 Posted June 17, 2013 I agree, 20% as a minimum (as above). Normally you can pay up to an additional 10% off your monthly mortgage payment without penalty, but please check before doing so! 20% minimum .. that would be between £50-60k on the average house price here and if your in rented accomidation your usually hard pressed saving 10%! 1
crt404 Posted June 17, 2013 Posted June 17, 2013 Life assurance is not necessary - I've had three mortgages (the latest within 4 months) and none have insisted on it. The brokers I have used have all tried to sell it to me however, as it seems they get a healthier slice from this than they do the actual mortgage. There is a good article here: Mortgage Life Assurance: Cut the cost by 30%... 1
zag Posted June 17, 2013 Posted June 17, 2013 When we got ours, lloyds, hsbc, barclays, natwest, halifax, nationwide, santander, and alliance and leicester all said it was compulsory. Think it is an additional £21 a month for the both of us, every year it goes down £1 a month Sorry that's just not true. I did mine through Halifax and they get a large commission for selling you life insurance. It is not required. 1
elsiegee40 Posted June 17, 2013 Posted June 17, 2013 (edited) The real debate around life insurance is around the "What if... ?" question. If you were to die before the mortgage was paid off, what would be the impact? Your partner may inherit the house, but could they alone meet the mortgage payments? Is the mortgage only in your name? If you died it would have to be repaid and from your estate... i.e. the house would have to be sold, or your partner might have to get a mortgage in their own name to continue to live in the property. Personally, I would only consider a mortgage without life insurance if I alone lived in it. If there is anyone else involved, and there were no other means of paying off the mortgage in case of death, then I would get the insurance... just in case. Edited June 17, 2013 by elsiegee40 1
Andrew_C Posted June 17, 2013 Posted June 17, 2013 Current mortgage adviser was talking to us about life insurance. When he heard what my "death in service" payout would be, he said "don't bother", but my wife is covered so that if she pegs out, I get the house clear of debt. Life insurance DOESN'T pay out if you are just ill. For the Old Farts amongst us, critical illness is so **** expensive as to be prohibitive. 1
RTFM Posted June 17, 2013 Posted June 17, 2013 (edited) You get a mortgage in principal before you start putting in offers for houses. How can you put an offer in without knowing how much you can borrow? I think the mortgage in principal lasts 3 months or something like that. It's worth noting anytime you get a mortgage in principal or apply for a mortgage it counts on your credit score. Like applying for multiple store cards I'd start by seeing an independant mortgage advisor who will give you a no obligation first meeting, give you some ideas about what you can borrow and the repayments then you know where you stand and its cost nothing. It gives you a figure to work off without having applied for a mortgage in principal so you know what price bracket your looking at. You can then look at houses, find one and apply for a mortgage and providing your circumstances havent changed you should be ok Edited June 17, 2013 by RTFM 1
pcstru Posted June 17, 2013 Posted June 17, 2013 You get a mortgage in principal before you start putting in offers for houses. How can you put an offer in without knowing how much you can borrow? Guess? You may find in such a situation that the seller will keep the house 'on the market' until you confirm you have a lender in place. I'd start by seeing an independant mortgage advisor who will give you a no obligation first meeting, give you some ideas about what you can borrow and the repayments then you know where you stand and its cost nothing. These days, it's so easy to check what mortgage deals are available that an 'independent' mortgage or financial advisor should be unnecessary for a simple matter of a mortgage. If you do use one, be aware that they will cost you. Either they are on commission (so they are unlikely to recommend from the full range of products available) or you will pay them cash for their services which is expensive. 1
Michael Posted June 17, 2013 Posted June 17, 2013 20% minimum .. that would be between £50-60k on the average house price here and if your in rented accomidation your usually hard pressed saving 10%! That's very possible, but unfortunately if you put down less the available mortgages to you at a reasonable percentage are limited. It makes the difference in you getting a mortgage at 3% vs 6% for example. The more you borrow, the higher risk you are unfortunately. People on very low incomes could be forced to take mortgages up to their 70th Birthday, but personally I don't know any 20 year olds with a 50 year mortgage! Sounds scary! 1
SpuffMonkey Posted June 17, 2013 Posted June 17, 2013 And do bear in mind that there is only one way that interest rates are going to go in the future - and that is up! 1
Michael Posted June 17, 2013 Posted June 17, 2013 And do bear in mind that there is only one way that interest rates are going to go in the future - and that is up! Exactly - they've never been so low for so long, so the odds are they will hit double figures in future. I'd guesstimate 10-12%, so not as high as the mid 1980's which peaked at an eye watering 18%. 1
RTFM Posted June 17, 2013 Posted June 17, 2013 Guess? You may find in such a situation that the seller will keep the house 'on the market' until you confirm you have a lender in place. I wouldn't personally be 'guessing' how much i could borrow and how much that would cost a month when you can go get a free no obligation figure from a mortgage advisor These days, it's so easy to check what mortgage deals are available that an 'independent' mortgage or financial advisor should be unnecessary for a simple matter of a mortgage. If you do use one, be aware that they will cost you. Either they are on commission (so they are unlikely to recommend from the full range of products available) or you will pay them cash for their services which is expensive. As I had said, most of them will do a free no obligation first meeting to discuss your case and give you some base figures (they do around me anyway as i've sat with a couple and done it). If it costs nothing and can eliminate the need to 'guess' its probably worth an hour of time to do it If you phone and speak to them and they say they'll charge you, find another........ 1
Andrew_C Posted June 17, 2013 Posted June 17, 2013 If it costs nothing and can eliminate the need to 'guess' its probably worth an hour of time to do it Even if you do pay for it. You are going into a long term commitment that is going to cost you a -small- fortune over the next 25 years. Get some advice from an expert, not a bunch of blokes/esses on the internet! 1
RTFM Posted June 17, 2013 Posted June 17, 2013 Even if you do pay for it. You are going into a long term commitment that is going to cost you a -small- fortune over the next 25 years. Get some advice from an expert, not a bunch of blokes/esses on the internet! ^ What he said 1
pcstru Posted June 17, 2013 Posted June 17, 2013 I wouldn't personally be 'guessing' how much i could borrow and how much that would cost a month when you can go get a free no obligation figure from a mortgage advisor Well, I don't mean just pluck a figure out of the air, but you should be able to the in the ballpark as to the kind of property you can look at or make an offer on. My point is more on the nature of offers and acceptances (it's all very loose this side of Gretna) than that you should rely on any guesswork for any length of time. As I had said, most of them will do a free no obligation first meeting to discuss your case and give you some base figures (they do around me anyway as i've sat with a couple and done it). If it costs nothing and can eliminate the need to 'guess' its probably worth an hour of time to do it If you phone and speak to them and they say they'll charge you, find another........ I can't recommend strongly enough that people research to the point where they operate with confidence in their own judgement on these things. My experience of IFA's is that they have often acted to obscure their earnings from commission and have been partisan in the products they recommend because of that commission. Most recently advice given by a long time IFA to my wife has been revealed as little more than a way of lining the IFA's own pockets and has probably cost her tens of thousands in past and future returns. The last two times I've bought a house I've sought advice from IFA's in addition to doing my own research. IME their advice has been generally poor and the products they have put forward have been motivated not by what is best for me but by the commission it has bought them. 1
Andrew_C Posted June 17, 2013 Posted June 17, 2013 I can't recommend strongly enough that people research to the point where they operate with confidence in their own judgement on these things. I take it that the OP is a first time buyer. In that position, it is very unlikely that he would be in a position to deal effectively with the mass of information you need to understand to get the best, not necessarily the cheapest, deal. (He might be a financial wizz, but then he wouldn't have asked the question) There is nothing wrong with doing research yourself as well. IFAs are now required to tell you upfront how they will be paid for their service. Be it commission or you put your hand in your pocket. 1
Tallwood_6 Posted June 17, 2013 Posted June 17, 2013 IFAs are now required to tell you upfront how they will be paid for their service. Be it commission or you put your hand in your pocket. Indeed the IFA was looking at over £500 for my life insurance policy alone when i looked at the "key facts" sheet you get with everything now. 1
Tallwood_6 Posted June 17, 2013 Posted June 17, 2013 (edited) That's very possible, but unfortunately if you put down less the available mortgages to you at a reasonable percentage are limited. It makes the difference in you getting a mortgage at 3% vs 6% for example. The more you borrow, the higher risk you are unfortunately. People on very low incomes could be forced to take mortgages up to their 70th Birthday, but personally I don't know any 20 year olds with a 50 year mortgage! Sounds scary! We did 15% an i think our interest rate is around 3.7% fixed dropping to about 3.1% if you can do 20% but the real drops seem to be once you have 25% loan to value. HSBC seemed to do some reasonable interest rates for first time buyers on 2 year fixed rate mortgages when we looked at couple of months ago. Edited June 17, 2013 by Tallwood_6 2
featured_spectre Posted June 17, 2013 Posted June 17, 2013 My new neighbours put 35% down on their house, they have an interest rate of 1.9% guaranteed for the life of the mortgage. 2
mac_shinobi Posted June 17, 2013 Posted June 17, 2013 My new neighbours put 35% down on their house, they have an interest rate of 1.9% guaranteed for the life of the mortgage. In about a year or two's time we will be looking at buying a house ( will either be 10 or 15% ) can't afford much more than that. No doubt will be over a 30 year period 1
zag Posted June 17, 2013 Posted June 17, 2013 I've been overpaying my mortgage since the start, adding as much as I could afford over the years. It was a 25 year mortgage and I should have it paid off in 7 years. Compound interest is an amazing thing 1
mac_shinobi Posted June 17, 2013 Posted June 17, 2013 I've been overpaying my mortgage since the start, adding as much as I could afford over the years. It was a 25 year mortgage and I should have it paid off in 7 years. Compound interest is an amazing thing Compound interest ? Over paying on each of your monthly payments or some it ? 1
zag Posted June 17, 2013 Posted June 17, 2013 Compound interest ? Over paying on each of your monthly payments or some it ? Yeh I overpay £700 a month on my mortgage each month. I have a lodger so I just use their rent and a bit of my disposable income for the overpayments. Managed to Knock 18 years off the payback period! Amazing!! 2
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