Bob Posted June 22, 2006 Share Posted June 22, 2006 I'd say go for it mate, but check how long you are tied to the mortagage for (i.e. if there's a minimum term contract type thing). You can always remortgage later to a 25 year when money improves or the house value goes up significantly. Link to comment Share on other sites More sharing options...
ivan Posted June 22, 2006 Share Posted June 22, 2006 Get a capped rate repayment mortgage. Usually capped for about 3 years at a certain rate, you know you're never going to pay over that. At the end of the 3 years you can transfer to another capped rate. I did this with the Halifax. Most mortgage companies will try to sell an interest only mortgage because they're the industry favourite. They're the ones that can land you in real deep shit and personally I wouldn't go near one. They tend to be for greedy or impatient borrowers... Link to comment Share on other sites More sharing options...
outatime Posted June 22, 2006 Share Posted June 22, 2006 Most mortgage companies will try to sell an interest only mortgage because they're the industry favourite. They're the ones that can land you in real deep shit and personally I wouldn't go near one. They tend to be for greedy or impatient borrowers... I would only go for an interest free mortgage if I had a low loan to value percentage, as there is obviously less chance of negative equity that way. I'd go for the 40 year mortgage, you should be remortgaging every 3-5 years so you can just bring the term down each time. Link to comment Share on other sites More sharing options...
Digsy Posted June 22, 2006 Share Posted June 22, 2006 I got bitten on the arse by an interest only / investment mortgage and now I wouldn't touch one with a bargepole. After 6 years I had an investment worth less than I had paid into it and average annual growth about half what was required to pay the mortgage off. I started again with another 25 year repayment job. Mortgage advisers tell you that you don't pay anything off in the first few years. Bollocks. After only three years I've paid 6% off without making any overpayments. I got a shock last night, though. The "three year" fixed rate I got back in November 2003 expires in August Looks like I'm in the market for a mortgage again myself. 2 or 3 year fixed rate with no tie ins is what I'm after. What are the early repayment penalties like on a 40 year deal? Link to comment Share on other sites More sharing options...
Supragal Posted June 22, 2006 Share Posted June 22, 2006 yes do it- and if you can make over payments then you'll clear it faster anyway. good work! Link to comment Share on other sites More sharing options...
Alex Posted June 22, 2006 Share Posted June 22, 2006 I've gone for a 2yr fixed term on a 35yr mortgage...in 2 years I'll remortgage (assuming the rate beat the 6% I'll go up to) and go for another 2-5years discounted fixed term...but this time for 30 years, cause in 2 years time I hope I'll be earning more so I can afford to pay off more a month. Each time you remortgage I'll up the amount I'm paying and reduce the period...till it's all gone But whatever you do do, don't over stretch too far, you need to live as well! PS I've paid 160 for my place and put down a similar deposit to yours. Link to comment Share on other sites More sharing options...
MrHanky Posted June 22, 2006 Share Posted June 22, 2006 I've gone for a 2yr fixed term on a 35yr mortgage...in 2 years I'll remortgage (assuming the rate beat the 6% I'll go up to) and go for another 2-5years discounted fixed term...but this time for 30 years, cause in 2 years time I hope I'll be earning more so I can afford to pay off more a month. Each time you remortgage I'll up the amount I'm paying and reduce the period...till it's all gone But whatever you do do, don't over stretch too far, you need to live as well! PS I've paid 160 for my place and put down a similar deposit to yours. I would go for something like this as well to be honest. Just to get you started. The worse thing you can do is try and over stretch yourself on monthly payments by going for say a 25 year deal. I would also stay clear of investment only deals but thats just my opinion. Also like Alex says in a few years time when its remortgage time, if you are better off you can always knock a few years of your mortgage. Good luck whatever you do. Mark Link to comment Share on other sites More sharing options...
Digsy Posted June 22, 2006 Share Posted June 22, 2006 Slight What does it take to qualify as a "new customer" for a mortgage? Can you leave a lender and then come back again after 2 years or something? Does it have to be for a new property? Link to comment Share on other sites More sharing options...
Alex Posted June 22, 2006 Share Posted June 22, 2006 In my mind if you have no existing account with a lender you are new business. Link to comment Share on other sites More sharing options...
SupraAyf Posted June 22, 2006 Share Posted June 22, 2006 Hi Charlie, this is the biggest decision of your life so its not one to take lightly. The guys have covered just about all of the options and then some. It's OK to say that house prices are going up by comparison to market trends over the last few years but that is not necessarily the case. Every house will increase in value from only a few pounds a year to big %'s of its original value but there is more to taking on a house than just the mortgage (and I don't just mean the electric and council tax bills either mate!!). I'm referring to the value of your home; its current condition; its location and its future 'investment' potential (i.e. what you'll get when you sell it in a few years time). The biggest thing about any house is that 'you can change the house but you can't change its location' so you really need to consider an area which is desirable to others (we all know the areas that are crap and drossy right!!. Newer properties are best as long as they are in the right area and you should think to hold on to a new house for at least 2 years - you also get the 2-year home insurance package and the 10-year NHBC cover which is worth a great deal to people when they want to buy a home (house with a warranty eh!). On top of your deposit, you will also get new-home perks by the builders (i.e. first 12 months mortgage paid or carpets, electric stuff and curtains or deposit paid or just money off the original value. It really is worth considering). Your 40-year mortgage is a long time to commit yourself too but as mentioned above, if you purchase the right house in the right area then you WILL make money after 24 months. Do not be fooled by people that tell you that every house goes up massively in value as it's bollocks!!!!!!!!!!!!!! If you get a poor house in a good area then you can always do it up and make a big profit margin (has potential anyway) You then have a bigger deposit in 24 months for your next mortgage. Many people stay with the same mortgage people for years and in a number of cases, they are just bloody fools. You should at least be considering all of the different mortgages every 24 months as they want your business to there are massive deals to be had. There is also the fact that the mortgage levels are index linked against the Bank of England's interest rates so you can never predict what will be going on in the financial market in years to come. have a look at this web site: http://www.rightmove.co.uk Stick your postcode in the search box (or the postcode where you wish to live), and do some research on the areas first. This is the only way that you'll find the right house that will go up in value - you never know, you may find a better example(and more affordable) to the 3-bed you're looking at. Finally, check out the builders in the area to see what offers they have up their sleeves. Regards buddy and best of luck, Andrew:idea: just sold my flat and i have a 20k deposit yah! .... (not bad for 2 years ownership) (instead of spending it on the car ... lol) Charlie Link to comment Share on other sites More sharing options...
penguin Posted June 22, 2006 Share Posted June 22, 2006 hmm - i would say if its a property your buying to live in yourself - repayment mortgage!! ... but having said that - only choose "interest only" if your making an investment in property your looking to let out - leaving you with a nice tidy amount every month - and hopefully a high profit when you sell up and go elsewhere .... then again - having a repayment mortage means someone else can pay for your house Link to comment Share on other sites More sharing options...
Recommended Posts
Please sign in to comment
You will be able to leave a comment after signing in
Sign In Now