Andy_R

iTrader: (3)

Financialy 100% mortgages can and do work well. Ok idealy everyone would have a deposit when buying thier first property, in reality it doesnt always happen that way.

Man1 decides to save for a deposit. He saves for a 2-3years then thinks about buying. House prices rise over the period whilst he's been saving & his deposit in % terms is lower than anticipated.

man2 buys using a 100% Mortgage and gets on the property ladder right away. His interest rate is slightly higher than it would be if he had a deposit he also has a HLTV charge which is added to the mortgage.

I figure that man2 would be better off in 2-3years if he doesnt accept a mortgage deal that ties him in for more than a 2-3years.
He then remortgages.
The effect of his house increasing in value over the 2-3years more than equaling man1's deposit + he's saved paying rent/digs whatever.

turbo_3dr_tommy

20k deposit on 114k house on 75 % intrest only, 25 % repayment works out at £460 a month fixed for 3 years with northern rock

hopefully by the time the 3 yrs my lass will be back to work by then after having our baby, then the big payments start

MWF

A lot are done on scoring your income vs outgoings.

The salary multiplier, higher lending chargers and the need for a deposit have been phasing out for a while.

100% mortgage is easy to get now if you, or your partner, has a degree.

However if you have debts/lots of outgoings or a poor credit rating you are stuffed.

I got a 100% mortgage for £137,000 last year on a five year fixed rate (I can't remember the rate) with the option to overpay. I had no savings, a couple of loans and credit cards, a mediocre combined income.

With the way the housing market is going trying to establish savings may be pretty pointless because you'd see better return on the property and while saving watch prices go up fast than you can save, not to mention the base rate. I personally doubt anything is going to change, prices will continue to rise with demand.

radiant red

Skipton are doing very good deals at the mo

RWD_cossie_wil

iTrader: (9)

MWF, did you cover your loans using your mortgage so you only had 1 big bill?

Porkie

iTrader: (1)

Not read post Alex but can't believe someone as sensible as you is driving around in lovely cars and is not on the property ladder....

Wazzzer

Me and the missus put £6k down on a £120k property so 5%

saff_cossie

We put 20% down which is the barrier to avoid mortgage insurance here. As others have said, we had to sell the cars too but once you have a mortgage and are in a regular routine, you know your outgoings so can indulge if you want again.

I sold the cossie and the Lexus to get the place and then bought the Evo once we had the place.

Definately keep some money behind you because if one month you need something doing on your daily driver and you are already close to the wire with payments/bills etc, it will bite you hard.

As you can see from others on here, it is fairly straight forward to find future deposits from appreciated capital but its the first one thats the killer.

Good luck and a great relief once you sit back with that beer in your own pad.

AlexF

Thanks for all your replies guys - its really good to get peoples opinions who have actually been through this!


Its also useful to know that it is this 1st step thats the hardest. I was originally planning to choose a house that suited me perfectly and avoid moving for ages - but it seems better to build up to that point over a period of time.


Porkie,

You've made one major assumption -

I'm not sensible with money at all. Basically it all went wrong at Uni and then again when I was living in Essex ( I got taken to the cleaners in a rented house by a so-called mate).

But in all fairness the only nice car I have is the MINI and the amount I own on that car is not a problem. I can sell it and have my deposit back Unheard of with a brand new car.

Wazzzer

Getting on the ladder is the hardest part mate, you might have to cut down on expenditure for the first 2 years or so but once you've proved yourself to the mortgage companies most will welcome you with open arms and you can get better deals

Charlie Chalk

iTrader: (1)

I want to know this too...

bud-weis

You can get a mortgage to cover all other outstanding finance for cars or loans etc if you like, i doubt a bank would do it, but a broker could probably sort it for you.

smartrs

we had a 100% mortgage on £140000 house , that money paid back the 80000 bridging loan we had to buy the house and to do all assoated buildings works done leaving us with £15000 for doing up the insides of the house. the house was valued 3 month ago at £160000 as it is without even spending the £15000 at all now planning a extention for it to push the proptery price even higher . only problem is my missus has fallen in love with it and does not want to sell it .

RWD_cossie_wil

iTrader: (9)

anyone know of any good brokers ? West mids area if poss

bud-weis

A&M Partnerships (The Mortgage Room) in Redditch - 01527 67979

MWF

No mate that would have been a bit foolish I think, would have been compounding the interest over many years by adding any more debt than needed. What I did was work at getting my outgoings down as much as poss. So where I had a couple of cards at high rates I transferred the balance to interest free deals, also cut out direct debits like a contract phone. I also checked out my credit rating before.

I think the vague ruling for how much they'll let you borrow is something like this:

The simply take your (combined) income, deduct the monthly outgoings and limit your repayment amount to 60% of the remainder.

So for example if you and a partner took home £2000 combined but had regular outgoings totalling £500 they would offer mortgage payments up 60% of the remainder, so £900pm.

I believe some still work on salary multipliers and such but this is proving a pretty basic and outdated way of measuring peoples affluence. It worked back in the day when people saved money but these days first time buyers not only lack savings but also have debts and outgoings to consider too. Hence why some people earning big salaries can't get mortgages, they are simply pissing too much of their income away.

MikeR

I am looking forward to getting on the ladder this year all being well, we are saving like hell to get a decent deposit down but we also both have pretty good jobs so will see what comes up,

Mike

Tonks

I used http://www.williamlowden.com/ to sort my mortage.

My pad was 142k, put 20k down and they got me 4.8% fixed for 3 years on intrest only for £490 a month. Gutted i didnt fix it for longer now as the rate was good. This was in Aug/Sept of last year. Plan to rent it out asap and get another place as it the safest place to make money today i think.

jamie