Right, need a mortgage.. how do I go about this? (Help!)

[ChrisFilter]

People giving advice, quite often have their own motives...

Anyways, check out www.propertysnake.co.uk.

I would hope that parents, relatives and friends wouldn't have their own motives!

Right, fixed rate is madness huh.. ok, noted. Doesn't that lead to uncertainty though? What if the interest rates go up loads?

 

[ChrisFilter]

London is worse imo, the biggest gains have been here so the biggest losses will be as well.

Not always true, demand in London will always be high, always, always, always, so prices won't slump as low as in other areas.

 

[g force]

Fixed rate is fine....just not over such a massive period. You'll lose any savings if rates go down...and they coudl well be 1.25% lower than that rate. If you want certainty though go for it - it's all about what suits your personal financial situation and whether you're happy to know for 5 years what yr paying, while also realising you might be paying back more money than you'd need to be

 

[ChrisFilter]

True that the really overpriced stuff is the stuff that will fall furthest...the XLA stuff on at silly prices with high ground rents will prolly feel the biggest effect.

As Zenie so subtely points out, this is where we're looking, but I don't think it falls in to the category of being sillily priced.

It's 3 bedroom, large rooms, ground floor, on the very edge of the estate surrounded by loads of trees and stuff. 5 mins from Crystal Palace, near to two overland stations so 15 mins to Victoria, 20 to London Bridge and 18 mins to Blackfriars. £190k for that doesn't seem overpriced to me.

I'd much rather that than £225k for a Victorian conversion with 2 bedrooms, smaller rooms and no storage space.

 

[ChrisFilter]

Fixed rate is fine....just not over such a massive period. You'll lose any savings if rates go down...and they coudl well be 1.25% lower than that rate. If you want certainty though go for it - it's all about what suits your personal financial situation and whether you're happy to know for 5 years what yr paying, while also realising you might be paying back more money than you'd need to be

So fixed rate for 2 years? If base rates are due to down this year, wouldn't even 2 years be a bit foolish?

I just like the security of knowing how much I'm going to have to fork out each month.

 

[sleaterkinney]

Not always true, demand in London will always be high, always, always, always, so prices won't slump as low as in other areas.

Have you seen all those new tower block developments going up around the place, there is over supply here.

 

[ChrisFilter]

Have you seen all those new tower block developments going up around the place, there is over supply here.

Only at a certain level.. affordable housing in London will never be in a state of over supply... unless I'm totally mistaken.

 

[Kid_Eternity]

As Zenie so subtely points out, this is where we're looking, but I don't think it falls in to the category of being sillily priced.

It's 3 bedroom, large rooms, ground floor, on the very edge of the estate surrounded by loads of trees and stuff. 5 mins from Crystal Palace, near to two overland stations so 15 mins to Victoria, 20 to London Bridge and 18 mins to Blackfriars. £190k for that doesn't seem overpriced to me.

I'd much rather that than £225k for a Victorian conversion with 2 bedrooms, smaller rooms and no storage space.

Depending on the leve of crime locally that looks like a very good deal to me.

 

[FunkyUK]

I saw a broker (Charcol) a few months ago, they seemed more interested in bundling in life insurance than giving me mortgage advice. In the end I sourced by own mortgage by comparing at the FSA's website. http://www.fsa.gov.uk/tables

HTH

 

[zenie]

As Zenie so subtely points out, this is where we're looking, but I don't think it falls in to the category of being sillily priced.

It's 3 bedroom, large rooms, ground floor, on the very edge of the estate surrounded by loads of trees and stuff. 5 mins from Crystal Palace, near to two overland stations so 15 mins to Victoria, 20 to London Bridge and 18 mins to Blackfriars. £190k for that doesn't seem overpriced to me.

I'd much rather that than £225k for a Victorian conversion with 2 bedrooms, smaller rooms and no storage space.

If you can get it for 190k and it's in good nick then I think you've got a good price. (worth bearing in mind how much your ground rent and any maintenance is on the block though.)

I was gonna say why not go a bit smaller and get a house for your money but a study and a spare room will be useful to you and your lady

No-one really knows what'll happen to the economy/housing market but I think you're in a good position to buy and it beats throwing money down the drain by renting.

 

[Xanadu]

I would hope that parents, relatives and friends wouldn't have their own motives!

Right, fixed rate is madness huh.. ok, noted. Doesn't that lead to uncertainty though? What if the interest rates go up loads?

Possibly, but the people they listen to may have.

 

[beeboo]

So fixed rate for 2 years? If base rates are due to down this year, wouldn't even 2 years be a bit foolish?

I just like the security of knowing how much I'm going to have to fork out each month.

For some people the security is the highest priority, fair enough. However, I'd say that over the next 12 months, base rate cuts are almost guaranteed so it doesn't feel like the right time to be getting on a fixed rate. Remember that you pay a hefty arrangement fee for fixed rates, so you've got to add that to any potential savings vs. a variable.

I've been on two 2-year fixed rates - first time we timed it all wrong in panicking at rate rises and jumping on a fix at what turned out to be a peak.

This time we've got it absolutely spot-on and have been paying under the base rate for the last 18 months and expect the fix to end just as the rates are coming down.

When you're on a variable you do have to keep on your toes - generally banks don't change their rates until a few days after a base rate change, and sometimes you've just got to be ready to seize a deal if the rates suddenly go up. Whereas on a fix you know that it is never going to be cost effective to pay the penalties for getting out early, so regardless of whether you're paying over the odds, you just live with it.

As I said above, there is little to lose from getting on a variable rate in the short term, then once you're settled in your new pad taking a more leisurely evaluation of the market. If you switch to a fixed rate with the same bank/BS you've got your variable with, it's a simple case of a phone call and paying the arrangement fee, so it's worth choosing one which generally has good deals (I still tip Nationwide for this). It's a bit more hassle to change bank/BS, but not excessive.

 

[FabricLiveBaby!]

if the property is in the greenbelt, i can't see prices falling that low.
houses here will always be in demand.

i think it's crazy if you're gonna pay the full asking price.
the market has allowed buyers to be a tad more cheeky.

There are never any safe areas with a falling asset class.

Everyone I speak to seems to say "well properties are coming down but no in MY area".

That'd mean most areas are safe.

From 1989 ALL areas saw reductions. Dont think it's going to be much different this time round, infact the biggest drops were in london because that is where the biggest gains were made. Which is why despite building up a large deposit with my boyfriend and were going to buy this eyar we have chickened out the market. On the basis that it is MY hard earned money.

The banks are not lending as much as they ahve been and for this reason alone prices will have to drop. Buy to letters "in it for the long term(!!!)" get spooked and panic sell, perpetuating a downward spiral.

what kind of fool buys in a falling market. The same psycology applies on the way up, as well as on the way down.

Even if the market only frops 30k that's probably 60k that I would be paying back for nothing.

Back to renting for me. (after living with parents for a year)

 

[Xanadu]

Back to renting for me. (after living with parents for a year)

I'm doing the same. This time I'll have some bargaining power over the amount of rent.

 

[corporate whore]

Chris, I used this lot http://www.lcplc.co.uk/ & recommend them highly.

All online/phone dealings and they'll get in touch when yer initial fixed-term thing is up to rearrange anew. All fee-free and whatnot.

Cheers

 

[ChrisFilter]

what kind of fool buys in a falling market. The same psycology applies on the way up, as well as on the way down.

Even if the market only frops 30k that's probably 60k that I would be paying back for nothing.

Back to renting for me. (after living with parents for a year)

The kind of fool who'll happily live in a property though highs and lows. If I wait another couple of years that'll be £24,000 lost in rent, just gone. I'd rather put that £24,000 into paying off a mortgage.

Perhaps I am a fool, but I can't see the property we're interested in falling to £166k ever. 10 years down the line that'll be £240k paid off the mortgage, if we don't move during that time, we'll lose nothing.

I'm buying a place to live, not an investment, and don't plan on pulling out in the next 5 years at least.

 

[CharlieAddict]

From 1989 ALL areas saw reductions. Dont think it's going to be much different this time round, infact the biggest drops were in london because that is where the biggest gains were made.

the lead up to the current slow-down is completely different to the events of 1989.

we'll see...but i wouldn't hold your breath on london prices dropping.

don't get me wrong, i'm hoping to upgrade to a proper 3 bed period house in zone 2 or 3 - currently at the £375-£450K mark.

it's just i know this market won't drop much...if it dropped 10% i'd be extremely happy.

i thought you're living with your dad, on a low rent right?

think of those that have to pay £1000 pcm?
and never had a property. cos you won't see the full effect of this slowdown for 3 or 4 years....

 

[FabricLiveBaby!]

The kind of fool who'll happily live in a property though highs and lows. If I wait another couple of years that'll be £24,000 lost in rent, just gone. I'd rather put that £24,000 into paying off a mortgage

Oh I wans't refering to you as the fool, jsut the psycology behind the market. obviously there will be people that buy in a falling moment but most people will be put off because they don't want to loose money IYSWIM.

To be honest, Intrest paid on a Mortgage is dead money and Renting is dead money.


At the moment the intrest on the mortgage seems to be more than renting the same place.

 

[g force]

Yep it's not as if, even if prices go down rents will suddenly plummet. They're likely to stay the same. I'm much happier paying £900 a month for my flat than the same in rent as I was.

Chris - that does seem like a good deal indeed.

 

[zoltan]

So fixed rate for 2 years? If base rates are due to down this year, wouldn't even 2 years be a bit foolish?

I just like the security of knowing how much I'm going to have to fork out each month.

better to pay slightly more and be able to budget for the enxt 2 years than leave yersel open to huge rises that may cause problems ?

unless you have tons of cash, then would opt for the fixed so at least you know where you are going to be financially - 2 years isnt that long in the big scheme of things - and buying a house/ flat can have masive unforseen consequences - like a boiler blowing up = £1500

make sure overpayments are allowed, just in case things go well - this makes a big difference to your long term numbers iof you get the chance

sup to you of course

 

[ChrisFilter]

Chris, I used this lot http://www.lcplc.co.uk/ & recommend them highly.

All online/phone dealings and they'll get in touch when yer initial fixed-term thing is up to rearrange anew. All fee-free and whatnot.

Cheers

The very people I've been speaking to this morning

 

[ChrisFilter]

better to pay slightly more and be able to budget for the enxt 2 years than leave yersel open to huge rises that may cause problems ?

unless you have tons of cash, then would opt for the fixed so at least you know where you are going to be financially - 2 years isnt that long in the big scheme of things - and buying a house/ flat can have masive unforseen consequences - like a boiler blowing up = £1500

make sure overpayments are allowed, just in case things go well - this makes a big difference to your long term numbers iof you get the chance

sup to you of course

Yeah, the broker is insuring we can overpay by up to 10% a year

I think 2yr fixed rate seems to be the way forward for us. I'd prefer the security, even knowing I might save a bit of cash with a standard variable.

 

[ChrisFilter]

Oh I wans't refering to you as the fool, jsut the psycology behind the market. obviously there will be people that buy in a falling moment but most people will be put off because they don't want to loose money IYSWIM.

To be honest, Intrest paid on a Mortgage is dead money and Renting is dead money.


At the moment the intrest on the mortgage seems to be more than renting the same place.

The rent on the property we're looking at would be about a grand a month as will the mortgage.

 

[beeboo]

better to pay slightly more and be able to budget for the enxt 2 years than leave yersel open to huge rises that may cause problems ?

But it's not an either/or situation - you're not stuck on a variable rate, you can move on to a fixed rate whenever it suits you.

However, once you're on a fixed rate, that is it for 2 years. Interest rates could fall 2% and you're stuck paying over the odds.

It's rare for the interest rates to change by anything more than a quarter point at a time, and as I said above, if you're quick you can get the same deals after a rate change as before.

IMO the trick is to ride out the the dips in interest rate on a variable, and avoid the peaks on a fixed.

I think 2yr fixed rate seems to be the way forward for us. I'd prefer the security, even knowing I might save a bit of cash with a standard variable.

Honestly, I think that is the worst possible thing to do. Go for the security when there is more uncertainty. At the moment it is very unlikely there will be any rate rises this year.

 

[ChrisFilter]

Honestly, I think that is the worst possible thing to do. Go for the security when there is more uncertainty. At the moment it is very unlikely there will be any rate rises this year.

Ok, you seem convinced, as did my Dad who's bought about 20 places in his life.

I'll blame you if interest rates spiral out of control and my home is repossessed

 

[beeboo]

I've lost the link now, but I just read some kind of market analysis which said that demand for 2-3 year fixed rates had dropped off with people opting for trackers mortgages instead. So it's not just me and your dad

 

[ChrisFilter]

Trackers seem to be the way forward.. they all seem to have tie-ins for 2 years though.. that doesn't sound good?

 

[ChrisFilter]

Found one!

Thoughts on this, anyone?

Product provider:


Norwich & Peterborough Building Society

Telephone:


08453002522

Website:


www.npbs.co.uk

Address:


Lynch Wood Business Park
Peterborough
Cambs
PE2 6WZ

Local branch:


Yes


Monthly payment details:

This table shows the estimated monthly cost for this mortgage, based on the details you have entered.

Interest rate


Rate type


Until/for


Minimum rate


Monthly payment

5.89%


Tracker


term


3.00%


£947


Product details:

This is a tracker mortgage. It tracks the Bank of England base rate (sometimes called the official rate).

Rate type:


Tracker

Tie-in period:


none

Higher lending charge:


none

Valuation fee:


£250

Set-up fees:


£599

25 year APR:


6.10%

Cashback:


none

Incentives:


No

Available from:


D, S, M, WOM, B

Restricted availability:


No

Flexible features:


Yes, details below

Linked current or savings a/c:


No

Conditional insurance:


No

CAT standard:


No

Self-certification:


No

Interest calculation period:


Daily


Other details:

Flexible features:


Daily/monthly interest calculation
Overpayments
Payment holidays
Underpayments

Overpayments: Unlimited overpayments allowed without penalty.

 

[zenie]

Perhaps I am a fool, but I can't see the property we're interested in falling to £166k ever. 10 years down the line that'll be £240k paid off the mortgage, if we don't move during that time, we'll lose nothing.

Don't be so sure of that! But you're buying a place to live not to earn off

The Norwich and Peterborough mortgage - are you sure it's valid on your postcode?

 

[ChrisFilter]

The Norwich and Peterborough mortgage - are you sure it's valid on your postcode?

Fucks knows

When I actually went their website the rates were completely different anyway.

The Woolwich / Barclays lifetime tracker is always 0.45% above BoE base rate, so at the moment it's 5.95%...

How low do people think interest rates will go to in the next couple of years?