Mortgage Advice.

[TheSmiler]

Hi there, just wondering if anyone on here can give me any advice. Basically I'm considering getting a mortgage next year and moving over to Newport in Wales. Where I'd be looking at about 90-130k; bottom estimate being a 2 bed flat with garage top estimate looking at a semi detached house with a garden big enough for a garage (most probably needs a bit of work but liveable).

In my current job I'm earning a stable 25k a year more with overtime which is always available. Now I've worked out within 10-12 months doing overtime I can save up about 10-14k for the deposit. This would be my first house so obviously first time mortgage.

Now I'm considering looking at a house and renting out a room to pay for bills and then use wage to pay off the mortgage earlier if that is possible

I was just wondering if anyone on here can give me any idea if this would be feasible or realistic; I've got no commitments and the only main bill (apart from household bills that don't come into it) is a mobile phone contract which could be cancelled early with a big fee.

Example of two properties .

2 Bed Flat with garage

House


Hope someone can help.

Cheers,
Sam.
____________________
CB125>CG125>GN125>ER5>K100RS>R1100RS>K100RS
A2 completed 23/07/15 Ready for the Golden Crisp Packet

[UnknownStuntm...]

https://www.nationwide.co.uk/products/mortgages/our-mortgages/mortgage-calculators/mortgage-affordability-calculator

(Don't necessarily have one from them, but the calculator will give you an idea of what you can have)

But do this NOW:
https://www.moneysavingexpert.com/savings/help-to-buy-ISA

[dodsi]

Ever had a credit card? if not, get one.

Use it only for some normal purchases and pay it off each month. it is important to have a credit rating - using credit is the only way to obtain a credit rating.

This is an important step - it may sound counter-intuitive but its a good idea.

Ensure you have plenty of savings to cover legal, moving and stamp duty (if payable) costs.

Ensure you have an agreement in principal from your mortgage provider before hitting up estate agents etc (it's the only way you will be taken seriously).

Use a mortgage broker - these guys have ways of making sure that things go through mortgage wise.. banks can randomly decide they don't want to lend... brokers only put you forward for mortgages that they think you will get accepted with.

I would buy a house that may be out of date decor etc wise but livable over a place that actually needs work. Home improvements are expensive and on one salary will often be unaffordable for a long time. When something absolutely /has/ to be done this is when you can get in trouble. I am not talking about a new bathroom suite that is more contemporary because your 70's avacado suite offends your sense of style. I mean leaking roof causing lots of extra untold damage. Tins of paint and rollers are cheap if that's your thing and are happy with the level of finish you can put on a place to 'redecorate'

Having a room rented out will really help you but don't budget that additional income in and certainly don't tell anybody about it during the application process. Just do it when the time is right to ease the pressure a bit.

mostly, it's a stressful process... all this goes away once you complete and you have your new home.

[stinkwheel]

You can rent a room out for up to £7500 per year tax free.

https://www.gov.uk/rent-room-in-your-home/becoming-a-resident-landlord

As said, don't budget for this. Get a mortgage that is well within your current means, interest rates are at an all time low just now, they can't really go any lower.

Big deposits = prime lending = best deals.

FWIW, I don't like the look of the flat-topped dormer windows on that house. They look like trouble to me.

If you're buying in an estate, have a look along the row and see what other similar ones have had replaced/repaired. Also check the local council planning to see what building warrants/planning have been issued for modifications/repairs to nearby houses and have a quick peak at the geographic crime stats.
____________________
“Rule one: Always stick around for one more drink. That's when things happen. That's when you find out everything you want to know.”
I did the 2010 Round Britain Rally on my 350 Bullet. 89 landmarks, 3 months, 9,500 miles.

[pits]

First one is an old peoples complex at the top end Newport.

Second one your bike will be gone and burnt out quicker than a crisp packet.

There's a reason they're cheap, research your area well
____________________
Stinkwheel: You have no right to free speech
00:32:08 Blau Zedong: yes, i am a massive CB400 fan and collector
00:33:00 Blau Zedong: the CB400 is my favourite road bike

[MarJay]

Banks will only loan you 4x your annual salary, so you'd better hope you can find a non-sh*thole for £114k.
____________________
British beauty: Triumph Street Triple R; Loony stroker: KR1S; Track fun: GSXR750 L1; Commuter Missile: GSX-S1000F; Cheap project: CBR900RR FireBlade
Remember kids, bikes aren't like lego. You can't easily take a part from one bike and then fit it to another.

[petalbriefs]

Also consider some of the government schemes like we discussed Sam.
My plan is the part rent, part buy scheme next year.

You can buy shares and have a much more affordable mortgage and buy more as you go along and, as you're "buying" from a housing association, you have almost a guaranteed buyer when you come to sell.

I intend to do it this way as I am buying on my own and you can get a bit more for your money to start with.

Worth looking into anyway
____________________
Proud owner of an R6 + ZXR400
Honda CBR 125 R - Stolen

[M.C]

[TheSmiler]

Cheers for the replies I'm on my phone so can't really quote at the moment. Well I can but it's majorly awkward. I've applied for a credit card and should be getting it next week I got accepted.

This was just wondering if it was feasible I've tried several calculators and some say that with a bit extra 14k deposit I could get 120k mortgage. I don't mind paying 6-700 on mortgage if it gets me what I'm after.

Regarding the areas pits I know I've got to look into the area more I don't really know newport at all. Or the surrounding areas for that matter. Anywhere you would recommend possibly looking ato?

I don't mind going somewhere quiet with old people. Doesn't bother me that much. I know I can't get the best possible area but owning in the long term has got to be better than renting. Even with a not too good area.
____________________
CB125>CG125>GN125>ER5>K100RS>R1100RS>K100RS
A2 completed 23/07/15 Ready for the Golden Crisp Packet

[J4mes]

I wouldn't advise getting in to these part rent/part buy schemes myself. My wife had one when we met. The house was overpriced to start, the rental portion kept going up to the point where it wasn't any cheaper than buying the other portion and mortgaging the lot, as it was new-estate based (as all these things are) she had to pay a community charge and a ground charge for the parking areas.

We were restricted on who we could sell it to as it had to be offered on the market for X amount of weeks (26 I think) for people on lower incomes to have a chance first, and when we finally did sell we got charged a fair amount more by the solicitor as they had to send paperwork to the housing association and the buyers.

There was no letting or subletting allowed either, with regular snooping by the housing association reps.

We got shot of that place as soon as we could.

[dodsi]

Shared ownership must be avoided, it's a total con really. Infact the whole new build thing is best avoided.

To be honest, worry about it in steps.

Step 1, saving and credit rating.

Concentrate your attention on this.

Once you actually have money behind you. Begin to worry about the next thing. Mortgage.

[Kickstart]

[Derivative]

I would add another 5-10K on top of the mortgage for contingencies and as savings in the event of you losing your job.

If not beforehand, then plan to get it together not long after. You don't want to have to sell the house immediately and lose the deposit if you get into trouble.

[Fowlersrs]

Don't forget banks will also now assess your credibility Alot more. Speak to a mortgage broker would be my advice, trying seeing an adviser at a bank, they'll be honest with u

[GSTEEL32]

Also remember as a First Time Buyer, you'll be bummed to oblivion on your "introductory" APR. Ensure you lock this in for the minimum time only, say 2 years, after which you'll be paying a much lower interest rate.

On the subject on interest rates, be clear...

They're going nowhere. Not this year. Not next. Not for 3 years at least. Yes, you'll get a quarter here, or a half there, but not the 12 - 15% level of the 80's.

Until oil rises and the US, Europe, the UK, Japan and China get their economies in gear, at the same time, interest rates are going nowhere. Also remember that commodities, in all forms, are on their ar$e at the moment, which is a true barometer of the worlds future financial "expectations". That'll take at least 5 years at least to ramp up, incidentally. Its cyclical.

As such, get your 2 year FTB mortgage out of the way, then re-negotiate your APR over the next 2,3 or 4 years.

Deposit is key in your situation. 10% minimum. If you haven't got that, you're not going anywhere.

[chrisdubya]

[Motorhate]

Don't buy a flat, buy a house with a freehold. Flats almost always have a lease which will require regular ground rent and maintenance payments. You'll need to factor in at least 80 sheets into your monthly budget. You'll never truly own the property as the freeholder you pay ground rent to will have the final say on any major changes you want to make. They'll usually employ an agency to collect the ground rent who will try and stitch you up at every turn. Then at some point you'll need to renew the lease which can be costly. The longer you leave it with less years to run, the costlier it is. Nobody will want to buy a property with a short-term left to run on the lease and if they do, they'll be wanting a hefty discount due to the short time left on the lease. In a nutshell - its a big ballache.
____________________
Current - Harley Davidson FXDB Street Bob | Harley Davidson FLTR Road Glide | Harley Davidson Road King
GONE - Honda CB500 Ratbike | Yamaha FZ750 | Yamaha XVS1100 | Kawasaki VN2000 | Kawasaki ER-6 F | Harley Davidson XL883L Sportster

[stinkwheel]

Look at mortgage features too.

My one lets me overpay up to 10% of the total each year.

If I've overpaid in any calendar year, that counts totards the total for that year if I find I need to underpay another month.

So say I had spare cash and overpaid a couple of months by 50%, I'd be able to pay nothing at all one month without penalty.

I don't bother with savings at all (other than keeping a "cushion" of a ew thousand for if something goes wrong with the house like the roof needing fixing) and pile as much money into my mortgage as possible. Because compound interest.
____________________
“Rule one: Always stick around for one more drink. That's when things happen. That's when you find out everything you want to know.”
I did the 2010 Round Britain Rally on my 350 Bullet. 89 landmarks, 3 months, 9,500 miles.

[M.C]

[Motorhate]

[dodsi]

[Matt B]

[Doovy]

I have the number of a very good mortgage advisor who got mine all sorted out if you want.
____________________
Yamaha RXS 100 > Honda CD 250 > Honda Hornet 600 > Honda CBR 600RR > Yamaha RXS 100 > Kawasaki ZX6R J2 > Yamaha FZ1

[Feasty]

[Derivative]

I wouldn't worry overly about repaying early unless you think the rates are likely to go through the roof.

3% is basically free money. Anything you think you can do that has a higher rate of return than that is a better use. I'm not just talking about shares here - it could be something like spending a few hundred quid on a course that gets you a pay rise, or taking a few months off work to recharge (securing the future after that and avoiding illness or whatever).

Or putting down a deposit on a second place. I'll be in hiding now for a bit to avoid Hetzer's guillotine squad.