Mortgage for about 10K

[RedBike]

Can you get a mortgage for only about 10K

Or would I have to open an offset mortgage for the full amount of the property and put my 'deposit' into a savings account to reduce the total amount owed to just 10k?

 

[Mr Pig]

Can you get a mortgage for only about 10K?

I would think so.

 

[Soltydog]

Not many lenders will do a mortgage for such a small amount. First Direct mortgage minimum was £30k about 8 years ago

 

[Night Train]

You could, I guess, get a mortgage for any small amount but the question would be 'Why?' when there may be other products that can be used without putting a house down as security and paying interest fro a lot more years.

 

[Riverman]

Maybe get a personal loan instead. At least they can't take your house if you default on payments.

+ if you can get hold of a couple of 0% credit card details you could offset the debt with that. It's called 'Stoozing'. (you'll need a super balance transfer card and there are only a couple left)
http://www.stoozing.com/

Make sure you use a cashback website when you apply for credit cards.

www.topcashback.com is a good one. If you need any help ask.

Remember to clear your cookies before you visit a cashback website.

 

[HLaB]

If you were an MP you could get a mortgage for anything and even better you could get somebody else to pay it

 

[RedBike]

You could, I guess, get a mortgage for any small amount but the question would be 'Why?' when there may be other products that can be used without putting a house down as security and paying interest fro a lot more years.

I want to buy my first house. I have a nice deposit but i'm about 10k/15k short for the area / type of house I want to live in.

I had major trouble getting a mortgage a few months ago due to health reasons but I 'think' i've sorted that all out.

 

[Riverman]

Personally I'd wait a little bit but it's not a bad time to buy really.

I'm hoping prices completely plunge over the next three years.

www.housepricecrash.co.uk

 

[Night Train]

I want to buy my first house. I have a nice deposit but i'm about 10k/15k short for the area / type of house I want to live in.

I had major trouble getting a mortgage a few months ago due to health reasons but I 'think' i've sorted that all out.

For the sake of £10-15k I think it is a good investment moment. I would say that it is worth having a chat with the bank and talking about both the mortgage and personal loan options. The thing to also look at is the very low rates of interest too. That may swing it one way or the other.

A mortgage could have a very low fixed rate for, say, 5 years but you will be paying for 25 years overall. The personal loan may have a higher rate but it will only be for 5 years all in. The bank should be able to give you projections of the overall cost of the borrowing, and the monthly repayments.

Check also the fees if you changed your mortgage after the fixed rate period. It may be worth getting a mortgage for the fixed rate period, say three years, and keeping the repayments low for now and then later on when the economy improves and the rates go up (and your income improves further?) change to a personal loan and pay it off in five years, 8 years overall.

 

[Crankarm]

Most lenders have a lower limit of £25k. The prediction for interest rates as the economy re-gains confidence is in an upward direction. Having a sizeable deposit gives you a lot more bargaining power. See if you can fix at a low rate for as long as you can say 5 years then you will IMHO be onto to a winner. A lot of really low fixed rate mortgages were scrapped ages ago. I would open the best interest bearing account ISA you can find and try paying off the £10k into this over the fixed period of your mortgage so when period comes to an end and you are outside the redemption penalty period you just pay off the balance of the remaining mortgage. However set up costs for fixed mortgages can be punative on such a small advance. Try not to fall into the trap of a lender saying £10k is so small a sum, how about we offer you £25/30k instead? Whilst you might be able to afford the repayments over 25 years it will be very costly to you. I woud also haggle like mad to get them to pay the mortgage fees/costs. Also consider an offset mortgage if you regularly have a decent bank balance. If you have a house a lender would always seek to take this as security for their loan as this is a lot less risk which will mean a cheaper deal for you. There shouldn't be a problem if you are easily able to pay it off. If a personal loan is unsecured it doesn't mean that a lender cannot take your home. They can either force sale if you become insolvent through bankruptcy proceedings or place a charge on it for when it is sold. A lender will seek to recover their loan by any means from the sale of any asset(s) you have or any equity in any property. As I say I feel you are in a pretty strong position with a sizeable deposit. Of course this is just a layman's advice and does not constitute formal fincancial advice for which you should seek specialist advice. Good luck.

 

[Riverman]

Quote:
Originally Posted by RedBike
I want to buy my first house. I have a nice deposit but i'm about 10k/15k short for the area / type of house I want to live in.

I had major trouble getting a mortgage a few months ago due to health reasons but I 'think' i've sorted that all out.

For the sake of £10-15k I think it is a good investment moment. I would say that it is worth having a chat with the bank and talking about both the mortgage and personal loan options. The thing to also look at is the very low rates of interest too. That may swing it one way or the other.

A mortgage could have a very low fixed rate for, say, 5 years but you will be paying for 25 years overall. The personal loan may have a higher rate but it will only be for 5 years all in. The bank should be able to give you projections of the overall cost of the borrowing, and the monthly repayments.

Check also the fees if you changed your mortgage after the fixed rate period. It may be worth getting a mortgage for the fixed rate period, say three years, and keeping the repayments low for now and then later on when the economy improves and the rates go up (and your income improves further?) change to a personal loan and pay it off in five years, 8 years overall.

Maybe, but if he has a modest income and a couple of other credit cards he could balance transfer 10k at 0% on a couple of SBT credit cards (see link). That would give him a year to think about things.

He could pay about half back from the credit card balance too and apply for another 0% credit card deal when the 0% offers on other cards expire.

That way his only cost would be the balance transfer fee, roughly around £250-£350 for 10k.

His minimum monthly payment would be 2, 2.5 or 3% of the outstanding balance. So the first monthly payment would be roughly £300.

If you manage to pull this off and pay off 10k in two years, that's just £600 you'll have to actually pay.

That's only if he can get accepted though. I think it helps if you can show that you have high credit limits on your other cards.

I'd love to pay for a house in cash lol.

Note: Super Balance Transfers are balance transfers that go sraight into your bank account. No purchases necessary.
http://www.stoozing.com/sbt.php

I like the look of the post office card. Would be great if you could get a 10k BT limit on that.

If he feels uncomfortable 6 months into this, he could always then apply for a mortgage to pay off the debt couldn't he?

I think it's worth stressing again that credit cards are unsecured. Which is important if you're using the money to buy a house.

 

[sheddy]

Would avoiding a 'mortgage' and being "a cash buyer" put you in a very strong position to see off any other potential buyers on the property ?

 

[RedBike]

If I have got my sums right (doubt it)

I can repay 10k back over just 5 years so I can fix my rate for the entire length of the mortgage. I'm guessing my payments will be about £200 per month which will be a sqeeze for me.

 

[RedBike]

Would avoiding a 'mortgage' and being "a cash buyer" put you in a very strong position to see off any other potential buyers on the property ?

No, I will still need to go through the solicitors so everything will still take just as long. Not being a chain will help though (I think).

 

[dellzeqq]

let's assume that you have done your sums right, and taken account of solicitors fees, stamp duty (if applicable) and so on. I think you are in a better position as a cash buyer. And that better position might translate into this kind of conversation

'my solicitor is ready to go and I've got the cash - how about £5000 off?'
'your logic is impeccable and your lycra is the most marvellous arrangement of pink and blue I've seen in many a long day - I agree'

I might be overdoing the reply a bit, but you take the point - being where you are might save you a lot more money than you'd spend by simply maxing out the credit cards (which don't have an arrangement fee) and getting a £5k loan to pay them back when you have the time to do so. Every seller worries about the interval it takes to get a building society survey (another expense you can do without but see*) and you would remove that worry.

*One of the great things about being a cash buyer is that you can get the survey you need, and the surveyor is answerable to you and nobody else. It could be cheaper, and if you follow him or her round and mention that you will sue his or her slippery ass if there's a f*ck-up (accompanied by pulling your finger across your throat in a meaningful, but helpful fashion) you will get a decent survey. Some building society surveys are conducted from a car - that never quite stops as it goes past the front of the house.