Mortgage for about 10K

[Riverman]

Not quite got that much. 40k would completely clean me out. I'd have to sell my pay for the solictors / valuations on credit cards and max my overdraft to get that. I was sort of expecting a 42k house to go for 38lk. Obviously not!

Redbike can you afford to wait? It is a slight gamble I guess but just look at the state of the economy. You're in an unusual position being able to raise almost all the capital to buy a house. Thus if the market shifts into an upward gear you could act quickly but if it shifts down it solves your problem.

By the way there are still some house buying schemes aren't there? Anyone remember those joint ownership scheme things with the government. You could get a bigger house and take out a 25k mortgage.

 

[Crankarm]

Redbike can you afford to wait? It is a slight gamble I guess but just look at the state of the economy. You're in an unusual position being able to raise almost all the capital to buy a house. Thus if the market shifts into an upward gear you could act quickly but if it shifts down it solves your problem.

By the way there are still some house buying schemes aren't there? Anyone remember those joint ownership scheme things with the government. You could get a bigger house and take out a 25k mortgage.

Why would some with nearly £40k in the bank enter into a shared ownership scheme? First you start talking about financing a property transaction using credit cards then give the impression that an unsecured loan has no consequences. It does you can still lose your house and they are alot more expensive than a secured loan. Do you know what you are talking about? A mortgage is the most appropriate financial product to purchase a property. Go and talk to a few lenders to see what they can offer you. As you are putting up at least 75% of the value of the property the risk to them is quite low so you may find you get offered some pretty good deals. You just need to make sure you watch the administration costs. Yes the market may decrease yet more, but if you get a property for the right price for you then in the long run given the falls we have already had you will be a winner. Red bike do not follow any of this advice from Riverman.

As regards this £42k property you went to see you have to ask why was it so cheap or are properties selling at that price in that area? As corrupt as politcians are estate agents still rank below them as vermin in my mind. If some one has a house on the market for £42k and you offer £42k then you would have thought your offer would be at least be given consideration and likely be accepted. I smell a rat and it is the estate agent. He needs reporting to Trading Standards or DTI or which ever office now regulates them. Misleading advertsing - £57k!!!!! Estate agents are vermin. I would say house sales are so slow if they can talk the market up it increase their commission achieving a higher sale price .

Just a thought but do you want to tie up all your cash in purchasing your property? You might then experience a few cash flow problems as you will need a bit of cash to kit out your new property which can cost a bit depending on your tastes of course. It might be better to go for a secured loan which will be more expensive than a mortgage or a mortgage but of course lenders tend to have a minimum figure for the latter. A really cheap mortgage and pay it off as soon as your circumstances allow. You are not under such pressure financially if you subsequently cannot do so as you anticipated compared to a.......credit card or an unsecured loan . A lender is not going to force sale of your property if you have a small mortgage and a huge amount of equity in your property compared to a credit card company or an unsecured lender who will force sale of your home to get their debt/loan repaid plus costs.

How about visiting Charcoal to see what they can offer? Alternatively for the mainstream lenders I would initially try HSBC and Nationwide. Have you have a mortgage before? If not you could qualify for a first time buyer's mortgage which are cheaper than remortgaging. You would certainly want all your legal and survey fees included IMHO and any other you costs you can haggle out of them.

If a property is really cheap because it needs a fair amount of renovation I would get a full structural survey unless you are a builder, architect or surveyor. At least they will value the property which will give you a better idea of what to offer. If things go tits up you can at least sue them. Don't listen to Estate Agents, apart from being vermin they have a vested interest to get as much as possible from you. They will literally tell you anything. A property I was imterested in I subsequently found out from other agents had been on the market for 14 months despite the agent who showed me round saying it had just come onto the market 3 weeks ago. Vermin. When I confronted him with his lies he got really shitty as I had caught him out. Scum. Do not tell the agents anything until you make an offer - either cash or with mortgage in place. Just make non committal noises during the viewing, try to point out a few faults but don't be too negative. The less signals you give away the better. Then call them to tell them the offer you want to make don't negotiate with them in the property itself. Also all offers subject to a satisfactory survey.

If the house is in Staffodshire is it in a former or current mining area? As be careful of subsidence issues due to excavations hence the importance of a full survey.

That's it for now. Don't rush into anything as you will have a lot of your own money tied up in the property as opposed to offering a 10% deposit and a lender stomping up the rest.

 

[Riverman]

Why would some with nearly £40k in the bank enter into a shared ownership scheme? First you start talking about financing a property transaction using credit cards then give the impression that an unsecured loan has no consequences. It does you can still lose your house and they are alot more expensive than a secured loan. Do you know what you are talking about? A mortgage is the most appropriate financial product to purchase a property. Go and talk to a few lenders to see what they can offer you. As you are putting up at least 75% of the value of the property the risk to them is quite low so you may find you get offered some pretty good deals. You just need to make sure you watch the administration costs. Yes the market may decrease yet more, but if you get a property for the right price for you then in the long run given the falls we have already had you will be a winner. Red bike do not follow any of this advice from Riverman.

Crankarm he wants to borrow 10k! The simple fact is he won't get a mortgage for 10k so I'm giving him some very simple advice in how to borrow £10k the cheapest way.

Please tell me another way he can borrow £10k at best at 0% for several years or at worst about 3% with a fee of £600 which can also be borrowed at the same rate?...

A mortgage is the most appropriate financial product to purchase a property.

Not when you've got 42k it's not! I think you've missed the point entirely.

If I were in this situation I would do one of two things.

1) Place offers at around £5k above the capital I have (taking into account survey costs etc), then borrow £5k for the deficit using the methods I have outlined

2) I'd take out a 25k mortgage and use the extra capital to buy a larger house/improvements

Redbike see here for a guide of secured vs unsecured loans


http://www.moneysupermarket.com/c/unsecured-loans/secured-loans/guide/


Martin Lewis guide on cheap loans

http://www.moneysavingexpert.com/loans/cheap-personal-loans


If you don't mind me asking Redbike what is your credit history like?

Credit Expert offer a free trial of their service which will enable you to view your credit history and score. However be warned, they only show credit history from one credit reference agency and there are three (although experian and equifax are the most widely used).
http://www.creditexpert.co.uk/

As far as unsecured vs secured goes I'd go with Martin Lewis's advice below

Most high street personal loans are ‘un-secured’. Rather annoyingly, that sounds like a bad thing, but it isn’t. The alternative, and the kind you’ll see mountains of TV ads for, are ‘secured loans’, and for the following reasons I’d steer well clear...

*

Your home could be taken away.

A secured loan literally means the debt is secured on your house (or something else you own), meaning if you can’t repay, the lender can repossess your home. With unsecured loans, it’s much much less likely this will happen.
*

Personal loan rates are fixed, secured are usually variable.

Almost every unsecured personal loan is at a fixed rate; you know exactly what you’ll pay from the start, and it won’t change if the UK’s interest rates do, or on a lender’s whim.

Yet secured loans have variable rates, meaning the lender can up your payments when it likes; and they often do like to! In the past secured loan rates have been known to double, hitting people’s pockets hard.
*

Secured loan repayments are stretched over many years.

Secured lenders often promise “one easy low monthly repayment”, while it may sound good, it’s done to stretch the debt over many years, so you pay more, and more, and more interest, costing you a fortune.

As this is so important, in case I haven’t made the point strongly enough yet, here it is writ large…

Secured loans give the lender security, not you. It’s far, far, better to take a normal unsecured personal loan than one secured on your house.

Secured loans are rarely a good move, and should be considered lending of last resort. They're only applicable in very limited circumstances (see the Secured Loan article). Those with reasonable credit scores should consider a personal loan, cheap credit card deals or even extending their mortgage instead. Those with a poor credit history looking at secured loans as a way out should read my Step-By-Step Guide To Problem Debts as an alternative.

You will get a better rate because of your equity but I weigh this up with the negative points above.

 

[RedBike]

I've just discovered that the HSBC now offer mortgages from just 10k. Their rates aren't great but they're the ONLY company i've found so far that will offer such a relatively small mortgage.

I would 'only' end up paying back 12 (Depending on the term) on a 10k mortgage so I suppose it's not too bad. I've booked an appointment to go and see them.

Next stop is finding the house!

 

[dellzeqq]

Whoa! Stop there! Where did shared ownership come in to this?

BEFORE YOU EXCHANGE CONTRACTS get your solicitor to explain in really straightforward terms, what liabilities you will enter in to, and what restrictions there are on selling your share on. And anything else. Take notepad and pen. Write everything down. Ask any questions that come in to your head.

If your solicitor is reluctant to spend the time with you then find somebody else. If your solicitor tries to wriggle free of questions by saying 'these things are all standard' then get somebody else.

Check with an estate agent (other than the one that acting for the seller) that selling on is straightforward. And ask yourself what the market price of 100% of the property would be. It's not good to buy a 50% stake for 60%. And check the service charges on other developments managed by the same people.

I'm not trying to scare you (well, perhaps a little bit) but I've worked on shared ownership schemes, and if either of my daughters made a move toward one I'd beg them not to. THEY DO VARY WILDLY.

If in doubt pm Patrick Stewart. He knows more about this than I do.

 

[Crankarm]

Whoa! Stop there! Where did shared ownership come in to this?

BEFORE YOU EXCHANGE CONTRACTS get your solicitor to explain in really straightforward terms, what liabilities you will enter in to, and what restrictions there are on selling your share on. And anything else. Take notepad and pen. Write everything down. Ask any questions that come in to your head.

If your solicitor is reluctant to spend the time with you then find somebody else. If your solicitor tries to wriggle free of questions by saying 'these things are all standard' then get somebody else.

Check with an estate agent (other than the one that acting for the seller) that selling on is straightforward. And ask yourself what the market price of 100% of the property would be. It's not good to buy a 50% stake for 60%. And check the service charges on other developments managed by the same people.

I'm not trying to scare you (well, perhaps a little bit) but I've worked on shared ownership schemes, and if either of my daughters made a move toward one I'd beg them not to. THEY DO VARY WILDLY.

If in doubt pm Patrick Stewart. He knows more about this than I do.

+1 with dellzeqq . Shared ownership means literally that you are not the sole legal owner of the property and as dellzeqq states you may be entering into an agreement more detrimental to you than sole legal ownership of the freehold. I wouldn't touch it with a barge pole. Of course you can share ownership with a spouse which is common or other family members and stipulate your equitable shares when you purchase. Seek independent legal/financial advice and ask a lot of questions. As dellzeqq states if you feel you are being fobbed off or not getting the full story go elsewhere. Also get an estimate of your solicitor/advisor's cost to advise you upfront in writing.

Wrt HSBC sounds promising but as I say haggle to get the costs down or lower interest rate as on the face of it you appear a pretty safe risk as your are putting so much equity into your property in contrast to many who can just about scrape 5% of sale price together if that so need a 95% mortgage. Remember they will want your business. It might involve quite a bit of leg work to get the best deal. Down side if prices do decrease further your equity will decrease but any loan/mortgage will remain. That's why muppets who took out 100 or 125% mortgages are now in negative equity or have lost their houses as they can't keep up with repayments and can't sell as the property is now only worth 80% of what it was 2 years ago and are facing bankruptcy as they have no equity in the property, other assets or extra income to fall back on.

Why would you enter into an expensive unsecured loan when you can get a much cheaper mortgage interest rate? Unsecured loans typically charge 8-10% interest even up to 15% and much steeper repayments as it will be over a much shorter term. Whilst you don't want a small mortgage to go full term it will give you a few years of cheap borrowing so the money you save you can use to make capital repayments to reduce the balance and interest payable.

As for Martin Lewis he does a lot of good but sometimes he does lose sight of legal issues and the consequences of entering into some arrangements he proposes which can be fraught with risk should things go tits up. He is no substitute for sound legal advice. Plus if legal advice is wrong you have recourse to sue a solicitor you would have little chance of success bringing an action against Mr Lewis. I'm sure his disclaimers on his site are often over looked.

 

[Davywalnuts]

Redbike,

Hi, ive just noticed this thread.

To answer your very first question, yes, you can get a mortgage that low. I've not done one that low before, but close. And when I say that, its because I am a independant mortgage broker.

You should also try Woolwich, Nationwide Building Society, Abbey, Cheltenham & Gloucester & Halifax. You can also have your mortgage over what term you wish, within the lenders criteria, not just 25 years!

HSBC, are a pain in the ass and very very slow! Albeit they do often have good rates, its coupled with poor customer service and never ending and constant changing criteria. And they will want everything and the kitchen sink, plus the plug, and water!

I cant understand why shared ownership has been brought up! So ignore it please.

Estate Agents can be a pain to deal with and always take what they say with a pinch of salt. They are not your friend! If you want to put an offer in, get them to phone this to the vendor and dont take no for an answer. There's rules, guildlines and best standard practices they have to adear to, like I do, but they will lie, thats a fact!

Am sorry, but you cant haggle on what interest rates a lender is offering, and certainly not at your level of borrowing. Their product range is just that, nothing nice hiding in the background or under a closet somewhere! You can haggle on a purchase price however.

If you need any help, PM me! However I am away from this evening till tuesday, so wont be able to get back to you till then.

One word of note however, the more lenders that do credit scores on you, by either an applicaiton or and by an agreement in principle like, the more it can affect your credit score. Only agree to have your credit scored if you are happy to proceed with everything!

I hope this helps and good luck!

David