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Discussion Starter · #1 ·
I've managed to get myself on the way to saving for my own property.

I really can't bring myself to pay a ridiculous amount of rent, so mortgage is my preferred option. As I have no interest in buying just yet, I assume that no mortgage advisers will have the time of day for me!

I'm 22 and really don't understand much in this area so where should I start my research?
 

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What exactly do you want to know? Many of us many be able to help.

If you would like to know how much lenders would lend you, you can do a Mortgage Promise application on their website which just tells you how much they would be prepared to lend you according to your current situation. Be very honest about income and debts, as if they say they will lend you for instance 100k and you go ahead, later on down the line they will find out that you got a car on HP at 8k, which will totally skew up figures and you won't get as much as the promise stated.

You can do this really simply online.

Otherwise, what do you need to know?
 

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In all honesty, I don't quite understand the question!! Just because you haven't found anything yet, it doesn't mean you can't go and have a chat with a mortgage advisor. If you don't go and see an advisor, how are you going to know how much you can borrow?!?

Phone them up and make an appointment to see a mortgage advisor at your bank and see what options are available to you and what you can borrow.

FYI, I've just heard that banks are removing fixed interest mortgages due to the recent interest rises. Get in there quick!!!!
 

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In all honesty, I don't quite understand the question!! Just because you haven't found anything yet, it doesn't mean you can't go and have a chat with a mortgage advisor. If you don't go and see an advisor, how are you going to know how much you can borrow?!?

Phone them up and make an appointment to see a mortgage advisor at your bank and see what options are available to you and what you can borrow.

FYI, I've just heard that banks are removing fixed interest mortgages due to the recent interest rises. Get in there quick!!!!
I wouldn't personally get in there quick. I'm waiting for a small downward spiral to happen (which I believe will happen though not quite as big as previous crashes).

If he's saving, then thats fine, he might now enter a market at it's peak and end up in negative equity very quick. On the other hand, market could rise and he's worse off. All a gamble, but figures and rising interest rates show more of a drop is likely or static than a major increase at the moment.

Sure many will disagree though!

Sir, you thought about Shared Ownership?
 

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Oh and a quick tip. By all means use your banks mortgage advisor to get some details and figure out where you stand. But when you do go for your actual mortgage, got for an Independant Mortgage Advisor.

Mortgage advisors in banks are trying to sell your their product. IFA's who specialise in mortgages will look across the whole range, and they recieve commision and should tell you the commision they are recieving if they sell that product. The banks fine, but you only get the option of a couple of mortgages, not the entire range.
 

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As I have no interest in buying just yet, I assume that no mortgage advisers will have the time of day for me!?
Sure they will, not that you have to tell them you aren't buying yet anyway [:)]?
Just ask for some general advice on your options, lending criteria, etc. Basic info is mortgage companies lend based on a range of factors, and usually most still lend on the basis of a 'multiplier', i.e. 3-6 times your salary. Most require a 5-10% deposit as a minimum, but there are 100-125% mortgages out there too (and they are not necessarily a bad thing). Banks will lend you the least, specialist mortgage / loan companies more.?
You can choose interest only or capital repayment. The former gets you a lower payment by about 35-45% as you only pay off the interest each month...so you never pay off the capital (at the end you will owe what you paid for the house). Works in a rising market or on property you can improve and increase the value on. Risky if prices drop (theoretically) because you would owe more than the property is worth - known as negative equity. Capital repayment pays off interest and the capital, so at the end you own it. However interest is very heavily front loaded so you will need to keep the mortgage 3-5 years minimum to start making a dent.?
The other thing you are interested in is the interest rate of course...rates have gone up again this month which is a bit odd, nobody really expected it. Its most likely a strange reaction to combating high street inflation which is on the up, but it does affect mortgage prices. Mortgages come in two main flavours:
Fixed: Rate is fixed low for a set period, but if you want out of the mortgage before that period is up there is a penaltyVariable: Rate varies based on the current interest rate
A lot of people are going for fixed at the moment as rates are very low and, should rates rise, it doesn't hit you in the same way. For example someone on a fixed 5 year deal bought 2 years ago at, say, 4.9% will still be paying that even though rates are now 5.25%.?
None of this is financial advice by the way, just Mortgages 101 [:)] Good luck and IMO the right decision
 

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Get in there quick!!!!
I wouldn't personally get in there quick. I'm waiting for a small downward spiral to happen (which I believe will happen though not quite as big as previous crashes).
Yes, that's true but it means he'll have to go for a variable interest mortgage which could negate / reduce any potential gain in waiting for a possible drop in the market. Like you say though, I suppose that's the gamble.

Anyway, I have a feeling that this is going to turn into another thread about the housing market!!![:D]
 

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Oh and a quick tip. By all means use your banks mortgage advisor to get some details and figure out where you stand. But when you do go for your actual mortgage, got for an Independant Mortgage Advisor.

Mortgage advisors in banks are trying to sell your their product. IFA's who specialise in mortgages will look across the whole range, and they recieve commision and should tell you the commision they are recieving if they sell that product. The banks fine, but you only get the option of a couple of mortgages, not the entire range.
Not quite true though as some IFA's get slightly better commision than otheres on certain products, also if you find a property that is difficult to mortgage IE an ex council flat above a commercial premises you will need a speciual mortgage that will counter that...

Do a google for charcol online, they are one of the biggest brokers in the country and you can get a quote of a few thousand products without even puttting your address on...

As for the market crashing I think its wishfull thinking, the market in flats and apartments is probably going to slump in most towns outside the SE however in Liverpool etc there is a glut of flats, but a severe shortage of traditional 2/3 bed semi detached homes, and its this that is fuelling demand.

At the end of the day infalation is high despite goverment figures a loaf of bread has doubled in price in 5 years as has gas and electricity so its only right that house prices have too....

Graham your deluding yourself if you think house prices will fall, they may have hit a plateau for a long time but the economic conditons are not right for a slump,

Personally I think we may see a slump in ceratin sectors but gains in othere sectors.... Ie apartments versus traditional homes. This would be unique in the UK but would bring the prices of houseing more inline ...
 

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I really can't bring myself to pay a ridiculous amount of rent, so mortgage is my preferred option. As I have no interest in buying just yet, I assume that no mortgage advisers will have the time of day for me!
One of the things I didn't realise as a (potential) first time buyer, until I went to see my Bank's mortgage advisor last week, is that you just find out general figures, rates & stuff while you're looking... then you find a property that you think you can afford based on your calculations, then you make an offer and AFTER that you go applying for the mortgage and securing the cash in time for paying the money on move in day. Actually that might just apply to Scotland but my point is, of course they're going to be interested in talking to you & you can get calculations based on all sorts of different scenarios - deposits, house prices & borrowing amount, etc.

I got some pretty helpful free advice about my specific situation over the phone at lunchtime from Motley Fool as well www.fool.co.uk
 

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I've used London and Country, seem impartial as they told me to phone my existing provider and ask for a specific deal. London and Country didn't get a penny off my for that advice
 

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I agree with Andy, developers and psuedo developers (i.e. builders who think they are developers because they made a fortune during the boom, when anything sold, painting a load of flats magnolia and throwing down some laminate flooring) have been building far too many two bedroom flats. They are in surplus everywhere, and the demand out there is now more towards 1 bed flats/studios and 3 bed+ houses.??
?One of the things I didn't realise as a (potential) first time buyer, until I went to see my Bank's mortgage advisor last week, is that you just find out general figures, rates & stuff while you're looking... then you find a property that you think you can afford based on your calculations, then you make an offer and AFTER that you go applying for the mortgage and securing the cash
Yup, you get a 'mortgage in principal' decision first, giving your details, and they tell you what they will lend based on your circumstances. You then have a budget and agents will take you more seriously than someone who hasn't even found out if they can borrow what the property is worth yet...Once you have found a place you apply for the mortgage proper, and the lender will send someone round to make sure its worth what you are paying (quite rare for them to say not) and tick the last few boxes on your application.?
So yeah thats what IFAs are for [:)]
 

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I'm sticking to my prices are gonna fall (but not as much) theory. I actually frequent a few websites now and not housepricecrash.co.uk

However, its not worth Sir SS hanging around, but if he doesnt plan to buy for a couple of years, which I kinda got the jist thats what he was planning, then its worth keeping an eye on. I am, as I think it will be an excellent way of buying a second property if it does drop, but it's still a case of buying at the bottom, which is hard to figure out!

Anyway, yes, you get the mortgage in principle. Thats why you have to be completely honest and dont try to hide anything. Don't think that because your car loan (if you had one) is secured on the car, they will take that into account at underwriting stage. So you get as far as making an offer, getting excited only for the lender to say no, it was a mistake I made and why i had to get rid of my cars.
 

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I personally don't think there is going to be a dip in prices. but each to their own.

Reagrding mortgage advice and independant will give you a better idea of what is available and don't worry about not planning on buying in the forseeable future - they are there to advise and will want your bussines wether it is today or in 6 months times.

To get an idea of what the market is doing have a look on right move as they have an article on the market over the previous 12 months or so. This iwll give you an idea what the trend is.

Here's a link - there was a slump in December as you would expect but overall the market rose by 13% last year.

http://www.rightmove.co.uk/template/publicsite%2Caboutus%2CRTPRArchive.vm

J.
 

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I am going to disagree with the point "of course they'll want to talk to you". I did exactly that when I was thinking of buying. I called an FA and said I'm really looking to buy in about 6 months. His reply was I can't really help until you're looking buy and what you want to buy etc. He said come back to me in about 3 months.
 

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As did the ones I spoke to and that was just with the suggestion of buying in a month's time as the rates may change or there are better offers on etc. However if you don't have a clue about any of it, as I didn't and it sounds like the OP doesn't either, yes they will be able to give you the basics & some guidance on what to do next...
 

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Discussion Starter · #18 ·
Thanks for the advice, exactly what I was looking for.

If I do start talking to advisers, will their checks hold any obligation? I mean, we start talking about facts & figures will that be like applying for a loan etc?

As I stand, I owe nobody a penny. So starting to get some money in the bank & then seriously look in 12 months time.

Seems like everybody I've called has given me the same asnswer as they did Cat!
 

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Thanks for the advice, exactly what I was looking for.

If I do start talking to advisers, will their checks hold any obligation? I mean, we start talking about facts & figures will that be like applying for a loan etc?

?
Just say you don't want to put anything through yet, i.e. make an application and start the credit checking. You will be told the figure they will lend you with no obligation, he just multiplies your salary by their multiplier on his spreadsheet - or whatever their criteria may be - and discuss what kinds of deals there are out there.?http://www.mwgb.co.uk/how-much-frm.html will gvie you these figures online though. Northern Rock, as an example, lend 3.4 times salary to low credit scores up to 5.8 for high credit scorers. More complicated than that but you get the idea. Cheltenham and Gloucester do up to 6 times at the moment.?
Obviously if its a year away then yeah, they wont spend too much time on you because A) Rates will have changed by then and B) no cheque for them for a long time. But you don't say 'Im looking to buy in 12 months', you say 'I am looking to buy now' and get advice based on todays deals, which you can then adjust when the time comes.
 

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I am 22 aswell and recently things like mortages have been cropping up in my thoughts! The other day my mum was shocked when i asked her to tell me absolutely everything she knows about mortages!

Its things like moving into my own place with a lady friend that bring a smile to my face (all together now..bless!) Seeing my brother with his young fam, its makes me realise that whatever age you are, theres always always things to look forward to! I am going to Prague at the weekend for a mates 21st and things will get really messy over there, maybe some "older" members on here will say to enjoy these experiences but still i cant wait to have to worry about mortages and keeping the wife happy!

One question though, i am waiting for the LFB to start recruiting and my mum mentioned she thinks there is a mortage/housing scheme that is for our emergency services. Does anyone know anything about this, i know there are a few peeps on here that work for the Police/Ambulance service.

Cheers

Carl [:D]
 
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