Bram
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Registered: 25th Mar 02
Location: Derby
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After some advice; me and a friend are looking to get onto the property ladder and getting a mortgage together. Initial plans are to move into the house and live in it for a couple of years but don't see it as a long term investment together.
What sort of mortgage should we be looking for in terms of fixed rate or tracker over 2 years. Having a quick shop around we're looking at raising a minimum of 20% deposit which will hopefully be possible at a push.
Will repayments come down if we commit to a longer initial payment contract.
Really confused at the mo as all of this is brand new to me, all I know is we need to get moving asap as the market is about to take an upward turn! 
[Edited on 17-04-2009 by Bram]
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ash_corsa
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Registered: 15th Apr 04
Location: Shrewsbury
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You dont want a tracker! Interest rates will eventually go back up again when house prices do so you'll end up paying more.
Get yourself on a 3/5yr fixed rate, 35yr term.
Just got our 1stmortgage with the Post Office (Bristol & West) very good people to deal with, very helpful.
Speak to an independent mortgage advisor, should offer free no obligation advice based on your circumstances.
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_Allan_
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Registered: 24th Mar 04
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As Ash said the PO are currently offering the best 5 year rate for a 75% LTV not sure about 80%. 9th of April the BofE rate is reviewed it might have an effect within the next week or two, so someone else could be the cheapest.
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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Two years isn't really enough to call it an investment unless you're doing work on it. It may appreciate slightly but you'll also be hit by fees each time you move - mortgage set up, stamp duty, solicitors (worse if you're moving as they are agent to two parties not one) as well as losing money you put in on repairs that doesn't add value, eg fixing broken things.
The 'property ladder' is a mere historical analogy. There is no wisdom in becoming a property owner unless you're spending your own money need somewhere to live.
If you just want to move in with a mate, rent. If you want an investment, buy Norwegian Krone.
Buying is for newly-weds with a bun in the oven who want to fix for ten years. Anyone else doing it any time soon by borrowing money is in my opinion crazy.
[Edited on 08-04-2009 by Ian]
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dannymccann
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Registered: 9th Aug 06
Location: Doddington, Lincolnshire
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I do agree with Ian here, the transaction costs of moving house when you rent are bad enough, let along when you have to get solicitors involved for a house move. Then dont forget if you buy a house, you are then responsible for everything that breaks inside it (boilers being a key repair here, unless you know a plumber) and over 2 years its very unlikely you will make a decent profit on it to be considered an investment. Might be better renting for a little while and saving up an even bigger deposit?
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M2RTY
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Registered: 25th May 01
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buy it yourself and charge your mate rent to live there  lol
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Bram
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Registered: 25th Mar 02
Location: Derby
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We're looking at a new build so maintainence won't be an issue. I've got a friend who works for David Wilson who can get us maximum discount.
The only reason I say 2 years is incase either one of us wants to move on after two years, we won't be penalised, we may end up staying or one of us taking it on etc but don't want to make a long term commitment as 'friends'.
Just been to see my bank (Natwest) who will do 90%LTV at 5.99 fixed for 2 years. No arrangement fee either. This sound good?
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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Being honest, that sounds terrible. You'll not benefit whatsoever from the current BoE rate and when it all starts to go up again you'll be just coming out of your fixed rate and need to re-mortgage in a worse market.
Two years isn't much security considering that in two years time the base rate will probably be significantly higher than it is now.
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M2RTY
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Registered: 25th May 01
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i would seriously speak to an indi advisor
I was ready to go with HSBC, and get my eyes ripped out on the best deal they could do
paid £150 (after 2 months of their time) to get a hell of a lot better deal that will quite litterally save me 1000s
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John_C
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Registered: 5th Mar 03
Location: South east, Bromley
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Post office are doing a 5yr fix @ 6.15% 90%LTV
600 product fee, valuation and legals will be another 500 on top.
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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Five year fix is no good, it needs a get out before then.
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dannymccann
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Registered: 9th Aug 06
Location: Doddington, Lincolnshire
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5.99% is very good though for 90% LTV, when we looked about 3 months ago the best 2/3yr fix at 90% (of £100000) was 6.4%
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John_C
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Registered: 5th Mar 03
Location: South east, Bromley
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i dont understand why you would buy for 2 yrs?? if someone wants to move on then you can just change who is on the mortgage / or change to a buy to let and rent out if neither want to be there.
Buying for a 2 yr period now is silly. Prices will be flat for at least 2-3yrs while banks sort themselves out - so no capital gain. If you buy low enough a rental return may look attractive
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Bram
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Registered: 25th Mar 02
Location: Derby
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Im not saying that we'll only be there for 2 years but its not like were going to grow old together and settle there  It's a fail safe if 1 of us does decide to move on
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John_C
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Registered: 5th Mar 03
Location: South east, Bromley
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If you get a tracker now in 2 years inflation will be alot higher and the BOE will have to put rates up quickly. Trackers and SVR's will be expensive.
If buying with a mate get a water tight contract so if things go tits up your covered. IE he walks out you're still liable for the whole mortgage
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Bram
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Registered: 25th Mar 02
Location: Derby
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The house is now of the market so pending the mortgage being agreed on Tuesday should exhange within the month  Complete at the end of June! 
What a day
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Cavey
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Registered: 11th Nov 02
Location: Derby
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Where in derby are you looking at Bram?
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Bram
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Registered: 25th Mar 02
Location: Derby
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Borrowash, getting the mortgage sorted on Tuesday and then we can start legal proceedings
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Deadude
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Registered: 30th Jun 07
Location: Spondon, Derby
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can i come and visit  only up the road
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Bram
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Registered: 25th Mar 02
Location: Derby
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No
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Bram
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Registered: 25th Mar 02
Location: Derby
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Well Natwest have well and truely cocked things up! The offer that I was given in branch last week was misquoted by the advisor, for a 2 year fixed rate we're looking at 6.3% and a £799 arrangement fee. Puts the repayments up quite a bit. Shopping around it's still the best option for a 2 year fixed but I'm thinking that although a higher risk 5 years is the way to go? 
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atz_49
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Registered: 17th May 05
Location: Midlands Drives: 350Z
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quote:
Originally posted by Bram
Well Natwest have well and truely cocked things up! The offer that I was given in branch last week was misquoted by the advisor, for a 2 year fixed rate we're looking at 6.3% and a £799 arrangement fee. Puts the repayments up quite a bit. Shopping around it's still the best option for a 2 year fixed but I'm thinking that although a higher risk 5 years is the way to go?
I suggest you take a look at HSBC. Miles better than anyone else at the moment.
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Bram
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Registered: 25th Mar 02
Location: Derby
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They won't touch new builds though 
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Bram
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Registered: 25th Mar 02
Location: Derby
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Put an offer in last Friday of £155k which was sent off for MD approval, signed forms confirming the offer and was told I'd be called over the weekend once the MD had vetted the weeks sales. Friday afternoon got a call back from the sales agent onsite congratulating me that the offer had been accepted, went back and filled in some more forms to send to solicitors etc and paid a reservation fee to take the property off the market.
On Wednesday, a full 5 days later had a call from the Sales Director (below the MD in terms of status) saying that they were unable to offer the property at £155k and that they were sorry for any inconvinience! Needless to say I was fuming!  They're now asking for £167k and are refusing to budge!
I can't believe it, unbelievably bad service! I've written to the MD asking for an explanation as to how and why it happened
I think they're calling our bluff a bit so will continue to negotiate but don't think the property will be about much longer, building should be complete in a week or 2.
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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Count your blessings tbh.
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