Page 1 of Can Someone give me a crash course about Mortgages???

Hi Guys,

I know absolutely nothing about mortgages and i want to (at some point) buy a house/flat with the Missus.

Problem is, there seems to be loads of different mortgages out there and i havnt a clue which would be best for me.

The price of an average 2 bed flat in Cambridge is an astonishing £100k or thereabouts and thats what im hoping to able to get.

We have NO savings to put down a deposit and we are earning a reasonable joint income. I know i have a two minor `blips` in my credit history, although for the last 18 months i have made all payments on time (credit card, student loans, overdraft, phone bills etc)

What would be the cheapest option for me to go for?
Can i get a 100% mortgage?

Have you recently taken out a mortgage? If so where would you recommend i look for either more advice, or a particular lender???

All your input would be greatly appreciated.

Regards,

Neil

I`d suggest you start saving towards a deposit, you`ll probably get a better rate of interest if you only borrow 95%.

Endowment mortgages are where you only pay the lender the interest, and at the end of the term you owe what you borrowed. You pay additional money into an endowment, which hopefully matures ofter 25 years or so with enough to pay off the bank. Problem is that all are performing badly due to the current economic climate.

Repayment mortgates mean you pay back more each month but the amount you owe decreases slightly with each payment. Maybe a better option at the moment.

Best bet would be to pick up a mortgage mag from WH Smiths or somewhere, it`ll probably have a section for first time buyer and be able to point you towards the best lenders. It`ll also help if you are having trouble sleeping.

Good luck.

Cheers

Wad.

Massive amount of help on http://www.charcolonline.co.uk

Also gives loads of quotes against income, purchase price etc. for loads of Building Soceities..

Ste

Go and see a Mortgage advisor, its free and you`ll get the bottom line on how much you can borrow and everything else you need to know!

Remember that your "advisors" will receive a s***load of commission for selling an endowment mortgage. They aren`t so keen on selling (infinitely safer) repayment mortgages because `safe` products don`t line their pockets with gold!

for the love of god DON`T get an endowment mortgage! just cancelled mine after 5 years and switched to repayment, and a bloody good job I did too, the endowment would`nt have come anywhere near covering the cost if the current situation stays like it is for too much longer.

Have a look here http://www.thisismoney.com.
I used this to remortgage -excellent information.
Best advice i can offer is to go for a repayment mortgage.
I cashed my endowment in after i found that it was going to fall £12k short.

Good Luck

The "advisor" I had the meeting with was on a flat rate commision regardless of what mortgage I took out?

for the love of god DON`T get an endowment mortgage! just cancelled mine after 5 years and switched to repayment, and a bloody good job I did too, the endowment would`nt have come anywhere near covering the cost if the current situation stays like it is for too much longer


I`d agree with this - since the early nineties endowments haven`t been doing as well as they did in the eighties. I took out an endowment when I was 18 (1987) - it was one of the best pieces of advice my parents gave me, because I didn`t buy a property until 1996. My advice - save the money until you have a decent deposit - once you`re on the property ladder, it`s much easier when you come to move on.

Neil

I may be biased as I work for a Newcastle based bank in Pboro but we offer mortgages of upto 125% loan to value with a competive fixed rate.

Things to watch out for are mortgage idemnities at such a high LTV (also called high loan to value fees among other things).

Agree that sitees such as "moneysupermarket" are good places to research

Main piece of advice buy your mortgage direct from the lender not from an estate agent or other introducer cos once they have made the sale they are not intertested and will fob you straight off to the lender. Oh and it is illegal for an estate agent to insist you see their mortgage advisor as a condition of putting your offer forward to the vendor and I know that is quite common in Cambridge

Good luck

Duane