Mortgages

[mushroom 13,228]

6 minutes ago, Francie said:

Whats collateral mush, the amount i have in bank??

House, expensive car/watch/jewellery, business etc anything that has significant value that you put as guarantee for the loan. If you have family who own their own property, they can act as guarantor for your loan. Be very aware; they will foot the bollocks if there is any!

Edited to add:

Obviously the value of the collateral has to meet or exceed the value of the TOTAL loan (interest and fees inc)

Edited November 21, 2017 by mushroom

[Francie 6,368]

Thank you mush very much

[Meece 1,958]

It's a shame that you didn't do this about 30 years ago. All of that money paid out and you don't own a grain of sand from the brickwork. Still better late than never. Best wishes for a smooth transition to ownership.

[Francie 6,368]

Thank you mate, im only 33 meself, so nows the time pal.

[Meece 1,958]

4 hours ago, Francie said:

Thanks very much lads for the advise, i only need a smallish loan around 35000, im getting a good discount on the house, ive been  in here 33 years, 

Thanks again

Reading the above, I thought that you had been a paying tenant for 33 years.  Is/were your parents the Tennants? Be thoughtful about the type of mortgage that you get. The end result can be different in as much as the house can be paid off or you can end up with a cash lump left for you. In some cases I've heard that there is a shortfall in the final payout. I don't know about these things but ask your adviser about different ways and what the end results are and the pitfalls.

[stumfelter 3,034]

If you get a mortgage some lenders let you overpay a certain amount every year. If you can do this then that's the way to go if you can afford it. We saved a fortune in interest and paid it off five years early. We also kept the endowment going and that will pay out next year.

[Meece 1,958]

37 minutes ago, stumfelter said:

If you get a mortgage some lenders let you overpay a certain amount every year. If you can do this then that's the way to go if you can afford it. We saved a fortune in interest and paid it off five years early. We also kept the endowment going and that will pay out next year.

We did this and saved a lot. We also had a with profits endowment rather than a minimum cost. Difference between the two was 40 k in payout at the end. But your adviser should cover all of this. Don't get pressured into signing up until you understand how and what it's all about. It makes a lot of difference. Don't forget that interest rates are low now so they could go up and cost you a lot over the period especially if you get made redundant or something and the payments get out of control and you end up loosing the house. It's serious stuff.

[stumfelter 3,034]

If you can buy your house off the council with a discount then do it. If you can get a 30% discount on a £100,000 house you've gained £30,000 equity straight away so it's a no brainer!

[Francie 6,368]

So does the discount stand for equity mate? An what is equity lol

 

I checked out the over payment thing an its seems good, cause my monthly payments should be low enough.

[mushroom 13,228]

Equity is the money in the value of the house that either: you haven't paid for (discount) or have already paid off (repayments over x years)

[JDHUNTING 1,817]

Get the mortgage the bank don't ask to many q,s and the interest will be better than a loan

[Francie 6,368]

Thanks again lads, you helped me alot to understand,cant wait to see my broker now, friday at three, thanks again lads.

[Waz 4,266]

Also equity can be the value of the house is higher tomorrow than it is worth today (the difference between the 2 is positive equity), negative equity is when its worth less.

Edited November 22, 2017 by Waz

[mushroom 13,228]

27 minutes ago, Waz said:

Also equity can be the value of the house is higher tomorrow than it is worth today (the difference between the 2 is positive equity), negative equity is when its worth less.

Thats normally for remorgaging and I would never advise that to anyone who can't take the hit if it goes tits up (which if they are remorgaging they usually can't). Exactly the same as playing the markets. If you have the cash spare then go for it. If not, then borrowing or hedging against something that does not exist yet and may not (no matter what anyone says about predictions) will lead to bollocks.

This is what the mortgage lenders do when they decide on your mortgage. They look at You, the value of the house past, present and then the future, to decide their risk and all so THEY will make money from you. 

You just have to get yours from the deal too

Edited November 22, 2017 by mushroom

[myersbg 1,385]

I just got the nod today on the mortgage to buy my council house, the bank were arsholes and took weeks pissing about to eventually say no on the grounds that the wifes wages were not paid into the bank, this is the bank that i have my business and personal accounts with [for now] for nearly ten years.

i went with a broker who came to the house last thursday, they want to know the far end of a fart and where it came from, but he sorted it in less than a week. he could not understand what the problem with the bank was, the house was valued at £165 thousand, the discount was £78 thou and we were putting a bit down so we were after a mortgage for less than half the value of the house.