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Mortgages
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userSyd
Posted: 16 August 2008 9:02 AM
Subject: Mortgages
 
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Location: Sunderland


Been talking to a friend of ours who wants to get a mortgage of £48,000 on a house valued at about £100,000. He does have up to £25,000 to put into it if needs be, but doesnt want to if he can help it
What does he get, if he can get one that is.
Tracker or what.
I feel that a tracker would be ok as the interest rate is nearing it's high (I hope) now and after a few more months it should either stabilise or even start falling a fraction.

I'm not expecting a legaly binding opinion just an opinion
userMick H.
Posted: 16 August 2008 9:51 AM
Subject: RE: Mortgages
 


Epic contributor

Posts: 1622
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Location: Salisbury. but on the road, Marnhull, Dorset.again


Syd - 2008-08-16 9:02 AM

Been talking to a friend of ours who wants to get a mortgage of £48,000 on a house valued at about £100,000. He does have up to £25,000 to put into it if needs be, but doesnt want to if he can help it
What does he get, if he can get one that is.
Tracker or what.
I feel that a tracker would be ok as the interest rate is nearing it's high (I hope) now and after a few more months it should either stabilise or even start falling a fraction.

I'm not expecting a legaly binding opinion just an opinion





Think you are being optimistic if you think the interest rate is steadying Syd .I think bank robbery would be a safer way of getting money at the moment.
userMel B
Posted: 16 August 2008 6:10 PM
Subject: RE: Mortgages
 


The special one

Posts: 12468
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Location: E Yorks, 2015 Globecar FamilyScout L Ducato Maxi


We changed our mortgage provider in April as our 2 year fixed rate came to an end. Whilst there were some fixed rate ones out there, they all had either massive tie ins for loads of years or wanted a great chunk of money to 'buy' the deal, anywhere up to £3,000!!! As we are (still!) hoping to be able to sell up and move in the near future, we didn't want to get tied down with a mortgage.

In the end we got a very good deal with the HSBC, on a tracker, we had the choice of two, the first was a no fee option so you pay a little bit higher rate, the second was to pay around £500 but for that you got a better tracker rate. Unless we go over 18 months with the mortgage then the no fee one is the best deal, so that's the one we went with. As the interest rates dropped a little just after we got it, it was the best option - if we'd gone for a fixed rate deal we'd be paying more than we needed to and we'd have paid for the priviledge!

He really needs to work out how much interest he can get on the £25,000 and whether he can earn more from saving or whether he would be better off using this to reduce his mortgage borrowing, in most cases the mortgage rate will cost more than he'll get in any savings account interest so he might be better putting some in ISAs (him and his other half ... assuming he's got one) as these tend to pay the best rates and often more than his mortgage interest rate will cost so he won't be losing out, then if he needs some cash he can get at it.

There are still some off-set mortgages out there, where you put money aside in a savings account but instead of getting interest on it, they don't charge you interest on that amount of your mortgage. Did look into this a bit but it seems a bit pratty at the time so we didn't bother.

I'm not a mortgage broker, just someone who looked into it in details earlier in the year.
userTracker
Posted: 16 August 2008 6:20 PM
Subject: RE: Mortgages
 


What goes up must come down Syd - and probably go back up again - so just as a tracker mortgage will follow the rates down eventually so they will also just as surely follow them back up again.

However when dear old George W (the leader of the allegedly free but decidedly insane world) or Vladimir (the impaler!) Putin (leader of the overly ambitious and overly wealthy with oil and gas riches) decide to start WW3 that will be a whole new ball game?

I doubt there is any such thing as cheap money any more but with Alliance and Leicester, for example, paying 6.5% gross (5.2% net) as one of the better interest rates about you have to wonder whether the flexibility of having £25k handy is worth the extra cost of the borrowed cash.

Depends what the £25k would be doing I guess? If it is just 'rainy day' money - well maybe a decent credit card with a high limit would be as good a 'get of jail card' as any high value savings account?

On the other hand if the £25k is needed for something essential like a new (non Fiat) Motorhome or a Jaguar or a boat or summat - well you can't argue with that now can you!

Just my view and probably full of way out ideas that may or may not be realistic or reasonable?
userBrock
Posted: 25 August 2008 10:31 AM
Subject: RE: Mortgages
 
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Location: Wirral - 2013 Hymer BClass 504 130bhp


Syd, I know you are not asking for advice, but as someone who worked in the mortgage business for many years, I strongly recommend that your friend gets professional help from someone with the right qualifications. Mortgages are not fashion accessories so the trendy products that exist may not be suitable.

Tracker mortgages are ideal for the targeted segment of customers. Fixed rate products are a good indicator of future rates because they reflect what the money market expects to happen in the future.

Each person's current and future financial needs are different and the product has to be sufficiently flexible to adapt to likely changes. Your friend seems to have surplus cash and there is therefore the question of how much cash he needs to cover his likely living expenses. Too many people are asset rich and cash poor and thus have cashflow problems.

There are professional mortgage advisers who let the industry down. However, your friend will at least have some come back if he is sold the wrong product.

My opinion is to go and see at least three different mortgage companies (not brokers) and compare the advice received - it should be similar.
userROON
Posted: 25 August 2008 11:25 AM
Subject: RE: Mortgages
 


Forum master

Posts: 2253
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Location: North West - Peugeot Eldiss


Agree completely with Brock about going to more than one advisor.

In the meantime, I attach a link to the website of that man who comes on the tv programmes giving advice on which services to use; mortgages, gas etc etc. It might be of some help to you. Joy

http://www.moneysavingexpert.com/?utm_source=jantip&utm_medium=email
userSyd
Posted: 25 August 2008 5:42 PM
Subject: RE: Mortgages
 
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Location: Sunderland


Thanks everyone, I have passed your advice along
userBrian Kirby
Posted: 25 August 2008 11:17 PM
Subject: RE: Mortgages
 


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Location: East Sussex. Motorhome: Knaus Boxstar 600 Street


If it's still around, and you have a regular income, the HBOS (ex Halifax) Intelligent Finance option was quite good. 

In essence, it allowed all your income, savings, etc to be set against your borrowings, with interest calculated daily.  It is an "offset mortgage", but the debt was offset against all your current and savings account balances.  The rates were not that attractive at first sight, but because all income/savings reduce the mortgage debt as they come and go, you are effectively getting the borrowing rate on all your savings, and only pay interest on the amount by which the actual outstanding debt exceeds all positive balances, and you can't beat that!  If you need to, you can draw money out at any time up to the approved mortgage maximum, so in effect you have a permanently available instant loan facility as well. 

However, you do have to do the sums, to see how it works for you.

userSyd
Posted: 26 August 2008 8:49 AM
Subject: RE: Mortgages
 
2000500100252525
Location: Sunderland


Thanks Brian, will let him know.

Had a thought last night while watching the TV program on how the Banks rip us all off.

Pondering this, Is there a better return on money than from spending it NOW because of the diminishing returns and ever increasing inflation plus the "crunch" making things cheaper in the shops.
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