ukintexas

Hi All,
In my quest to gather information to try and help us with our decision as to whether we move home or not, I've been looking at mortgages.
I contacted a company recommended on the links here, who have yet to contact me back! I've also contacted a UK broker that was recommended to me and they are saying a minimum deposit of 25% would be required to get a mortgage at the moment. I really don't have that kind of money tucked under my mattress, so I thought I would get a concensus from anyone who has managed to do it for less outlay than this? Thanks.

dunroving

I got my current mortgage back when they were giving 95% LTV and .5% above BoE (26 months ago) ... now you are very lucky to get anything greater than 80% LtV without a stonking interest rate ... there are some 90% LtV (so, 10% deposit), but it's very difficult to get an IR below 5% or so ... there are some 2-year fixes, but in 2 years when you remortgage, you could be in deep doo-doo if the economic climate is any worse or house prices keep dropping. I'd recommend you get a tracker, so you are not forced to remortgage ... or a deal that takes you beyond the 2-year mark.

Personally, I'd rent for 6 months to a year if I were you because (a) house prices aren't going anywhere but down, and (b) I think the mortgage market will loosen up over the next 12 months.

Times Money section does a pretty good job of covering current mortgage situation ... you could search on their online site.

I am not a financial advisor, so don't take my word for all this, and DYOR ...

ukintexas

Thanks dunroving. I'll def take a look at the Times. Renting does seem to be the best option. I'm trying to juggle the fact I'd need to get my kids into a State school so would need to try and find an address that would stay within catchment if we then left rental to go into a mortgage again. Also, I've never rented, so have to get my head around the psyche of paying someone elses mortgate rather than my own! Thanks for the info tho.

dunroving

At some times, renting makes little sense (the money down the drain analogy). Currently, this is a false analogy (in fact, the opposite may be true, if house prices continue to fall) ... owning can be a lot more expensive than renting, especially if you end up moving within 2-5 years. The TV progs are still pushing buying as preferable to renting, which I find extremely irresponsible.

ukintexas

That's a really good way of explaining it dunroving - thanks for that.

Bevm

True, but if the house price goes down, that's lost money, too -- theirs not yours. It's a gamble. It also depends on where you'll be. Some areas are more dicey than others.

Also, if you are in a position to buy and you're willing to take on a place that needs work, that might buffer you against any further slide in prices.

One thing I didn't know is that local tax -- rates -- isn't included in the rent in the UK, so be sure to take that into consideration.

Bev

Patrick2976

Hi. I am a qualified UK mortgage advisor. You are welcome to PM me. There are some decent rates at 85% LTV but at 90% you're looking around 6.5% and they will tie you in for 5 years.

dunroving

Do you think that mortgage companies will relax their criteria over the next few months (%LTV and margins over BoE)? As I stated earlier, now may not be the best time to secure a mortgage (ie., terms might improve; no point getting a mortgage on something that might decrease in value) ... what's your expert opinion?

Patrick2976

The lenders still percieve high loan to value as a risk. Although there is evidence of the fall in the UK house market 'bottoming out' it will take a while for the banks and building societies to reflect that in their products. Consequently 90% mortgage lending is likely to remain restricted for the rest of the year. However that could change if one of them decides to 'dip their toe' and the others may then follow suit. Difficult to say when it will happen for sure. Conversely, lower LTV,s are attracting some of the lowest interest rates in years and now is definitely the time to 'grab a bargain' in that respect (before they start to rise again). Interestingly, 75% of my clients at the moment are first time buyers thinking that now is the right time to enter the market....

dunroving

Thanks, interesting insight ... there seems to be a mismatch between the majority of prospective buyers (FTB's with small deposits) and the majority of decent available mortgages. I think that is what is stagnating the market at the moment. When I think of the mortagge terms I got 2 years ago, if I was looking to buy now, for the same monthly payment I could only afford a house about 65% the value of the one I have ... which won't buy you sh*t around here (I'm in a former council house).

cricket1again

My best friends in the UK are estate agents. They report as is....bargain hunters high, sales pathetic, mortgages.......a humble attempt to sort the wheat from the chaff. 'I'd rent. Property prices are not going up in a hurry in the the UK due to lack of demand.

ukintexas

Thanks for keeping interesting points going in this thread. I guess mortgage brokers will take a more positive (sales!) spin on the situation
I think renting is definitely the way forward for us should we ever get our heads around making the bloody decision as to whether to go back or not!
Thanks for your help, and I hope that anyone else looking at mortgages in the UK at the moment have got something from this post as well.