Getting A Mortgage - first time buyer

Cheers for all the advice.

we are wanting a mortgage where we can pay off more as we go. This isn't something we will do immediately but once we come into more money, we want that option available.

We would rather start with easily affordable payments now, over a slightly longer term. But then eventually begin to pay more off.
 
jakeplattinblue said:
Cheers for all the advice.

we are wanting a mortgage where we can pay off more as we go. This isn't something we will do immediately but once we come into more money, we want that option available.

We would rather start with easily affordable payments now, over a slightly longer term. But then eventually begin to pay more off.
Click to expand...
Spot on Jake.

When we took our mortgage out years ago rates were high, as they dropped we carried on paying the same rates, made life really easy towards the end of the mortgage, paid off a couple of years early.
 
jakeplattinblue said:
Cheers for all the advice.

we are wanting a mortgage where we can pay off more as we go. This isn't something we will do immediately but once we come into more money, we want that option available.

We would rather start with easily affordable payments now, over a slightly longer term. But then eventually begin to pay more off.
Click to expand...
Thats exactly what we have done mate. Extended term (30 years) on out first mortgage which meant it was more affordable (also the ability to overpay which we have also done with pay rises, reduced childcare costs etc). We have just re mortaged and brought the term down to 25 years on a 3 year fixed rate. Just make sure you check that you can overpay (no charges with overpaying) and also other charges do rack up. Definitely worth going through an independent financial advisor.
 
We took our mortgage out with HSBC over a 30 year term, because we put a decent chunk of money down we got a decent LTV and went with a tracker, there are no exit fees and no restrictions on overpayment, one thing they did try to do however was reduce the monthly payment rather than the term but they sorted it once I realised what they had done as i'd explicity asked them not to do this.

Our monthly is around 400 but we pay 800 and the beauty is I know if I can't afford to do it for whatever reason I just revert to the smaller payment. Same as if interest rates rocket, I will move to a fixed (possibly). One thing to ask when you go in is get a comparison between the fee free mortgages as well as what they try to sell you as we found there was very little difference whatsoever.

The other thing to remember is you will very likely not be with that same mortgage provider in a few years time anyway if you keep on top of it so don't get too hung up on thinking you are going to be paying xyz for 20/25/30 years. This is where the importance of exit fees and application fees etc come in.

In the 2.5 years we've had our mortgage we have knocked 2 years off the term already, we always planned to do it this way to free up money at a later date to extend the house once the LTV was even better. Good luck!
 
jakeplattinblue said:
Cheers for all the advice.

we are wanting a mortgage where we can pay off more as we go. This isn't something we will do immediately but once we come into more money, we want that option available.

We would rather start with easily affordable payments now, over a slightly longer term. But then eventually begin to pay more off.
Click to expand...
That's the best plan IMO. I bought my house in February and did something similar. Me and my missus had been renting together before that so had a lot of stuff already, but we've spent a bomb doing everything up and putting our own stamp on it.

You're better off opting for a longer term and overpaying anyway. If you imagine that you'd pay an extra £100 a month on a 25 year mortgage, that will only pay off an extra £50 or so of your mortgage, the rest will be interest. If you overpay £100 per month you're not being charged any interest on that so the money goes further for you!
 
jakeplattinblue said:
Cheers for all the advice.

we are wanting a mortgage where we can pay off more as we go. This isn't something we will do immediately but once we come into more money, we want that option available.

We would rather start with easily affordable payments now, over a slightly longer term. But then eventually begin to pay more off.
Click to expand...

I have been in real estate for almost 40 years and been an agent for over 10 of those and now run my own helper business and have been fortunate to accumulate a reasonable portfolio over that time.

For you own home and any second or third property you may invest in the future I can recommend interest only loans to you if available for the house you occupy as I have done all my life.

In Australia you cannot gear the home you live in so there is little point in paying off the loan so using the difference investing in other asset classes will ensure you have more money available to you when you are ready to discharge the mortgage.

Most owners make this mistake ( ie paying principal and interest ) presuming that the capital gain in the property over the term of the loan will be more than offset by the original amount borrowed.

The reality is unless you are in the back blocks of deepest darkest Cornwell far away from schools . transport and decent schools and infrastructure this won't happen.

If you can get an interest only loan , half fixed , half variable and intend to live in the home for at least 5 years not even that in some cases you will be well ahead.

You can even use some of the difference for nice things you and partner enjoy doing together and still have a bigger creation of wealth at the end of it all.

I estimate that over 40 years I am hundreds of thousands of dolllars better off and I am not that smart when it comes to wealth creation.
 
Another recommendation here for an independent broker who will find the best deal for you. Stick as much down as you can too. Lots of good advice so far.
 
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