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15 Oct 20, 04:24 AM |
#11
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Imagineer
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If it’s only just doable , I’m surprised she’s been able to get a mortgage. When she does the affordability checks it’s likely to flag up she can’t afford it
But that aside I would point out it’s a bad idea , I personally don’t think it’s ever a good idea to have a mortgage that’s only just affordable , what happens if she has a big expense one month ? |
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15 Oct 20, 06:25 AM |
#12
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Guest
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The prevalent view amongst economists is that we will be in a low interest environment for a very long time.
However I would be inclined to caution against taking on a mortgage that is only just doable. I am definitely not “tight” but I am risk averse and this sounds particularly risky to me. |
15 Oct 20, 07:47 AM |
#13
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Excited about Disney
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We have just locked ours to a three year deal at 1.69% as I’m concerned about the future but this way we can over pay and know our monthly payments so all good. Our old deal comes to an end in jan 2021 so was easy just to do it now .
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Super Ted DO WHAT YOU LIKE , LIKE WHAT YOU DO! |
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15 Oct 20, 09:00 AM |
#14
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Imagineer
Join Date: Sep 15
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I work in a bank and our mortgage advisor told us yesterday that rates are Likely to be in the up. Even if the country goes into negative interest, the rates we offer will rise. It’s also getting harder to get a mortgage at the moment. That’s just his opinion based on what he’s heard though.
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15 Oct 20, 10:40 AM |
#15
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Imagineer
Join Date: Mar 19
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As a first time buyer what I did was update my budgeting spreadsheet to go forward 2-3 years and looked at how I would cope if rates were to raise up to 6% which felt realistic at the time, I knew I was able to afford it because our childcare was coming to an end before our mortgage deal was up. As it happens rates actually decreased but it gave me peace of mind so I didn't have a heart attack when the Bank of England did rate announcements!
The other thing to remember is as you build equity your LTV changes and opens up more competitive products. That said it's a very uncertain time and we don't know what will happen with house prices and thus equity at the moment, and if she can only fix for 2 years I would be extremely apprehensive about buying and knowing you couldn't manage a rate increase, if she could fix for 5 years that would be better I think, and then do a future projection of her finances to 'stress test' and account for any potential savings in future etc. |
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