GREG 1
Member
Registered: 28th Jul 00
Location: Essex
User status: Offline
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I was looking at mortgages lastnight but wanted a little bit of help.
Now I have a deposit and will be looking at getting a mortgage of £115,000 ish (maybe 5 more) but whats the best thing to do with regards to the deposit.
Do I get the mortgage smaller or do I get the mortgage bigger and tell them I have a deposit of X amount? or does it not matter?
Also what would you expect to pay back on a mortgage of £115k
Cheers
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Ian
Site Administrator
Registered: 28th Aug 99
Location: Liverpool
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Generally you'll get a better deal if you borrow below a lenders LTV (loan to value) threshold. If you look at the deals a lender is offering, normally for any given package there will be various rates based on LTV.
LTV is basically the percentage of the property value that you are borrowing.
For example house costing £100k for round figures.
If you have £10k down and borrown £90k then you are at 90% LTV.
If you have £20k down and borrown £80k then you are at 80%.
Without knowing how much your house is up at I can't work out your LTV. Just do:
(house price / amount borrowed) * 100 to find it.
If its coming out that your LTV is for example 88% but the lender threshold is 90% then you could potentially borrow more and put down less, and have cash in your hand for furniture etc. without getting a worse mortgage deal.
You would of course having borrowed more need to pay back more as the compound interest on the larger amount will add up to a lot more over time.
Another approach would be to mortgage as little as possible based on your biggest possible deposit, then borrow on personal loans for furniture and start-up costs. This will mean your outgoings are a lot larger in the first 3-4 years depending how long you take the loans over but this approach means lower interest fees as your debt won't last as long.
Depends where you want to be really.
If you want accurate figures on repayment, find a package that suits you and use a mortgage calculator to work it out. The BBC have a nice simple one if you search for it.
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Ally
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Registered: 2nd Jul 03
Location: Pontypool Drives: a Skoda
User status: Offline
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Smaller the mortgage, bigger the deposit the better rate you get
Smaller the LTV (% of the property that you need to borrow) the better the rate
use the bbc's mortgage calculator for mortgages amounts (check useful links thread)
Use a 5.5 - 6% rate as the bank of england base rate has gone up again
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Ally
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Registered: 2nd Jul 03
Location: Pontypool Drives: a Skoda
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dam you ian i spent ages typing mine and u go and show me up  
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GREG 1
Member
Registered: 28th Jul 00
Location: Essex
User status: Offline
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Cheers guys
I have 20k to put down and the house is worth £135,000
I wasnt sure if to say I want a mortgage for £115,000 or say £135,000 BUT i have a £20,000 deposit.
Cheers
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Russ
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Registered: 14th Mar 04
Location: Armchair
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mortgage as little as possible. yes you may have to save a little longer for decorating, but worth it big time
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Ecosse Sport
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Registered: 5th Jun 02
User status: Offline
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quote:
Originally posted by Ian
Without knowing how much your house is up at I can't work out your LTV. Just do:
(house price / amount borrowed) * 100 to find it.
Its the other way round. Amount borrowed / house price * 100= LTV
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Ian
Site Administrator
Registered: 28th Aug 99
Location: Liverpool
User status: Offline
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Yes of course, sorry!
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James
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Registered: 1st Jun 02
Location: Surrey
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quote:
Originally posted by Ian
Yes of course, sorry!
 Ian in mistake making shocker 
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Ian
Site Administrator
Registered: 28th Aug 99
Location: Liverpool
User status: Offline
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Most of the time I edit them fast enough 
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