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Equity out of the Home.


Ashz09

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7 hours ago, Ashz09 said:

They look to have good reviews that's for sure! I'm with Leeds Bank Society at the moment they are good so might try and stay with them to avoid fees of swapping Mortgages etc.

I could be wrong though a Broker is the best bet. Stressing me all out lol.

Always start with your original lender ... you get a base point, you have a record with them and the paperwork / evidence will be a lot easier. .. once you have a quote then look around but keep an eye on the add ons and extras.

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My golden rule has always been .. whatever you do with a home loan .. NEVER extend the term.

Lenders can make monthly costs sound affordable this way, but it hides the length of the shackles they have round you.

 

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Sith Happens
6 hours ago, McRamFan said:

Also bear in mind that there is a limit to how much value you can add to your home.

Very true.

I think its a common mistake people make. Spend £2000 on doors you wont add £2000 worth of value to the house. Likewise a bathroom.

The problem is whatever you do may not be someone elses taste anyway.

While you might add a little bit of value i think what you do sometimes is make your house easier to sell with cosmetic changes.

The only things that propely add value are extensions etc.

 

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You say you'll save £1000 on interest on some solar panels. Is that a loan you took out to get the solar panels? If so your best bet would be to make some over payments on the loan to get it paid off quicker rather than take a loan to pay a loan. Check the details of the loan to make sure there are no extra charges. Also my advice is to get your mortgage paid down as quickly as you can afford. 

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The good thing is banks wont let you do anything too dangerous now. A few years ago before the financial crisis banks were lending 125% mortgages at stupid * your salary/wage.

They are very much now geared towards affordability although extending your term is something they may suggest which as @jono says never do unless you absolutely have to.

Also make sure you get the projections for interest rate increases, i think they have to do this anyway but because the rates have been low for such a long time i think this is ignored by a lot of people....i'll deal with it when it happens approach. They WILL go up at some point.

I know its fag packet maths but i'd ask what the average rate has been over the past 25 years and think its going to be at least that over the term of your mortgage.

 

 

 

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I managed to find one of the better deals with the Bank. Is this an 'Ok' rate etc:-

RATE 1.80% For 25 months

SET-UP FEES: £35

MONTHLY PAYMENT £298 For 25 months.

Good thing is my wages have gone up a bit. I may need to pay off my Credit cards sooner rather then later though from the looks of things. Luckily I've been putting a lot of money into the Credit Cards to try and get them paid ASAP. Least I've got a good Credit Score!

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Factor in falling house prices (correction) and interest rates can only go in one direction, I reckon we shall have pressure on the government to clamp down on BTL and HMO's which is in the pipeline, flood of housing onto the market will also put downward pressure on prices.

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4 hours ago, Ashz09 said:

I managed to find one of the better deals with the Bank. Is this an 'Ok' rate etc:-

RATE 1.80% For 25 months

SET-UP FEES: £35

MONTHLY PAYMENT £298 For 25 months.

Good thing is my wages have gone up a bit. I may need to pay off my Credit cards sooner rather then later though from the looks of things. Luckily I've been putting a lot of money into the Credit Cards to try and get them paid ASAP. Least I've got a good Credit Score!

I assume it is for £7k?

If so £485.00 is a reasonable fee.

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10 hours ago, Ashz09 said:

I managed to find one of the better deals with the Bank. Is this an 'Ok' rate etc:-

RATE 1.80% For 25 months

SET-UP FEES: £35

MONTHLY PAYMENT £298 For 25 months.

Good thing is my wages have gone up a bit. I may need to pay off my Credit cards sooner rather then later though from the looks of things. Luckily I've been putting a lot of money into the Credit Cards to try and get them paid ASAP. Least I've got a good Credit Score!

Always, always, pay off the most expensive debt first which will almost certainly be the credit cards.

I wouldn't even consider remortgaging until I'd done that in your situation, your time would be better spent looking for a 0% card to transfer your existing debts to, some decent lengths of time available now, bear in mind the fee for switching though, normally between 2-4pc.

Set up a direct debit to pay off the total over the length of time the offer lasts if you can afford to, otherwise set up one for the minimum so you don't fall foul of the 0% terms and revert to expensive debt.

Either way, cut the card up the minute you receive it so you're not tempted to spend on it.

Moneysavingexpert.com is a good resource to use, as you're probably aware.

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Apologizes I've currently got a 0% Credit card for the next 1-2 years. I always switch before they run out. That was for the Mortgage probably should of stated that!

The quoted:-

RATE Of Mortgage: 1.80% For 25 months

SET-UP FEES of Mortgage: £35

MONTHLY PAYMENT of Mortgage £298 For 25 months.(Then the 25 Month Fixed rate runs out on my Mortgage).

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Increasing your mortgage - in order to spend on a house you then have less of a stake in - is absolutely bonkers.

solar panels won't add value. 

The bathroom will add bugger all.

you'd have been better off reducing your mortgage by 11k.

 

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2 hours ago, RamNut said:

Increasing your mortgage - in order to spend on a house you then have less of a stake in - is absolutely bonkers.

solar panels won't add value. 

The bathroom will add bugger all.

you'd have been better off reducing your mortgage by 11k.

 

Cheers for the Input I'll bare that in mind. The Solar Panels I was ripped off with hard. Wouldn't recommend them (Paying 90 for the next 5 years for them!)

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On 2017-5-3 at 18:32, Paul71 said:

Very true.

I think its a common mistake people make. Spend £2000 on doors you wont add £2000 worth of value to the house. Likewise a bathroom.

The problem is whatever you do may not be someone elses taste anyway.

While you might add a little bit of value i think what you do sometimes is make your house easier to sell with cosmetic changes.

The only things that propely add value are extensions etc.

 

There used to be a rule of thumb that extensions  (Inc conservatories ) add about 50p in the pound of cost to the value of your property. 

That was assuming that the property is in good nick and a sellable asset so you're not actually refurbishing. 

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If you've no intention of selling the house anytime soon, spend what you like where you like, as long as you can afford it.

I've spent over the purchase price of my property in the last 20 yrs on improvements, but then again I bought when prices bore some resemblance to incomes.

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  • 4 weeks later...

Well I just rang the Company and there offering 1.9% Mortgage. Sounds quite reasonable with no fee.

I'm confused though as I brought my house for around £83,000 (Was valued around £87,000) now worth £93,000 according to Zoopla.

They quoted it's worth £103,000 according to a Halifax Database (I'm with Leeds Bank) and that's the amount they'll use. That's a silly amount. I'm guessing it's a good thing that it's valued much more but doubt I'll ever sell it for that... 

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They will be generated by an algorithm based on the spec of your house and sales around you, I think the technical term for it would be guesstimate, sure they won't want to send round someone to do a proper valuation?

 

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4 minutes ago, Ashz09 said:

Well I just rang the Company and there offering 1.9% Mortgage. Sounds quite reasonable with no fee.

I'm confused though as I brought my house for around £83,000 (Was valued around £87,000) now worth £93,000 according to Zoopla.

They quoted it's worth £103,000 according to a Halifax Database (I'm with Leeds Bank) and that's the amount they'll use. That's a silly amount. I'm guessing it's a good thing that it's valued much more but doubt I'll ever sell it for that... 

If you have to sell (say owing to unforeseen circumstances) borrowing against the value of a property that has been over-valued could leave you in a difficult position. Akin to the old days of 110% mortgages!

I'd suggest you look at similar property prices in the area you live, or (lie) get a free valuation by pretending you're selling.

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24 minutes ago, Ashz09 said:

Well I just rang the Company and there offering 1.9% Mortgage. Sounds quite reasonable with no fee.

I'm confused though as I brought my house for around £83,000 (Was valued around £87,000) now worth £93,000 according to Zoopla.

They quoted it's worth £103,000 according to a Halifax Database (I'm with Leeds Bank) and that's the amount they'll use. That's a silly amount. I'm guessing it's a good thing that it's valued much more but doubt I'll ever sell it for that... 

Do not take Zoopla or any other estate agency website seriously, check the land registry which is independent.

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Is your house the same style and size as the rest of the houses in your postcode?

Most of these AI algorithms just take all the sales in yoru postcode, index link them to bring them up to the same date and apply an average. Takes no account of houses being different styles and sizes. Let alone one of them might have been a bombsite and one might have been immaculate

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