Reluctance to grant the full mortgage amount

[Ihavenojob]

Talking to our son about how much he had left to pay, he said he still had most of it to pay, so he may start overpaying. I asked how much was the mortgage, he said £109,700. I said that's an odd amount, he said he had asked for £110,000, but that was all they were prepared to pay, as they deemed the full amount too much of a risk.

 

[noseall]

Talking to our son about how much he had left to pay, he said he still had most of it to pay, so he may start overpaying. I asked how much was the mortgage, he said £109,700. I said that's an odd amount, he said he had asked for £110,000, but that was all they were prepared to pay, as they deemed the full amount too much of a risk.

It’s probably a numbers massager.

 

[Ivor Windybottom]

Talking to our son about how much he had left to pay, he said he still had most of it to pay, so he may start overpaying. I asked how much was the mortgage, he said £109,700. I said that's an odd amount, he said he had asked for £110,000, but that was all they were prepared to pay, as they deemed the full amount too much of a risk.

Do you know how much the house was? It may have been 90% or another percentage, you'd pay a higher interest rate if you borrow 90.0001% of its value.

Paying off more in the early years makes a gigantic difference, throw as much as possible at it. Or ideally just get an offset mortgage - that way you pay less interest as soon as you get paid each month.

 

[motorbiking]

Offsets are good if you have lumps coming in (bonuses, commissions etc) but if your income is steady it can work out a tiny bit more expensive and you risk the temptation to slow down and pay less.

 

[diy_fun_uk]

I fixed my own property on a 5 year, and two of my BTLs. Ridiculously low interest rates. Oh how I wish I'd fixed them all for 10, they're all coming off their fixed terms this year

 

[Ihavenojob]

Do you know how much the house was? It may have been 90% or another percentage, you'd pay a higher interest rate if you borrow 90.0001% of its value.

1 bed flat, purchase price was £220,000

 

[Trazor]

Over paying, if you can manage it, is one of the best things you will ever do.

 

[Ivor Windybottom]

Fixed rates can be a winner or a loser. The killer and hidden profit for them is often the ridiculous admin fees that you need to pay every time you renew.

We got an offset with a lifetime base rate tracker in 2005 at bank base rate +0.19%. We definitely didn't pay a premium for the offset, but things may differ now. Then the interest rate dropped, massively. We ended up paying 0.44%, so very glad we didn't fix. I think our required payment was about £80 a month, it was hilarious. We saved vast amounts in interest and paid it off about 10 years early. All effortless - if you spend less than you earn then it automatically pays it off with no admin or decision making involved. Now mortgage-free as a result.

At one point we bought new a car with it too, if you build up money in an offset then you can also borrow that back if you want, all at the mortgage rate.

 

[Ihavenojob]

The point I was trying to make is how ridiculous it was to say £110.000 is too much of a risk, but £300 less is OK. He had a 50% deposit, so they were not going to lose much.