Slippery property ladder
Advice on how to get a mortgage in today's tough financial climate.
My advice to first time buyers? Rent."
Having taken his first steps onto the property ladder, 28-year-old Duncan Woods believes he bought at just the right time "before it all got messy".
He completed on his Northampton property in January but said he would
probably still be in rented accommodation if he held off any longer.
The mortgage market has changed so rapidly in the last few months that it is increasingly difficult for first time buyers to get a foothold and offers are changing daily for people remortgaging.
Like many young people, Duncan had to rely on his parents to afford a
mortgage on his two-bedroom terrace in Abington, on which he pays 625 a
month.
"I had a 20 per cent deposit as otherwise my monthly repayments would
have been unaffordable. It is very confusing. I talked to a lot of people and a mortgage advisor before I did anything. I am on a fixed rate for five years but after that, god knows what will happen.
"My advice to others would be not to get a mortgage. It is the wrong time, wait to see how the market does."
And it is increasingly difficult for people to get a new mortgage, with the numbers approved reaching the lowest monthly rate since September 1997. The British Bankers' Association said there were just 35,417 new mortgages approved in March, 18 per cent lower than February and 46 per cent down on March 2007.
Putting down a large deposit may be the only way for first time buyers to even get a property in the current climate, with all the big lenders withdrawing their 100 per cent mortgages.
The trend has gone back 10 years, when people had to save for a deposit rather than thinking it was their right to have a mortgage.
According to Northampton-based R S Financial Services, the best rates are for 75 per cent mortgages, meaning people need to have 25 per cent up front.
A mortgage advisor from the Queen's Park practice said: "The larger the
deposit, the more choice of mortgages there are and the better the rates."
It is also increasingly important to have a clean record in terms of debt because if, for example, you have deferred on a car loan repayment, a mortgage lender could be unwilling to lend to you. Recent debts are the most dangerous and it is better to have none.
As for people coming off a fixed rate who are wanting to remortgage, there is a whole other minefield of obstacles.
Rates are most likely to have gone up and deals are changing daily, making it difficult to know when to act.
R S Financial Services advise mortgage holders to act quickly and be informed.
"The rates are moving so fast. We just got two emails in today showing two rates were changing at 5pm and that only came in five hours ago. People need to keep an eye on the market," said their
mortgage advisor.
"They need to be looking eight weeks before their mortgage is due. It is very dangerous to hold off until the last minute.
"People also need to think how long they will be in a property for. Two, three and five year mortgages are fairly similar now so if you are going to stay in a property for a long time it may be better
to go for a five year rate."
Number 1: We'll save you pounds on... Plumbing
Plumbing can run up a big bill, with high call out charges, but there
is an easier way. DIY can be a daunting prospect but it is a good way to save money.
For example, for loose bathroom taps that move about in the basin hole, all you need to buy is two plastic top hat connectors.
These are small plastic connectors that fit under the basin and locate between the tap and the nut which secures the tap to the
basin.
They cost 30p each and you will need a tap spanner which is designed for the job.
Another common problem is a leaking overflow pipe, which can be solved for as little as 7.
Turn off the water at the stopcock that feeds the ballvalve on the loft
tank, remove the ballvalve with a spanner. You will require two spanners, one to hold onto the body of the valve and one to turn the nut on the pipe connection.
Take the ballvalve down to your plumbing merchant such as Northampton City Plumbing Supplies in Harvey Reeves Road, St James, and they will give the appropriate match.
There is plenty advice for novice plumbers through various websites. Try www.moneysavingexpert.com/utilities/diy-plumbing
A POTENTIAL SAVING OF BETWEEN 73 AND 135
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Thursday 24 May 2012
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