Mortgage Advise for HSMP holder?
I am getting into 25% shared ownership property; I have 8 months remaining on my permit.
Basically I applied through countrywide Mortgages for £50K loan to HALIFAX, they approved it first then I did all the valuation, insurance and housing association procedures. After two weeks they came back to me that they are stopping my application. I appealed & found that condition is 27 months left on your permit (and fair credit score & rating) to get a mortgage. Now Woolwich, Abbey, and other building societies have same rules.
That means when I renew my permit after 8 months (for 3 years) I will have 9 months to find a property, gather all the monies and apply for a mortgage. So If I don’t do that I can’t own a property for another 3 years.
The only reason I am writing this post today is I found a lender who is willing to take risk on me at a higher interest rate of 12.75% with 5% deposit. Now what I am planning is I know the interest rate is not acceptable its way to high, but I have found the perfect place, its a 2bed apartment, I am single will rent the other room to my mates who will pay me a almost £700 as rent.
Now I am taking this expensive mortgage on one condition that I should be able to re-mortgage it after I renew my permit. This way I will be able to get this place which is at fantastic location 5 mins to High street, 12 mins to Piccadilly line, 4 mins to BR Station.
Coz If I rent another place, I will end up paying £500/month & I won’t own it. This way I will stretch myself a bit for a year then once I re-mortgage it the payments will go down by £200/month.
Property Value: £195,000
25% £195,000 = £48,750
Minus 5% deposit i.e £2450
So the mortgage will be for = £46,300
I will try & minimise my repayment to be £500/month
Rent on 75% is £305.00/month
Council Tax = £100/month
Bills – £100/month
Service Charge – £50/month
Insurances & other – £50/month
TOTAL = 1105/Month
Thank you very much for reading my calculations & problem, All I want is advise if I am doing it right, am I being getting into something I will regret later about these lenders they are very good in changing their terms & conditions. But also housing association does not allow deals with each and every lender so should I take it that it would be fine, or any suggestions where it might go wrong.
I would really be very thankful for your comments
All the best in what you looking for.