Timing things to get a rishi mortgage deal.

[QueenOfPain]

Hi all,

I’ve made an offer on a house of £202k, it’s up for £210 but I’m a FTB living in rented.

The vendor has kept me waiting a week for an answer while his other viewings went ahead (reluctantly agreed to this). Now there’s another three viewings booked for tomorrow. The estate agent has told the vendor today that it’s not fair to keep me hanging any longer and asked him for a figure that he’d take from me to take the property off the market and stop the viewings. He’s asked for £3k more than I have offered, so £205k. The vendor insists on speaking to the EA’s valuer about every offer and has already turned down lots of offers, but I assume the reason he’s spent so long deliberating on mine is because I’m in a preferable position to all of the other would-be buyers. The property is unoccupied at present as the vendor had been letting it out so he’s currently losing money. Market moving incredibly quickly here at present, well priced and well presented properties are gone in 24 hours, yet this has been on the market since the end of December.

Now at the minute with 15% mortgage deals I’d need to produce a deposit of £31k or thereabouts which is going to be a real stretch.

I have £26k and that would more than cover a 10% or 5% mortgage deal leaving me money to spend on the work that needs doing (mainly decorative/flooring at this time).

Do you think if I agree to his extra £3k today, that by the time the survey etc has all been done, that the timing will be right for me to get one of rishi’s deals so that I don’t need to be stressing about finding this extra £5k from somewhere (or just withdrawing my offer)?

I’ve never done this before so I’m not sure if the timings of everything and at what point I actually need to apply for the mortgage or provide proof of deposit. I assume this sale would go through fairly quickly as there’s no chain on either end.

Thanks in advance!

This is a beautiful 1930’s detached house on a wonderful street with lots of very expensive houses. But it’s only three beds, hasn’t had any of the extension work done that all of it’s very expensive fancy neighbours have had, and the inside is very grubby and unloved (I don’t think his last tenant will have for their deposit back, let’s just say that) and it will need a new kitchen and bathroom (at some point) as well as flooring throughout and textured paper stripped off absolutely every room (potentially uncovering plastering issues).

Your bank might be best placed to advise... a glance online seems to suggest that some banks will start offering them “during April”, but nothing more specific.

It probably also depends on your estate agents, the last time we made an offer (two years ago), we had to send proof of our mortgage offer and where our deposit was coming from the week after the offer was accepted, but it was the first time I’ve been involved in buying so I don’t know if that’s normal!

Can you see a broker to see whether you can get a 10% deal now? 5% is obviously more attractive in terms of leaving you more cash for the short term but the rates aren't likely to be as competitive as the 10% deals and might not be best advice for you long term?

I’ve already got a broker involved at the minute, and they’ve said they’re struggling to secure 10% for anyone unless they’ve got a 999 credit rating. Mine is good but not excellent.

If you go for these highly leveraged mortgage product, try to lock the rate for 5y+ so you can save more equity to cushion any potential negative equity ahead of deal expiry.

Yes, will definitely be looking for a five year fixed deal and intend to overpay as much as possible.

Went for a second viewing today and agreed they extra he’s asked for. He’s accepted it and the EA has cancelled all the other viewings.

So lots of ringing round for me on Monday to find a conveyancing solicitor and a surveyor!

Congratulations @QueenOfPain fingers crossed for a stress free and smooth buy

Bear in mind the interest rate is likely to be much higher on these mortgages.

I always prefer a tracker mortgage.

@LockdownIsDragging

Yes, kind of expecting that and if it’s just too much higher then I’ll revert to original plan A and scrape the money together or ask my Dad for a bit more. It’s not the end of the world.