Gordon Offers £1,500 for First Time Buyers
Posted on 9 April 2008 by
We're still waiting on terms and conditions... but as ever with this, it’s unclear. For example, when I want to buy with my boyfriend, he's a First Time Buyer but I'm not, so will we be eligible?... I doubt it... I'll let you know.
So what could you do with your contribution of £1,500 from Uncle Gordon?
Arrangement fees: In the current mortgage market, the arrangement fees to subsidise a decent affordable interest rate, are between 1% and 2.5% of the loan amount. That's £1,600 - £4,000 for a £160,000 mortgage
or: Stamp: Whilst this effectively means that stamp duty is paid for, for those buying between £125,000 and £150,000, it doesn't even cover the stamp duty for anyone buying above that, which is a great many first time buyers in the South. This highlights what an opportunity to win the hearts of the nation, Gordon missed when announcing Stamp duty changes (or lack of them), in this year's budget. A much fairer stamp duty calculation can be found here http://www.charcol.co.uk/stamp-duty-petition/
or: Solicitor and survey: For a £160,000 purchase, a solicitor will be around £490. Stamp and Land tax return charge, about £88, the local searches, £250, and the telegraphic transfer fee £30. That's over £1,000. The homebuyers repost for a property of that size is around £550. Total: £1,550.
or: Higher Loan Charge: Borrowing more than 90% is still possible with a few lenders, but most of them will charge you a Higher Loan Charge, which is like their insurance policy in case they have to repossess and you have gone into negative equity. This has a complicated calculation, but works out as about 1.5%. You'd have to be buying at £100,000 for your £1,500 present from Uncle Gordon to cover this.
Pricey business this...
Categories: First time buyers
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