Mortgage Advise for HSMP holder?

Deal Score0

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.
Calculations:
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.

Kind regards
Schofield

1 Comment
  1. Reply
    Killer Queen
    April 30, 2011 at 12:18 am

    It almost always better to buy than it is to rent. One thing you need to do immediately is to start saving for emergencies. What if you became ill or were injured? You need some back up money.

    Stay away from Countrywide. Even though they are revamping, they have faced a lot of trouble. Not a good option right now.

    Take the higher interest rate and pay all of your bills on time. Then refinance for a lower interest rate when your credit score goes up.

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