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ravedave

Potential Cash Buyer

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Hi,

Now that my personal circumstances have taken an upturn, I'm now willing to give property ownership another lash. I'm in a fortunate position whereby I can buy the property in my desired area for cash.

However, I've been wondering if this is a wise move and sensible usage of the money.

I would still have a sufficient buffer if I did go down this road.

However, I did notice another thread on the main forum here were someone in a similar situation was given an option of taking out an offset mortgage and putting the equivalent amount into the associated savings account to in effect get a 0% mortage (I think that is correct recollection). This would still allow the cash to be ready for a disaster if necessary as the assets would be in near cash as opposed to bricks & mortar.

Do banks accept 100% against the mortgage? I know Danske require a minimum purchase price in excess of £200kish - way beyond where I'm looking.

Are there any other options to consider which would make better use of my current cash?

I know I'll need to go to an IFA some time, but I want to get some preparation done prior to going there.

Mod: I posted here because I read this forum most and recognise/follow the contributors. However, if you feel it would be better placed in the "All about buying, selling and mortgages" subforum then feel free to move it.

Thanks.

Edited by ravedave

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Well you can take an offset mortgage at a sensible LTV to get a reasonable rate - not sure what the limitations their will be, being a self build. But once you have an offset mortgage there isn't a limit on how much you can offset as far as I am aware, you can offset 100% from day 1, if you have the capital to hand.

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First Direct 65% repayment tracker mortgage = 1.99% (0.5% base + 1,.49%)

Zopa/Rate setter = 3.5% to 5%

That's what we are doing at the moment. no point overpaying the mortgage so we bought 50% of our house and stuck the excess cash and our savings into Zopa. If shtf we can still cover ourselves as Zopa funds are repaid monthly and we would halt reinvestment into lending.

To be fair since interest rates are so low there is very little margin of about 1% in it, so you might find an offset mortgage to be better.

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You can always take out a fixed 10 year mortgage at the very low rates available just now for say 50% of the house value. Put the rest in a safe place like NS&I income bonds and it is readily available to move around if another investment comes up. I wouldn't put all my eggs in one basket. Currently mortgage rates are just above real inflation.

If for some reason you had to move house quickly then you have more than enough for another deposit. Never tie up all your capital

You can always buy the house outright and get it mortgaged later if you need money.

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If for some reason you had to move house quickly then you have more than enough for another deposit. Never tie up all your capital

This is what I'm trying to avoid. However, I think that I'd have around £75k left over if I go for a £150k property and either put £150k into an offset or put down a deposit of £50 and offsret £100k.

I'm in a verty fortunate position at the minute and I want to make the most as I feel that this is a one time only position.

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This is what I'm trying to avoid. However, I think that I'd have around £75k left over if I go for a £150k property and either put £150k into an offset or put down a deposit of £50 and offsret £100k.

I'm in a verty fortunate position at the minute and I want to make the most as I feel that this is a one time only position.

I can personally recommend an Offset, First rate direct or Barclays seem quite good - Barclays currently offering 1.99% +BBR lifetime.

You can link up to 7 accounts with some banks, ISAs, saving accounts etc so as your capital repayment amount comes down you can delink accounts and keep the tax free savings allowance.

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I can personally recommend an Offset, First rate direct or Barclays seem quite good - Barclays currently offering 1.99% +BBR lifetime.

You can link up to 7 accounts with some banks, ISAs, saving accounts etc so as your capital repayment amount comes down you can delink accounts and keep the tax free savings allowance.

First direct have a really good offset. One thing to note, they now have a minimum salary requirement of 50k for single and 50k plus 25k minimum for joint.

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First direct have a really good offset. One thing to note, they now have a minimum salary requirement of 50k for single and 50k plus 25k minimum for joint.

Yes, good rates but disadvantage of FRD is that it all operates from one account - whilst other providers will allow you to link several of their accounts.

This could be more advantageous to someone such as ravedave who has savings and will want to maximise the longer term tax free benefits of these accounts.

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Yes, good rates but disadvantage of FRD is that it all operates from one account - whilst other providers will allow you to link several of their accounts.

This could be more advantageous to someone such as ravedave who has savings and will want to maximise the longer term tax free benefits of these accounts.

Very true, I can see the advantages with Barclays. I only have experience with FD/HSBC, great customer service.

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How do I go about finding a good IFA to get some professional help on this? Am I correct in thinking that it would cost a lot to get them to set up some sort of plan for my finances?

Outside of savings accounts (which have a poor return) I know too little to start dabbling in Stocks & Shares and other types of investments.

Thanks.

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How do I go about finding a good IFA to get some professional help on this? Am I correct in thinking that it would cost a lot to get them to set up some sort of plan for my finances?

Outside of savings accounts (which have a poor return) I know too little to start dabbling in Stocks & Shares and other types of investments.

Thanks.

You'll have to pay for advice but in the meantime do 2 things. Joint the motley fool boards and post a few questions. You'll get some good advice there. You don't want to go into a meeting with a IFA "blind".

Try and maximise your cash savings rates. If you can meet the criteria open a couple of santander 123 accounts. You'll get 3% gross on 20k in each account. Costs a couple of quid but you'll get the money back through direct debit cash back.

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