House purchase and car PCP loan lease question? Best time?

[anonymous-user]

The initial message was deleted from this topic on 23 March 2021 at 09:35

[mattfuey]

I was told by the advisor we used, to avoid opening any new credit until after completion wherever possible.

[anonymous-user]

mattfuey said:

I was told by the advisor we used, to avoid opening any new credit until after completion wherever possible.

Thanks for the reply - looks like I will have to hire a car for the time being!

[Jamessd]

in my (albeit limited) experience its safe to Apply for further credit after the mortgage offer has been issued. The lenders I've used do not appear to have performed any further credit searches between offer and completion.

[Sarnie]

Jamessd said:

in my (albeit limited) experience its safe to Apply for further credit after the mortgage offer has been issued. The lenders I've used do not appear to have performed any further credit searches between offer and completion.

But your mortgage offer will state that should ANY of the conditions that the mortgage offer has been issued under change, Eg income or credit commitments, you need to inform the lender.

A lender has the right to withdraw or modify any mortgage offer at any point they see fit up until the funds are drawn down.

[Claudia Skies]

Have you maxed out the mortgage? You should have done, because it's the cheapest loan you're ever going to see!

[anonymous-user]

Claudia Skies said:

Have you maxed out the mortgage? You should have done, because it's the cheapest loan you're ever going to see!

No we haven't maxed out the mortgage.
Thank you for the replies everybody. We will wait for the house to be completed.

[mike9009]

Claudia Skies said:

Have you maxed out the mortgage? You should have done, because it's the cheapest loan you're ever going to see!

Only cheapest if you pay the capital off the mortgage over the same term as an equivalent loan (36/48 months). Paying for a car over 25 years is not cheap!

[Claudia Skies]

mike9009 said:

Only cheapest if you pay the capital off the mortgage over the same term as an equivalent loan (36/48 months). Paying for a car over 25 years is not cheap!

That's not right at all. 3% interest is always cheaper than 10% interest....

What's more, the car depreciates at the same rate however you buy it - and how are you going to fund the next car?

And anyway, if you want to repay the mortgage quicker you are always free to do so.

[Jobbo]

Claudia Skies said:

mike9009 said:

Only cheapest if you pay the capital off the mortgage over the same term as an equivalent loan (36/48 months). Paying for a car over 25 years is not cheap!

That's not right at all. 3% interest is always cheaper than 10% interest....

3% interest compounded over 25 years means you pay back 209% of the original sum borrowed. 10% interest compounded over 4 years means you pay back 146% of the original sum. As mike9009 says, it's only cheaper if you are comparing a similar term.

[Sarnie]

Claudia Skies said:

That's not right at all. 3% interest is always cheaper than 10% interest....

What's more, the car depreciates at the same rate however you buy it - and how are you going to fund the next car?

And anyway, if you want to repay the mortgage quicker you are always free to do so.

Where's Siddicks???

[mike9009]

Claudia Skies said:

mike9009 said:

Only cheapest if you pay the capital off the mortgage over the same term as an equivalent loan (36/48 months). Paying for a car over 25 years is not cheap!

That's not right at all. 3% interest is always cheaper than 10% interest....

What's more, the car depreciates at the same rate however you buy it - and how are you going to fund the next car?

And anyway, if you want to repay the mortgage quicker you are always free to do so.

Beg to differ. To borrow £20k at 7% over 36 months will cost £2161 in interest. To borrow £20k at 3% over 300 months (25 year mortgage term) will cost £8327 in interest.

Which is cheapest overall? It feels like 2005 again....

[Ari]

Sarnie said:

Where's Siddicks???

Quite!

[Claudia Skies]

mike9009 said:

To borrow £20k at 7% over 36 months will cost £2161 in interest. To borrow £20k at 3% over 300 months (25 year mortgage term) will cost £8327 in interest. Which is cheapest overall? It feels like 2005 again....

Your "cheaper" figures only work if you drive the same car for 25 years....

[mike9009]

Claudia Skies said:

mike9009 said:

To borrow £20k at 7% over 36 months will cost £2161 in interest. To borrow £20k at 3% over 300 months (25 year mortgage term) will cost £8327 in interest. Which is cheapest overall? It feels like 2005 again....

Your "cheaper" figures only work if you drive the same car for 25 years....

Wrong! You can sell the car but keep the debt (capital) on the mortgage, thus paying for the original car over 25 years if no overpayments are made on the mortgage. Then take out another loan for the next car (presumably part funded by the sale of the first car and part funded by more borrowing).

Downward spiral.......

[subirg]

Claudia Skies said:

Your "cheaper" figures only work if you drive the same car for 25 years....

Perhaps you should advise the Greeks?