Ricky Okey of mortgage advisers Charcol answers questions about buying a property.
Peter Gent from Essex is retired and wants to buy a property in one of the Greek islands.
Should he get take out a British based mortgage or a euro mortgage on either his own house (which he owns and is worth £120,000) or the one he will buy.
Also, are there any serious pitfalls in buying a house in Greece?
If you need a mortgage on a property you are buying abroad, both the mortgage and property ideally need to be in the same currency.
Therefore if you are buying a property in Greece, the mortgage needs to be in euros.
This is to minimise currency risks, because the value of your property and your mortgage will both increase or decrease together.
Having said that, there are very few UK lenders who offer mortgages on foreign properties (quite a few English lenders don't even lend in Northern Ireland or Scotland).
In addition to this you need a minimum deposit of typically 25-30% and the purchase expenses are significantly higher than in the UK.
Then there are the legal implications of buying abroad, which can be vastly different to buying a UK property.
Ensuring you have an English-speaking lawyer is of paramount importance.
It is for these reasons that many people buying abroad prefer to release equity on a UK property if they can and purchase the foreign property in cash.
If you are unable to finance the purchase from funds raised on your UK property, you may wish to speak to a specialist on overseas mortgages.
One such specialist is Conti Financial Service, who should also be able to advise of the pitfalls, if any, on buying a property in Greece.
You can get further details by calling 01273 772 811 or at
Helen Tait wants some assistance on a fixed rate mortgage she has taken out with the Halifax.
It's fixed over two years but two months into the mortgage they have increased the amount without any prior notice.
She has complained and they said it was for some outstanding capital, but she thinks they are incorrect.
There is not enough information here to ascertain exactly why Halifax may have done this.
If Helen hasn't already done so, she should ask Halifax to clearly explain in writing why there was "outstanding capital" in the first place, why she was she not advised before it was added to her mortgage and why was she not given the choice of repaying this amount now rather than having it added.
She should also ask for details of their complaints procedure.
Once she has followed their complaint procedures, and if she is still not happy with their response, she is entitled to require Halifax to refer her complaint to an ombudsman or Mortgage Code Arbitration Scheme.
For further details, you can call 01785 218 200 or visit the
Louise Marshall from Devon wants to move her mortgage to a fixed rate one. Should she opt for a really long-term fixed rate? Are there any pitfalls?
My first question to Louise would be to ask if she is looking for a fixed rate because she is concerned about the expected increase in the Bank of England base rate over the next year.
If she is, she might want to bear in mind that current fixed rates, especially those fixed for three to five years or more, have already factored in a potential future base rate increase to at least 5% by the end of next year.
Louise is talking about long-term fixes, but unless the base rate rises to well over 5%, which seems unlikely at this point, buying a longer term fixed rate means that you run a serious risk of taking a deal that may never become "good value".
However, I do appreciate that for some borrowers, the stability of knowing exactly what their monthly payments will be over a certain period is very important.
One compromise could be a capped rate mortgage, which also offers an initial discount.
Although the initial discounted rate on these would be slightly higher than those offered on stand-alone discounts, borrowers would have the added security of knowing their rate (and therefore monthly payments) will never go above the level of the cap during the capped rate period.
One example is a deal we have with Bristol & West, which offers an initial discount in the first three years of 1.55% (giving a current rate of 4.24%), but is capped at 5.99% for the same period.
So as long as borrowers who take this deal have worked out that they can still afford their mortgage payments at 5.99%, they can rest assured that they take this deal knowing it will remain affordable even if rates increase in the future.
However borrowers should not disregard variable rate deals just because the monthly payment can fluctuate.
Even after taking into account the recent increase in the base rate, there are still many discount or tracker deals on offer with rates that are below 4%, or in some cases below 3.5%.
That compares with fixed rate mortgages currently on offer at rates between 5% and 5.5% for long term fixes from five to 25 years.
By working out how much your monthly payment would be should rates increase by, say, 2%, you would know if your payments were still affordable.
That way you would at least know if it is worth locking into a fix at today's high prices, or taking a punt on a discount or tracker that currently offers a much lower rate of interest.
You can work out what your payments might be by using the
Matt Thomas wants to buy a second home as an investment. Should he buy abroad or is it safer to invest in the UK?
Would the chance of a second home being let out to holidaymakers make it more profitable?
Matt should remember that although buying abroad is becoming more and more popular these days, in addition to the usual risks involved in buying an investment property, it has the added of risk of currency fluctuations.
When the time comes to sell the property, he could lose some of the value when it is converted into to sterling.
Whether it is likely to be more profitable than a buy-to-let in this country depends on the potential property appreciation value and how easy it will be to rent out.
With any buy-to-let, there can be void periods and prospective landlords are always advised to factor in at least two rental void periods out of any 12 months when their property could be vacant.
When buying a property as a holiday let, landlords run the risk of rental void periods over longer periods, depending on where the property is situated.
Is it in a location that is popular with tourists all year round? Or in a location that is only really popular during the key holiday season?
There are other factors to take into account such as legal and insurance implications, especially if the property is constantly let out to holidaymakers.
Also think about the management of the property. Who is going to prepare it for new guests before their arrival and deal with any problems or grumbles the holidaymakers may have?
You may need to think about hiring a manager and this will also add to your costs and potential profit.
As with any property investment, the area and potential attractiveness to future tenants of the property need to be thoroughly researched before deciding on a location.
Dave from Devon has a £200,000 house to sell and wants to take out a mortgage of £100,000 in order to buy a £300,000 house. He expects to work for another 16 years so would want a 15-year mortgage.
There's a possibility that he would have an inheritance anytime within the next 15 years which would pay off the mortgage. Which types of mortgage would you suggest?
I notice that Dave said there is the "possibility" of an inheritance. If this is the case then I would suggest Dave looks at shorter term deals, even if they lock him in during the initial discounted or fixed rate period.
If the inheritance does come along in the future he can take a view at the time as to whether it's worth paying the penalty to repay the mortgage there and then, or wait the short period before the penalty expires and repay the mortgage at that time.
If there comes a point when he knows for sure that he will receive an inheritance in the future, then Dave may want to look at deals that have no early redemption charges, leaving him free to repay the mortgage in full any time he likes.
In addition to this, and again if he knows for sure he is due an inheritance that will repay the mortgage in the future, he might want to convert the mortgage to an interest-only basis if he hasn't already done so he can keep the cost of the monthly payments to a minimum.
This means his monthly payments will only cover the monthly interest charged on the mortgage, but will not repay any of the capital.
This would mean that the full £100,000 would become payable once the mortgage has come to an end.
Sue Jones has a 10-year-old Standard Life endowment policy that she wants to sell (Standard Life has valued it at less than half the amount she has paid into it if she were to cash it in).
Can you suggest a company that might be interested in buying it and who will give her at least what she's put into it?
There is not enough information given here to say whether Sue should sell her policy on the secondhand endowment market so my suggestion to her is to discuss her options with an IFA, ensuring she takes all her correspondence with regards to her policy with her.
Anybody in Sue's position should look at all of their options with regards to their endowment shortfall before deciding on any one solution.
Selling the policy is not the only solution - for example, she could "pay up" the policy, if it is attached to a mortgage, maybe changing the type of mortgage so half is interest-only and half is repayment.
This ensures some of the capital is repaid to cover any shortfall etc.
Although in the past it was possible to get up to 30% more by selling your endowment policy, due to increasing popularity of this market and differing views of investors themselves, these returns are in no way guaranteed anymore.
There are about 20 companies on the secondhand endowment market and the IFA should provide information on some or all of them.
The Financial Services Authority (FSA) have published a factsheet to help people in Sue's position.
This can be obtained free on 0845 606 1234 or by visiting
Margaret Waters is a postgraduate student who has £8,000 of student loans - on which she can defer payments.
She has just started a job and her income is £29,000. She wants to buy her own place. Should she start saving for a deposit or start paying off her loans first?
Usually we would advise that it is preferable to pay off outstanding debt as soon as possible because the interest rates payable on loans and credit cards are typically higher than that received in savings accounts.
Margaret's situation is slightly different because student loans are typically charged at nominal rates of interest.
Margaret will not be able to defer payments indefinitely and certainly not for as long as it will take to save enough money to put down a sizeable deposit on a property and cover purchase costs, especially if she is starting from scratch with no other savings.
This is not to say that it is not worth starting to save as long as Margaret manages her expectations.
She also has to realise that any outstanding debt such as student loans, personal loans and credit cards will affect the amount she can borrow, because lenders will take outstanding balances into account before deciding how much they will lend her.
If Margaret is desperate to get on the property ladder sooner rather than later, she has other options that she can consider.
She could apply for a 100% mortgage that negates the need for a deposit, ask her parents to act as guarantors or take advantage of the number of specially designed mortgage schemes (Step Ladder, Rent a Room, Newcastle Family Offset).
These are the points that Margaret should bear in mind, and it is worth talking them through with a financial adviser.
Daniel Evans is looking to buy a property in Reading. He earns £32,000 a year but even with a £13,000 deposit he says he just can't afford to buy a decent home.
Will he ever get on the property ladder or will he be renting forever?
Although Daniel thinks that he will never get on the property ladder, there is still hope!
We can see where his predicament lies as Reading is currently an expensive area to buy property.
In fact the average flat in Reading during the third quarter of the year was £135,930, which is a little out of Daniel's range.
But there are other things that Daniel should consider when continuing the search for a property.
Most lenders are willing to lend based on 3.25 or 3.5 times salary. This would bring Daniel's maximum borrowing up to about £112,000.
There are some other lenders, such as Woolwich and Nationwide, who will consider borrowers for up to four times their sole income, and others who will even consider lending more.
Borrowing four times may bring him to the level that he requires based on the average price for a flat in Reading.
Of course, the higher the income multiple offered, the more stringent the criteria the borrower needs to meet in terms of their credit record, employment and address history, minimum salary and how they run their bank account.
Contrary to popular belief, lenders are not just giving money away willy nilly and they will not knowingly lend to a borrower at a higher income multiple if they do not think the borrower can afford the mortgage.
The onus is also on Daniel to be completely honest with himself as to whether he can comfortably afford the mortgage payments.
He should not let his desire to get on the property ladder cloud his judgement in any way.
It is also worth remembering that a lot of lenders are only Mortgage Indemnity Guarantee (MIG) free up to 90% and so Daniel would be liable for the rest.
Among lenders that do offer good MIG-free deals are Nationwide and Mortgage Express.
MIG is a one-off charge made on mortgages that are high in proportion to the value of the property.
It is to protect the lender should the borrower default on the mortgage in the future, it is of no benefit to the borrower whatsoever.
However, on a 95% mortgage a MIG premium can be equivalent to adding an extra 1.6% to the cost of the loan.
Daniel could also consider buying with friends or he could try and seek help from his family if they are willing. They could either act as a guarantor on a mortgage or contribute to the deposit.
Irene McLoughlin from Hampshire is a single parent with only £28,500 left on her repayment mortgage with Alliance & Leicester who are charging 5.54%.
She wants to know where she can get a get a better deal especially since she wants to repay in the next seven years?
The first thing that Irene should be aware of is that Alliance & Leicester increased their rates recently and so her payrate now would be 5.79%, which is rather high considering how long she has left to pay.
On most of their deals they also calculate interest annually and on a mortgage with such little left to pay, this will waste money.
Although Alliance & Leicester would offer her new business rates on a new mortgage, they would also charge you extra fees including an arrangement fee. This may make a new deal with them a little uneconomical.
Therefore although she will have to pay a small exit fee (about £85) it is worth redeeming this mortgage.
The best new deal to look for would be one with no fees. With such a small mortgage amount and short length of time to pay it back, any small fee could add up to 1% of your remortgage costs - not great value.
The main thing you should consider is to pick a mortgage that calculates interest daily. Don't just look for the cheapest headline rate; make sure you look at the other parts of the deal as well.
Ben Clarke from Kent is a first-time buyer. He wants £120,000 for a flat and needs a 95% mortgage but his credit rating isn't very good.
The best rate he has been offered is 7.1% with a two-year lock-in. Should he take it?
A bad credit rating does not necessarily mean that borrowers are doomed to sub-prime mortgages charged at extortionate rates of interest with hefty lock-ins.
More and more High Street lenders have become sympathetic to borrowers with a less than perfect credit record.
My first tip to Ben is that he should not automatically seek advice from specialist lenders and brokers in the sub-prime market, but speak to an independent mortgage broker or financial adviser who has access to the entire mortgage market.
Lenders such as Chelsea Building Society and Bristol & West may both consider lending to Ben, as would Birmingham Midshires, who also offer sub-prime lending at reasonable rates of interest.
Although Ben states that he has a bad credit rating, the fact that he has been offered a 95% mortgage suggests that his rating may not be as dreadful as he thinks.
Many sub-prime lenders would not even consider lending this amount and so his finances cannot be as bad as first thought.
From what Ben says he has been offered a one-year discounted mortgage with a two-year lock-in. This means that although he would have an initial payrate of 7.1%, this could rise to as much as 10%.
Ben needs to consider whether he could afford a rate as high as this.
In effect, Ben is paying double the rate that he would pay if he had the pick of the ordinary mortgage market. Is it really worth taking this rate?
If Ben gave himself six months to improve and stabilise his credit score, then it is likely that he could have a better choice of lenders and deals.
He should aim to pay off any county court judgements or other debts and look to increase his deposit. Within a year, he should have enough to get a much better deal then he is currently offered.
Mrs Reid is interested in equity release schemes but is confused at the different information that is given out. Where can she go to get independent advice about it?
I can appreciate Mrs Reid's predicament. Equity release mortgages (or lifetime mortgages as they will be known once mortgage regulation comes into force next year) can seem confusing and daunting.
The Council of Mortgage Lenders have produced a guide on equity release for consumers. You can order a copy by calling 0207 440 2255 or get one by clicking on publications and information and then consumer information at their website,
It is strongly recommended that you speak to a reputable, fully independent, financial adviser before making any decisions.
To find one local to your area, contact IFAP (IFA promotions) either by calling them on 0800 085 3250 or logging on to
One final thought; anybody considering equity release mortgages should also seek legal advice, as their ultimate decision not only affects them but their whole family, too.
Tony Richmond has a capped mortgage on his property which he currently rents out. He would like to get another cheap mortgage when it comes to the end of the fixed rate. Does he have to go for a buy-to-let mortgage?
If Tony originally took out his mortgage while he was still living in the property he should have got his lender's permission before he let it out.
Lenders will have differing views on this; all that may happen is a slight increase in his interest rate, or an extra admin charge to change the type of mortgage.
But ultimately, if he has not advised his lender he should do so immediately.
There are also insurance implications now that he rents out his property so he should also advise his buildings and contents insurer of his property's change of status. Honesty is always the best policy.
When the time comes to remortgage, he will certainly have to apply for a buy-to-let mortgage.
The opinions expressed are Ricky's, not the programme's. The answers are not intended to be definitive and should be used for guidance only. Always seek professional advice for your own particular situation.