Mortgage Advice

41
Found 25th Mar 2009
Afternoon All,

I am looking into getting a mortgage as first time buyer. But i am worried that my credit history and rating will stop me getting a mortgage! I have credit score of 787 because when i was at uni i had an overdraft and credit card which i never kept up to date with. I have just completed paying both of and now have no debt or outstanding payments.

Will this play a major part on whether i will or wont get a mortgage? What other factors will be taken into account when deciding my application?

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41 Comments

Deposit. Income.

Go into a building society & ask - tell them you are thinking of buying a property, & ask them what mortgage, if any, they could offer you & up to how much. Tell them that you don't want the mortgage right now, you just want to be sensible when you go house-hunting.

We did this before we went house hunting so that we knew which houses we could afford & therefore which ones to look at buying.

Supermod

787 isnt a bad score to be honest. It ranges from 0-999.
You only get good credit if you have borrowed money in the past. The best way to get the best mortgage is to save up a nice deposit or try and borrow it from family etc which isnt always possible.
The LTV is a crucial factor in getting a mortgage.

Your 'score' in this context meaningless. Every lender has their own mathematical formula. Usual criteria too long to list. All the obvious stuff that would occur to you is included. Listing little help as you cant do much about this base information. Rectifying bad credit history will of course be judged better than not rectifying, but yes it will still be judged negatively.

Original Poster

Marina;4734622

Deposit. Income.



well, we are looking into one of these new build properties 75% shared equity and they pay 5% deposit for you!

My income is around £30k, although i have been self-employed for the last year and a bit. But my current place are offering me a perm job which i have verbally agreed!

Depends how far your bank and credit card went with you "not keeping up to date"
If they just put you down as a few late payments then the fact you have now paid it
off counts in your favour.
Speak to your bank and ask them what mortgage they can offer you.
Get yourself a free credit history file before if you like, see what it says for yourself
Experian offer it free.......

EDIT just noticed that you are/were self employed, most banks will want 2 years books
although the bank you bank with can be more flexible as they have seen the money coming in.........

Original Poster

magicjay1986;4734649

787 isnt a bad score to be honest. It ranges from 0-999. You only get … 787 isnt a bad score to be honest. It ranges from 0-999. You only get good credit if you have borrowed money in the past. The best way to get the best mortgage is to save up a nice deposit or try and borrow it from family etc which isnt always possible. The LTV is a crucial factor in getting a mortgage.



LTV??? sorry for sounding a bit dumb....

Original Poster

simon012;4734678

Depends how far your bank and credit card went with you "not keeping up … Depends how far your bank and credit card went with you "not keeping up to date"If they just put you down as a few late payments then the fact you have now paid itoff counts in your favour.Speak to your bank and ask them what mortgage they can offer you.Get yourself a free credit history file before if you like, see what it says for yourself



well its not good, for the overdraft they set my account to default and it sent on to debt collectors so to speak. Who i setup a agreement plan with. And with credit card its just been a quite a few late payments! But not its all been cleared!

Abz;4734667

well, we are looking into one of these new build properties 75% shared … well, we are looking into one of these new build properties 75% shared equity and they pay 5% deposit for you! My income is around £30k, although i have been self-employed for the last year and a bit. But my current place are offering me a perm job which i have verbally agreed!


Think you should be ok. Shop around for best deals and make appointments with a couple of them. That should give you a better picture.

EDIT: LTV is Loan to Value i.e. How much mortgage loan you need with respect to value of the house. If you have a good deposit, you should be ok.

Original Poster

Marina;4734719

Think you should be ok. Shop around for best deals and make appointments … Think you should be ok. Shop around for best deals and make appointments with a couple of them. That should give you a better picture.EDIT: LTV is Loan to Value i.e. How much mortgage loan you need with respect to value of the house. If you have a good deposit, you should be ok.



I dont have much of a deposit to be honest. Hence i was looking at the new builds who pay 5% deposit! I really want to make sure i am in a good situation before applying for a mortgage cause i know if i get rejected then that effects my credit rating as well!

Supermod

Abz;4734735

I dont have much of a deposit to be honest. Hence i was looking at the … I dont have much of a deposit to be honest. Hence i was looking at the new builds who pay 5% deposit! I really want to make sure i am in a good situation before applying for a mortgage cause i know if i get rejected then that effects my credit rating as well!



The best thing to do is approach local developers who are looking to sell of their unwanted "stock". The chances are that they would, as you have said, be willing to pay some amount to you but you will need to make sure that this is a deposit as opposed to an incentive (as the incentive would be paid to you after completion and to secure the mortgage you would need to be able to show you have the funds available).

Abz;4734688

LTV??? sorry for sounding a bit dumb....


Oh hun we have all been there.....your credit score is good whats ur income?

Original Poster

magicjay1986;4734755

The best thing to do is approach local developers who are looking to sell … The best thing to do is approach local developers who are looking to sell of their unwanted "stock". The chances are that they would, as you have said, be willing to pay some amount to you but you will need to make sure that this is a deposit as opposed to an incentive (as the incentive would be paid to you after completion and to secure the mortgage you would need to be able to show you have the funds available).



Well the booklets that i have read about the development and from what the representative has said is that they will pay 5% deposit! So I'm assuming deposit is what they mean and not incentive!

Original Poster

gemmyw;4734776

Oh hun we have all been there.....your credit score is good whats ur … Oh hun we have all been there.....your credit score is good whats ur income?




Like i mentioned previously my income is £30k (not including anything my wife has earnt over the last year as well) it will be around £36k including my wifes. Although she graduates this year and will then be earing about £20k!

But i have been self employed for the last year and my companies gross income was around £40k before any expenses etc

Banned

Can be a bit more difficult to get mortgage when self employed. Your prob best to get in touch with a mortgage broker to see what options are and how much deposit you'll need and how much you can borrow

Abz;4734807

Like i mentioned previously my income is £30k (not including anything my … Like i mentioned previously my income is £30k (not including anything my wife has earnt over the last year as well) it will be around £36k including my wifes. Although she graduates this year and will then be earing about £20k!But i have been self employed for the last year and my companies gross income was around £40k before any expenses etc


Could you wait till your wife graduates and takes full time employment? You'd be in a better position. Although your income seems good. A mortgage advisor will tell you how much deposit will give you a good chance.

Original Poster

Paddy Charlie;4734846

Can be a bit more difficult to get mortgage when self employed. Your prob … Can be a bit more difficult to get mortgage when self employed. Your prob best to get in touch with a mortgage broker to see what options are and how much deposit you'll need and how much you can borrow



This is what people have said that it is alot more difficult to get a mortgage when self employed, So this is why I am waiting for my current job to become Perm (hopefully within a few weeks) and then apply for a mortgage. But in between I just want to sort out any little issues (such as credit history) and anythin else that may effect my chances of getting the mortgage i need!

Original Poster

Marina;4734875

Could you wait till your wife graduates and takes full time employment? … Could you wait till your wife graduates and takes full time employment? You'd be in a better position. Although your income seems good. A mortgage advisor will tell you how much deposit will give you a good chance.



I could wait. But its one of those situations where you've seen the perfect house at a good price/deal and you dont want to lose out! I'd be willing to struggle financially for a few months if it meant getting our dream house

Banned

Have you done the free trial on experian.co.uk?

You can make sure all the details they have are correct as I had a low credit rating score because of a mistake on my history and managed to fix it using that

Original Poster

Paddy Charlie;4734907

Have you done the free trial on experian.co.uk?You can make sure all the … Have you done the free trial on experian.co.uk?You can make sure all the details they have are correct as I had a low credit rating score because of a mistake on my history and managed to fix it using that



I have signed for experian. And all records are correct. Except for a one which shows i still owe money, but i have just settled the balance within the last couple of weeks. So going to contact them soon about it!

Abz;4734901

I could wait. But its one of those situations where you've seen the … I could wait. But its one of those situations where you've seen the perfect house at a good price/deal and you dont want to lose out! I'd be willing to struggle financially for a few months if it meant getting our dream house


In that case talk to a lot of banks sooner than later. Your income seems ok. How much is the house you like going to cost you? About 3-4 times your income?

Original Poster

Marina;4734968

In that case talk to a lot of banks sooner than later. Your income seems … In that case talk to a lot of banks sooner than later. Your income seems ok. How much is the house you like going to cost you? About 3-4 times your income?



Well the total value of the house is £180,000

But cause I'm only looking to buy 75% of it, i need a mortgage of £138,000. Then my Mrs graduates we will aim to buy the other 25%

How much deposit have u got? About 15 - 25% should get you the house, I think, although I am no expert in this or anything

Original Poster

Marina;4735029

How much deposit have u got? About 15 - 25% should get you the house, I … How much deposit have u got? About 15 - 25% should get you the house, I think, although I am no expert in this or anything



I have a couple of grand LOL....but like mentioned previously....this company is offering to pay 5% deposit! So i was thinking that should be ok and I wont personally need to put a deposit down!

Banned

Most mortgage companies don't buy that whole company pays 5% anymore. And its sounds like a new build?? A lot of the lenders need bigger deposits for new builds as they don't tend to hold value as well.

Also if it is new build play hard ball with developer as theres a lot of discounts going on with the housing slump

Original Poster

Paddy Charlie;4735097

Most mortgage companies don't buy that whole company pays 5% anymore. And … Most mortgage companies don't buy that whole company pays 5% anymore. And its sounds like a new build?? A lot of the lenders need bigger deposits for new builds as they don't tend to hold value as well.Also if it is new build play hard ball with developer as theres a lot of discounts going on with the housing slump




Oh ok...i can see my dreams shattering here!!!!!!!!!!! I will be playing hard ball as well, not point playing until i know i can get the mortgage!

Banned

Sorry to be the bearer of bad news mate

Paddy Charlie;4735097

Most mortgage companies don't buy that whole company pays 5% anymore. And … Most mortgage companies don't buy that whole company pays 5% anymore. And its sounds like a new build?? A lot of the lenders need bigger deposits for new builds as they don't tend to hold value as well.Also if it is new build play hard ball with developer as theres a lot of discounts going on with the housing slump


I was going to say that as well. But there may be many who still do for a good deposit.

Original Poster

its orite mate, The more i know sooner the better it is for me!

But if anyone else bought a new built lately with a company who pays the deposit then please let me know how easy or hard it was to get the mortgage you needed!

I agree about playing hardball with the developers on new builds, some bargains to be had if you can get a mortgage.
A friend is after a mortgage and has been told she's going to need atleast £15-20 grand deposit before anyone will touch her. She has one credit card that she pays off monthly and the only other debt is her student loan. She got the same response when she was after a new build where they said they would pay some of the deposit. My advice is save save save.

Abz;4735060

I have a couple of grand LOL....but like mentioned previously....this … I have a couple of grand LOL....but like mentioned previously....this company is offering to pay 5% deposit! So i was thinking that should be ok and I wont personally need to put a deposit down!


5% of 138k which is about 7k?

Banned

I'd still get in touch with a mortgage advisor though as it usually costs nothing and at least they'll be able to tell you what you'd need.

good luck

Original Poster

sharon_uk;4735154

I agree about playing hardball with the developers on new builds, some … I agree about playing hardball with the developers on new builds, some bargains to be had if you can get a mortgage. A friend is after a mortgage and has been told she's going to need atleast £15-20 grand deposit before anyone will touch her. She has one credit card that she pays off monthly and the only other debt is her student loan. She got the same response when she was after a new build where they said they would pay some of the deposit. My advice is save save save.



Oh man this is not looking good. I guess I will just have to sell my first love (My car that is )

Marina;4735168

5% of 138k which is about 7k?



yeah thats true.

Original Poster

Paddy Charlie;4735177

I'd still get in touch with a mortgage advisor though as it usually costs … I'd still get in touch with a mortgage advisor though as it usually costs nothing and at least they'll be able to tell you what you'd need.good luck



Thanks for your help and advice and being the bearer of bad news :thumbsup:

Rep Left

Abz;4735153

its orite mate, The more i know sooner the better it is for me!But if … its orite mate, The more i know sooner the better it is for me!But if anyone else bought a new built lately with a company who pays the deposit then please let me know how easy or hard it was to get the mortgage you needed!



Nearly new properties are safer option imho, about 3-10 years old. But you will need to find the money for the deposit.

Original Poster

Marina;4735215

Nearly new properties are safer option imho, about 3-10 years old. But … Nearly new properties are safer option imho, about 3-10 years old. But you will need to find the money for the deposit.




Yeah i know thats true, But with the new build you can personalise it quite a bit if you haggle it right! And from our few viewings we've had they seem very willing to negotiate a few things!!

Abz;4735239

Yeah i know thats true, But with the new build you can personalise it … Yeah i know thats true, But with the new build you can personalise it quite a bit if you haggle it right! And from our few viewings we've had they seem very willing to negotiate a few things!!


Yeah, they do have that advantage.

As it is said above, have a face to face chat with a few mortgage advisors. They don't do credit search until the application is actually processed, so no harm in talking to them. Good luck.:thumbsup:

Original Poster

Marina;4735273

Yeah, they do have that advantage. As it is said above, have a face to … Yeah, they do have that advantage. As it is said above, have a face to face chat with a few mortgage advisors. They don't do credit search until the application is actually processed, so no harm in talking to them. Good luck.:thumbsup:



Thanks for all your help! You're a star!!

Rep left!!

Abz;4735285

Thanks for all your help! You're a star!!Rep left!!



You are welcome:)

Abz;4734735

I dont have much of a deposit to be honest. Hence i was looking at the … I dont have much of a deposit to be honest. Hence i was looking at the new builds who pay 5% deposit! I really want to make sure i am in a good situation before applying for a mortgage cause i know if i get rejected then that effects my credit rating as well!



Me and my boyfriend have just been accepted onto the government homebuy scheme.
This is where the government will lend you between 15% and 50% of the property value and you get a mortgage on the rest of the property.
You then get the chance to buy 5% back off the government every 6 months. meaning if you get a nice pay rise you can get additional borrowing to gain more equity in the property.
YOU DONT NEED ANY DEPOSIT, JUST £3K FOR FEES AT THE END!
You should have a look into it, there are also some property developers who do this scheme within their new builds.
Hope this helps

Also, this scheme is alot better than shared ownership as you dont have to pay any rent on the money you are lent, and you only start to pay interest on the money lent by the government after 5 years, to a maximum of 1.75% per year.
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