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  • FIRST POST
    • Biggish_who
    • By Biggish_who 10th Jun 17, 12:55 PM
    • 12Posts
    • 1Thanks
    Biggish_who
    Low income, what chance do I have?
    • #1
    • 10th Jun 17, 12:55 PM
    Low income, what chance do I have? 10th Jun 17 at 12:55 PM
    I'm starting to look at buying my first home. It will be a one bed flat, which is going to be £80 or £90k where I live.

    I am 31 years old, but my work history isn't great. I left sixth form and worked in retail (in the same job) for about 10 years. But my hours were variable, and my core hours were only part time.

    Then I went back to uni, got my degree. And started my new FT job in October. My salary is £17,500. Also, I'm on 12 month probation but the job is going well and I love it, so there's no reason to think I won't stay on. But I realise that means I can't apply for anything until October.

    By then I will have about £10k saved. (My parents let me live at home rent free, so I can save almost all my money except running my little car).

    My parents have paid off their house, and have a good income and savings. They will help me out however they can. But they're approaching their 60s, so I'm guessing they won't be able to be named on the mortgage.

    They will gift me some extra for the deposit. But I don't want to take the mickey.

    Online calculators say I can borrow between 58 and 74k, but I don't believe they are very accurate.

    Also, I believe my credit rating should be fairly good. I've had a loans, credit cards etc before, and never missed a payment or paid late before. I've no outstanding debt (except student loan, which I don't pay back due to my low salary).

    So what are my chances? If I keep saving and then look at applying for a mortgage maybe in the new year.

    Please let me know if there is any crucial info I have missed! Many thanks!
Page 1
    • ACG
    • By ACG 10th Jun 17, 1:02 PM
    • 14,913 Posts
    • 7,505 Thanks
    ACG
    • #2
    • 10th Jun 17, 1:02 PM
    • #2
    • 10th Jun 17, 1:02 PM
    Yuve covered pretty much everything off.
    The calculators are accurate if you enter the information correctly which can catch people out - some lenders are easier than others.

    I think you will be fine to get a mortgage now, the only thing stopping you is getting your deposit in place. The sooner you have that the sooner you can buy in my opinion.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Biggish_who
    • By Biggish_who 10th Jun 17, 1:27 PM
    • 12 Posts
    • 1 Thanks
    Biggish_who
    • #3
    • 10th Jun 17, 1:27 PM
    • #3
    • 10th Jun 17, 1:27 PM
    Thanks for replying.

    Would the 12 month probation and lack of previous full time employment not make me too risky at the moment?

    I will keep on saving. I already have the help to buy ISA with £2,200 in at the moment, but I'm hearing these aren't as good as was initially thought.

    Are there any other things I can be doing in the meantime which will help my case when the time comes?

    How about help from parents? They will happily be my guarantors on the mortgage, but I've read guarantoor mortgage aren't really a thing any more?
    • ACG
    • By ACG 10th Jun 17, 2:23 PM
    • 14,913 Posts
    • 7,505 Thanks
    ACG
    • #4
    • 10th Jun 17, 2:23 PM
    • #4
    • 10th Jun 17, 2:23 PM
    Using a guarantor will reduce your options and cost you more.
    You have a job with a decent enough wage, you have been in your job for 8 months.

    Dont worry about the probation period, did you know a company can get rid of you within 2 years on a whim (providing it is not for discrimination purposes)? Probationary periods mean nothing in the real world.

    Stop worrying. Keep your payment sup to date, save and I see no reason why you can not get a Mortgage. If in doubt get a broker to help you avoid the fussier lenders.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Biggish_who
    • By Biggish_who 10th Jun 17, 2:47 PM
    • 12 Posts
    • 1 Thanks
    Biggish_who
    • #5
    • 10th Jun 17, 2:47 PM
    • #5
    • 10th Jun 17, 2:47 PM
    Okay, thank you.

    I think I just didn't expect such a positive response. I thought someone would tell me I'd need a higher paying job and a proven track record of long term full time employment. I've heard how strict mortgage lenders are these days!

    I also heard that a probation period would mean an instant no from the banks. But I'll be out of that anyway by the time I've saved a reasonable deposit.

    But it's nice to know that I could potentially make a move if the perfect flat came along before that time.
    • Biggish_who
    • By Biggish_who 10th Jun 17, 6:31 PM
    • 12 Posts
    • 1 Thanks
    Biggish_who
    • #6
    • 10th Jun 17, 6:31 PM
    • #6
    • 10th Jun 17, 6:31 PM
    Quick question.... what is the difference between a mortgage advisor and a broker? Which will I need? Or both?
    • ACG
    • By ACG 10th Jun 17, 7:06 PM
    • 14,913 Posts
    • 7,505 Thanks
    ACG
    • #7
    • 10th Jun 17, 7:06 PM
    • #7
    • 10th Jun 17, 7:06 PM
    Nothing really, I think an advisor normally works for a bank where as a broker works from the whole of the market. But it is just a name, I have known people call themselvers advisors, brokers, consultants but they all do the same thing.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Biggish_who
    • By Biggish_who 10th Jun 17, 7:45 PM
    • 12 Posts
    • 1 Thanks
    Biggish_who
    • #8
    • 10th Jun 17, 7:45 PM
    • #8
    • 10th Jun 17, 7:45 PM
    Ok cool. I guess I'd want a whole of the market thing. They'd be able to find out which lenders would be able to lend to someone in my position.

    If I just apply to banks willy nilly then they might refuse me and my credit rating will get damaged. This is what I'm assuming.
    • jlaw4
    • By jlaw4 10th Jun 17, 8:03 PM
    • 99 Posts
    • 56 Thanks
    jlaw4
    • #9
    • 10th Jun 17, 8:03 PM
    • #9
    • 10th Jun 17, 8:03 PM
    Just a side note to the HTB Isa... i've had one since they started back in dec 2015 and just used it to purchase our first home. we got a combined bonus of £2300 so its been really worthwhile having for us! Its not useable at exchange but we just used our solicitors fees money for the exchange deposit and the bonus has been knocked off our final bill so solicitors & stamp duty is all done
    • Biggish_who
    • By Biggish_who 10th Jun 17, 8:16 PM
    • 12 Posts
    • 1 Thanks
    Biggish_who
    That's good then. It's kinda stupid you can't use it towards your deposit, considering that's what it is actually there for.

    There's only one of me, but I'll keep on popping 200 / month in there until I can afford to proceed.
    • DCFC79
    • By DCFC79 10th Jun 17, 9:09 PM
    • 29,360 Posts
    • 18,565 Thanks
    DCFC79
    OP can I ask which calculators you used ?

    Im in the same position as you, looking for my first house, have a H2B set up.

    Thanks.
    Je Suis Charlie
    • Biggish_who
    • By Biggish_who 10th Jun 17, 10:00 PM
    • 12 Posts
    • 1 Thanks
    Biggish_who
    Sure,

    I've used several. I found this one recommended on this very forum
    Nationwide Quick Quote affordability calculator


    It says I could borrow £78k

    However, I then used this
    Halifax Mortgage affordability calculator

    And it came up with only £58k.

    So now I don't know what to believe! Absolute minefield!

    Sorry, it won't allow me to post links to those checkers because I only made my account on here today
    • DCFC79
    • By DCFC79 12th Jun 17, 3:04 PM
    • 29,360 Posts
    • 18,565 Thanks
    DCFC79
    Sure,

    I've used several. I found this one recommended on this very forum
    Nationwide Quick Quote affordability calculator


    It says I could borrow £78k

    However, I then used this
    Halifax Mortgage affordability calculator

    And it came up with only £58k.

    So now I don't know what to believe! Absolute minefield!

    Sorry, it won't allow me to post links to those checkers because I only made my account on here today
    Originally posted by Biggish_who
    Thanks

    Ive used NW and another 1, didn't get the numbers right.

    NW said wouldn't lend me anything but Halifax would.

    Needs more investigation.
    Je Suis Charlie
    • mouthscradle
    • By mouthscradle 13th Jun 17, 9:11 AM
    • 974 Posts
    • 1,122 Thanks
    mouthscradle
    The reason different banks' calculators are giving you different amounts is because each bank will have its own way of calculating affordability and will have different thresholds that they consider acceptable, different income multiples that they're prepared to lend, etc. So one bank might think you're fine to lend to, another might not. That's why it's important to use an experienced broker if you might be borderline, as they'll know which banks are best suited to your numbers.
    Mother, wife, scientist, analyst.
    • Biggish_who
    • By Biggish_who 13th Jun 17, 10:50 AM
    • 12 Posts
    • 1 Thanks
    Biggish_who
    Well that makes sense. I just didn't expect to see such a variation between two banks.

    I will absolutely be using a good broker when the time comes. I believe my family know a good one.
    • shawz007
    • By shawz007 13th Jun 17, 10:52 AM
    • 7 Posts
    • 1 Thanks
    shawz007
    Online tools are a useful starting point but only that. You need to deal with real people to get to your answers. But Broker's are mostly useless middlemen. Walk into 3-4 banks and book appointments. They'll do soft credit checks that won't hit your credit profile and you'll get a better sense of what you can borrow. Find a property, get an offer accepted and then choose one of those banks to do a full application. You'll likely want to go with the lowest interest rate/fees.

    A short period in a job will count against you, but only marginally as long as you can prove it is secure. Student loan will count against you if you are paying it back, since your net income is lower.
    Last edited by shawz007; 13-06-2017 at 10:55 AM. Reason: accuracy
    • smem18
    • By smem18 13th Jun 17, 11:28 AM
    • 27 Posts
    • 8 Thanks
    smem18
    You mentioned about loans and credit cards in your original post and I think there was a typo. Did you mean you've never had any?

    Just one little point - it is possible to get declined a mortgage because of lack of credit. By that I mean that the bank will look at your credit file to assess whether they think you are good with money basically. If you use a credit card and pay it off in full by direct debit every single month, then this shows the bank that you are able to use credit wisely and that you can manage your money responsibly. It builds a little credit history up on your account. If you have absolutely no credit history, then it can be difficult for the lender to judge whether you're a risky person or not, and it has been known for people to be declined for having no credit history. I would advise that you get a credit card, use it for purchases and pay it off in full by direct debit every month. This will build some credit history for you and make you look good to the lender. You won't be charged any interest on purchases as long as you pay it off in full each month.
    • mouthscradle
    • By mouthscradle 13th Jun 17, 12:40 PM
    • 974 Posts
    • 1,122 Thanks
    mouthscradle
    But Broker's are mostly useless middlemen. Walk into 3-4 banks and book appointments. They'll do soft credit checks that won't hit your credit profile and you'll get a better sense of what you can borrow. Find a property, get an offer accepted and then choose one of those banks to do a full application. You'll likely want to go with the lowest interest rate/fees.
    Originally posted by shawz007
    Completely disagree! A good broker is worth their weight in gold, especially to a nervous first time buyer who might not fully understand the process.
    Mother, wife, scientist, analyst.
    • abbieJ
    • By abbieJ 13th Jun 17, 12:51 PM
    • 7 Posts
    • 1 Thanks
    abbieJ
    The reason different banks' calculators are giving you different amounts is because each bank will have its own way of calculating affordability and will have different thresholds that they consider acceptable, different income multiples that they're prepared to lend, etc. So one bank might think you're fine to lend to, another might not. That's why it's important to use an experienced broker if you might be borderline, as they'll know which banks are best suited to your numbers.
    Originally posted by mouthscradle
    Totally agree on this one. I think your best bet ( and safest) is to contact an experienced broker and ask him/ her for opinion on your specific case, while you keep saving for the deposit.

    Good luck!
    • Biggish_who
    • By Biggish_who 13th Jun 17, 7:07 PM
    • 12 Posts
    • 1 Thanks
    Biggish_who
    Online tools are a useful starting point but only that. You need to deal with real people to get to your answers. But Broker's are mostly useless middlemen. Walk into 3-4 banks and book appointments. They'll do soft credit checks that won't hit your credit profile and you'll get a better sense of what you can borrow. Find a property, get an offer accepted and then choose one of those banks to do a full application. You'll likely want to go with the lowest interest rate/fees.

    A short period in a job will count against you, but only marginally as long as you can prove it is secure. Student loan will count against you if you are paying it back, since your net income is lower.
    Originally posted by shawz007
    Yeah. I will probably have been in the job at least 12 months by the time I'm ready to apply for anything anyway. And I have signed a permanent contract, so that shouldn't be too bad, right?
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