First time buyer - help needed!

nscott88

Hi there.

My boyfriend and I are looking to buy a flat in the Glasgow area. My income is £15,200 a year and my boyfriends is £18,000 a year. However, I am a trainee Accountant and sitting my professional exams which means each exam I pass I receive a £500+ salary increase (there is 11 exams ocer 3/4 years) Plus my 2% annual increase each tax year. My boyfriend works in sales and gets bonuses of between £50-£300 each month depending on what he has sold.

I have no deposit to put down, but my boyfriend has about £7-8K (I would rather not use that as I don't have money to put down myself and all the deposit would come from him!) We are off to see a financial advisor tomorrow with the Bank of Scotland to see how much we could borrow. We have sat down and done a budget and worked out how much we could afford to pay each month.

Just now I have a £6K loan from last year when I bought a car and my boyfriend has a loan of £7K to buy a car, paid off his student overdraft/credit card. I have no credit card, however I have applied in the past but been rejected. But been offered a £1K overdraft instead (which i refused!!) I got a credit report after my application for credit card failed and it turns out that my credit score isn't too good. Although, I am only 21 and not had that much credit out in my life - car loan, car insurance, mobile and purchase of laptop.

I imagine my boyfriends credit score will be good or very good as he always keeps up payments and not missed a payment in 7 years. I however had a dispute with T Mobile, which left me unpaying a £40 bill for two months - which has affected my credit score.

Does anyone think we have a chance of getting a half decent mortgage for our first flat?

Thanks,
Natalie

PasturesNew

You don't have a big enough deposit.
The loans will count against you.
Your credit score isn't great.

What's the rush?

Why not just save more deposit and clear your debts for the next 3 years, after which time you'll have a bigger deposit and salaries maybe. And if you don't, then it's a good job you didn't buy now.

patch3228

Hi Natalie,

Literally skimmed that in 30 secs, but a few things popping to mind:

Deposit-wise I think that is quite small, but depends on the value of the flat - generally even 10% deposit is bordering insufficient for a competitive deal.

Probably best building up your credit history and clearing your debts.

Gut feeling it may be too early for you guys to buy a flat - wait till you have saved some more ker-ching and then even if you both have unequal contributions to the despoit then you just have a different % share of the house.

nscott88

Thanks for that.

Well we went to see the Financial Advisor yesterday and I was pleasantly suprised - we got offered a lending total of £98,555, with a 10% deposit required. However, most flats/houses we've been looking at and interested in are between £70-80k. So he based it on a mortgage of £85K, which is a lending total of £76,500.

The only thing is, we will need deposit of about £8500. I really dont like the idea of using all of my boyfriends funds. So we decided that we could increase both our loans. My boyfriend got rejected his application of an extra £3000 on to his. However, I don't understand why as his credit score is in the very top band.. so it cant be that!

We are trying to set out a budget to how much we could save each month. But on our salaries and where we live just now, it would only be max of £200 each a month. To save £4000 between us would take nearly 2 years (because no one sticks to a budget these days!!) And the financial advisor told us house prices are on the rise. May not get a good deal in 2 years time, or even 6 months.

Unsure of what to do.

Thanks,
Natalie

jojo9239

Maybe im wrong but I would advise against increasing your existing loans and just save your own money for a deposit???

poppysarah

Using a loan to make the deposit is such a bad idea.

chewmylegoff

if you borrow money to fund the deposit, the mortgage provider is just going to deduct what you have borrowed from what they are prepared to lend you - it's not a viable option.

i expect the reason that you boyfriend's application to borrow an extra £3,000 was turned down is that he already owes them £7k and he only earns £18k pa. you can't just borrow an indefinite amount just because you have a good credit score. further, i assume that he was asked why he wanted to borrow the money - it's a standard underwriting question. if he said "to fund a deposit for a house" the lender is always going to reject in the current climate, as you're effectively asking them to lend against a house without the comfort of a mortgage charge, and telling them that you're going to be borrowing a load more money off someone else who will have the protection of a mortgage charge. not a great business opportunity for them when house prices nationally are falling. (i note your financial adviser claims prices are rising in your area - check this carefully, it sounds like tosh, but i don't know what is happening in scotland myself).

you need to save the money up yourself. you can't afford to buy a house at the moment unless bf pays the deposit. personally i would have thought it would be a better idea for him to pay off his loan using the cash he has saved up - but each to their own.

clearing_out_my_pockets

I second what everyone else is saying - don't increase your loans. Mortgage companies will take existing debt into consideration when they're looking at how much to lend you.

I think you need to swallow your pride and accept that you'll need to use the money your boyfriend has saved. I am in the same position as you in a way - I earn more than my fiance and have a larger deposit saved, He has £1,000 and I have £10,000. If we wait until he catches up with me or can contribute 50/50, we'll never buy somewhere.

Have you also looked at how the pair of you will afford a mortgage of £76,500, your existing combined loans of £13,000 plus the top up loans AND bills, considering that at current you can only save £200 a month?

You really need to do your sums here...