Bit of advice plse??

stupidgirl09

Myself and my partner are considering buying a house. My credit rating is good, i think! My credit score was 999 last time i checked. However my partner has a default on his credit file back in 2003 (apparantly it is due to fall off in Nov!) and i think his credit score was around the 800 mark.
I appreciate other things are taken into consideration as well but i want advice on whether or not it is worth looking around for a mortgage now or not?
Also is there a way of finding out if we would qualify for a mortgage without it showing on our credit file's??

Any advice would be greatly appreciated!!!

_Andy_

What kind of property values are you looking at and most importantly how much deposit do you have saved up?

stupidgirl09

Have a deposit of around £15,000 (not much in the current climate i know!) could possibly get a bit more at a stretch and properties i have been looking at are between the £155,000 - £165,000 mark.
I have seen a deal on a new build recently i think it was through rowland homes where you would get a 75% mortgage and r homes would put up the other 25% which would be deferred for 5 years then you would pay it back over 10 yrs or if you move etc. Would that be a better option because that would be a 25% deposit wouldn't it??
Again though don't want to even try if there is any chance of getting refused and it putting a black mark on our files.

Chris_Yates

regards your credit score, Martyn Lewis himself says there is no such thing, as different lenders apply different rules to their own lending. But if your credit file shows you can manage debt repayments, you will most probably be ok if your income is high and secure enough.

As you are buying a new house, I am in a similar position, and I have found there are a few things you need to consider:

I assume you are a first time buyer, and the scheme you are talking about sounds like homebuy direct, whereby the government and identified local housing association provide you with an equity loan to cover your deposit of up to 30%. It is important to realise with this scheme that you will be limited to a property that meets your individual needs, and nothing more. So for example if it is just you and a partner, then you will be restricted to 2 bedroomed properties. You will need to budget to pay this equity off within the five years to avoid interest, (or you will end up paying something in the region of £100 per month interest after that period on top of your mortgage). Be wary about thinking you can remortgage for the whole value of the house after 5 years, as you might realise negative equity, therefore you would be unable to remortgage for the full value.

You might not be able to get the best mortgage deal, as shared equity is sometimes seen as a means of circumventing the system and getting a 100% mortgage. I have taken Martyn Lewis' advice and spoken to a whole of market broker. They identified Nationwide and HBOS as the best options, which is what others are saying on this forum.

Also on this forum, people are talking about how bad these schemes are, which is true if you want to get the most for your money and take advantage of low house prices. However, most people are saying there won't be any drastic price rises in the next 2 years, and that in fact it is likely to fall further still, so it may be wise to wait for longer if you can manage to build a bigger deposit, if you dont need to buy yet.

I have reserved a plot with Barratt Homes, and are taking advantage of a 15% equity loan directly from them. We still have time to pull out, but for our circumstances, the house is well within our limits (2.5 times our income), which will leave us a lot of room to spend our money on things we want, plus pay off the equity loan asap, (or even manage with 12% interest rates). So I feel it's the right decision for us.

I don't know if that helps, but I have trawled through this forum to get the answers I need, and this is the general feeling.

stupidgirl09

Thanks for your advice Chris, greatly appreciated...i have looked into the homebuyer scheme and we don't qualify. This deal is one that rowland homes do themselves so your not restricted to number of bedrooms etc. down side is you have to get a mortgage with halifax and i'm not sure what the rates will be.
i'll have a think about it.....

sgh1976

Chris_Yates wrote: »

you will be restricted to 2 bedroomed properties. .

Not strictly true. The scheme does have some flexibility about it. They will take into consideration if you are planning to start a family. Then a 3 bed becomes an option. There are also rules about room sizes. A room has to be a certain size ot be considered a bed room and some builders are happy to move the partition wall to make a room smaller so it becomes classed as a "study".