First Time buyer with debt and no deposit. HELP!

Mirtos

HI.

My partner an I are trying to buy our first house. We're based in london and curently paying £1000/pcm between us in rent. He earns £25,700, I earn £15K guaranteed with proof, but a substantial additional figure through self employment (around £6k pa) but have no proof of this as yet. Between us, we have debts from our postgraduate studies of around £27K which we are paying off comfortably at our current salaries. We need a mortgage for around £180K and had found one for £188K with brokers Alexander Hall, but then when we tried to get it agreed in principle it was refused on credit grounds. We have only one default from five years ago, the rest of our credit history is pretty good (we looked it up on equifax), but we do have this debt. Is there any way we can get a mortgage for £180K? Perhaps by proving how much we can afford and have been paying for the past two years in rent???

We are so lost on this - having been promised a mortgage by Alexander Hall, who when they couldn't secure one for £180K totally lost interest in us and wouldn't help us find another, if lower deal.

We both have Masters degrees and are employed. No deposit though.

Any help would make my day.

herbiesjp

Difficult to say without knowing what the purchase price is and what deposit you have - can you post these figures?

Which lender did you apply to ?

$17mma

Mirtos wrote:

HI.

My partner an I are trying to buy our first house. We're based in london and curently paying £1000/pcm between us in rent. He earns £25,700, I earn £15K guaranteed with proof, but a substantial additional figure through self employment (around £6k pa) but have no proof of this as yet. Between us, we have debts from our postgraduate studies of around £27K which we are paying off comfortably at our current salaries. We need a mortgage for around £180K and had found one for £188K with brokers Alexander Hall, but then when we tried to get it agreed in principle it was refused on credit grounds. We have only one default from five years ago, the rest of our credit history is pretty good (we looked it up on equifax), but we do have this debt. Is there any way we can get a mortgage for £180K? Perhaps by proving how much we can afford and have been paying for the past two years in rent???

We are so lost on this - having been promised a mortgage by Alexander Hall, who when they couldn't secure one for £180K totally lost interest in us and wouldn't help us find another, if lower deal.

We both have Masters degrees and are employed. No deposit though.

Any help would make my day.

It sounds as if the main concern is the default you have, any lender big or small will look at that negativley, as it was registered 5 years ago you onyl have 1 yr left until it is removed from your file.I would use that year to reduce your student debt as much as can making additional payments then maybe apply once the default has gone. In addition with a new home you will have added expense so the more you can get rid of your current debt the easier affording a new home will be.That's my view anyway..But maybe a more mortgage guru will come along and advise different and maybe able to help you more.

Mirtos

Purchase price is 180k. no deposit ie: we're after 100% mortgage as all our ready cash is going to be eaten up by solicitors fees and stamp duty etc...

NB the default was only for £51 - I didn't even know it had happened until equifax told me.

herbiesjp

Which lender turned you down?

$17mma

herbiesjp wrote:

Which lender turned you down?

Think they mentioned in post Alexander Hall

herbiesjp

$17mma wrote:

Think they mentioned in post Alexander Hall

Alexander Hall are the brokers - was wondering which lender they got the agreement in principle with to turn them down

For a £51 default I'm sure there would be lender's willing to listen.

Mirtos

I've checked with Alexander Hall, and it was Northern Rock that turned us down for the whole amount £185k. I suspect that they might have been our best bet as they don't consider credit cards.

MortgageMamma

NOrthern rock will not accept any defaults usually, has the default been paid off? A good idea is to contact a whole of market broker who has a decent relationship with their northern rock business developement manager and ask for the case to be assessed on its individual merits, rather than through a credit check. Any broker with enough pull over norther rock could do this for you. Also I note you say you have checked your equifax credit reports. It is a good idea to check https://www.experian.co.uk as well as this is the more popular credit reference agency and could well hold different information about you, and this could be a problem.

Don't worry though, even if Northern Rock won't accept you for the mortgage, if your credit status is as you say it is there could be other lenders willing to assist.

Mirtos

Northern rock have now offered us £140k - 145k through Alexander hall, but in London, this doesn't buy much. The default is paid off - in fact I wasn't even aware it existed - as far as i knew, all those bills had
been paid on time and in full. I'll check out experian.
In the meantime, do you know of any brokers who meet the criteria you describe?

Thanks.

OMAR

Are you sure Northern Rock dont take into account Credit Card balances when working out how much they lend you??!!......

Also, Why does Northern Rock lend more through brokers than going direct with them???