Another FTB 'will I get a mortgage' thread

a_vandelay

Hello,

Long time lurker first time poster.

I earn 48,0000 (55,000 including overtime)- been working at the same place for 7 years
GF earns 18,000
we have 11,000 in savings, looking to save around 20,000 and get a 10% mortgage sometime next year
I've been on electorial roll at the same address over 5 years- GF hasn't yet registered
GF also has just got a mobile contract and credit card, which I've told her to get to boost her rating- she has no credit problems whatsoever

BUT

Some potential credit problems
I owe 16,000 on a loan, paying off 400 a month- no missed/late payments
3x late payments on credit card in the last 12 months (last one in March- have since paid off and closed card- not down to not being able to pay, just poor organisation on my part)
gone past overdraft limit twice (and been charged) in the past year

Otherwise no other credit problems- just finished paying off another loan (no missed/late payments), also student loan will end next month, mobile, Sky, broadband, all paid on time since forever and no problems

Checked Experian a couple of months ago and had a Fair score of 824

Been buying everything on CC and paying it all off every month

Will we get a mortgage?

Is 200k (20k deposit, 180k loan) too much to be considering?

Would we be better off with a single or joint application?

This would be FTB purchase

Thanks in advance for any advice

a_vandelay

bumping this up

JimmyTheWig

How long has the loan got left to run?
Can you payslips / bank statements / P60s show that you earn £55k? I.e. how regular is the overtime and how long has it been happening for.

I'm no expert, but I would have thought that with the loan and without the overtime guaranteed (plus the fact that 90% loan to value is high these days) you might struggle to get a mortgage.

Is there a reason for wanting to buy now? Would it be cheaper for you to rent for a while?
With house prices unlikely to shoot up in the next few years you may be better off renting, paying off the loan and building up a bigger deposit. Then you'd be an ideal candidate for a mortgage.

You're doing everything right. Just don't miss any more credit payments! Have you considered a direct debit to pay the balance or minimum payment on your credit card each month?

puddy

barclays told me last week they do 5x the income, we just didnt meet the affordability criteria, i would iimagine that the OP does, i cant see a problem with the mortgage application myself

g_attrill

The late payments might be a problem, but all you can do is try really. However I also think it would be best to build as much of a deposit as you can, this will mitigate the negative aspects. With your combined income you should be able to save a lot more than you have already, are your outgoings a lot too? Have a look into cutting back, renting somewhere smaller/cheaper, get the GF on board too.

a_vandelay

Thank you all very much for taking the time to reply

The overtime is regular- have had it over the past 5 years- however I have my suspicions that my employers will want to cut back on this in future (maybe the year after next), so I probably wouldn't take this into account on my application.

There is honestly no desperate reason for us to buy right now, it's just we got engaged recently and it would be nice to start preparing for our future together.

We've both cut back a lot on our outgoings, which should make our savings rise pretty quickly. My credit card is also under control, been paying off in full every month over the last six months and I'll be keeping this up (one of the many things I've learned from reading these boards). My main concern is how likely these missed payments, plus going over the overdraft limit will screw up my application.

We've been thinking about using the savings to pay off the loan, but then we'll be back to square one with the deposit.

Again, thank you all for your help.

TrickyDicky

a_vandelay wrote: »

We've been thinking about using the savings to pay off the loan, but then we'll be back to square one with the deposit.

Not really, to be honest, you'd be in a better position. I guess you are paying some large % on the loan? your savings are never going to beat that, and the loan is only going to look bad on any application. Pay off the debt and you have no outsstanding debt. Your net worth is currently about 0 anyway.

I am assuming then you are looking to get a £180k mortgage. I would consider having a greater than 10% deposit anyway because you never know - you may find your dream house but its on the market at a price that would give you 9% LTV - meaning no mortgage for you. Having up to 20% deposite means you have a good coushin to play with when looking at houses.

Also remember, up to £5k of your savings are going to dissapear in fees (another 5k if you go over 250k stamp duty threshold). Plus what about furniture and redecorating?

a_vandelay

Thanks again to everyone who replied. TrickDicky, you have made me think very carefully about paying off the loan. If I did that, we could save around 2k per month quite easily, giving us 10 months to build the minimum deposit, and like you say be in a financally better position. Hmmm...

Any more advice from anyone?

I'm mainly concerned by how severely missed payments on the credit card, plus being overdrawn and penalised, PLUS having the loan will affect any application

Thanks