First Time Buyers, in a slight pickle.

majestix

Hi,

Recently, myself and my girlfriend have found a property we are keen on, I earn around £25,000 pa and missus earns around £16,500 pa, what with her recently becoming pregnant the asking price of £79,000 of the afore mentioned house seemed within our affordability range (impending maternity leave, etc).

Unfortuantley, we're quite worried about applying for the mortgage itself.

The reason for this is my rather eratic Credit File. Having recently signed up to both Experian & Equifax to monitor and manage my own credit, I notice both were very different.

The Experian File has no defaults, no missed payments on any accounts, no CCJ's or anything remotely adverse that would upset potential lenders, yet the score is around 10 to 20 points short of being average, and is indeed sitting slightly on the poor side.

Over on the Equifax File, things are a little more scary, I have 2 defaulted accounts but settled, and a recent suprise of a defaulted loan (£700) all from a previous relationship, around 2005. It also shows my own T-Mobile account, Vodafone, BarclayCard, Capital One, and 3G accounts sitting up to date and in the green. Leaving me again sat around 10 to 20 points out of the average sector, and described again as poor.

Now, the problem is this, my girlfriend (Who may I add, has a very healthy credit file) works for Natwest and is eligible for a slightly better employee rate with 'YourBank', but I know for a fact they search through Equifax, and it would be highly likely that we would be refused.

Whereas Halifax and HSBC (our second and third option) search through Experian, who possibly may be more keen to offer us a deal.

My question (if your still here, dear reader) is what would be the best course of action. I understand that the above scores I mention don't contribute solely to our application but go some way in assisting it.

I understand waiting another 3 to 4 months would improve our position slightly, but with the missus due in a few months, I was planning on gambling with an application, so that she carry out her 'nesting' as she calls it.

Your opinions would be greatly appreciated.

BitterAndTwisted

Apart from the impending addition to your family (congrats, by the way) I see no reason to rush headlong right now. In your position I'd rent somewhere decent for the three of you and re-apply some time next year if and when your credit file is repaired. Properties might even be cheaper in 9-12 months than they are now.

Doozergirl

I wouldn't worry too much about it.

You can go for your agreement in principle before you make any offers anyway so do this as soon as you can so you're not wasting anyone's time.

There have been a lot of people on here that have worried un-necessarily about this when the fact is if you just go for it, you will find out. I misbehaved with a free overdraft when I was 19. I think that was about all the credit I'd had until I got my first mortgage when I was 22 - not sub-prime!

majestix

Thanks for the quick replies.

I understand the option of a Mortgage in Principal, but that would of course leave a search on my already weak file, should we fail in our application of course. Should we get an agreement I suppose it wouldn't matter.

As I say, if Natwest search via Equifax that would be one credit search. So I suppose if we failed in that area we could nip across town and apply with the Halifax and do another via Experian. A search on each file shouldn't affect or rating to much, would it?

Am I right in my research of banks to credit agencies?

Doozergirl

So you don't want to apply for a mortgage just in case you don't get one? That's backward logic if ever there was.

It's not unusual to apply for more than one mortgage. The search isn't going to affect you so badly that you can't ever get another one.

Honestly, go for the MIP and get a decent night's sleep - whatever the answer it's better to know than worry about it!

majestix

Heh, I suppose it is a bit of backwards logic. I guess a couple of searches are not going to decimate my limp credit file.

Again, thanks for your kind opinion.

Doozergirl

majestix wrote: »

Heh, I suppose it is a bit of backwards logic. I guess a couple of searches are not going to decimate my limp credit file.

Again, thanks for your kind opinion.

Honestly, life is too short to sweat the small stuff - I bet it will be fine, your income multiples are small etc . Don't spend too much time worrying - spend time doing!

vegasvisitor

I was told last year to be very careful with searches, I was told they DO affect your rating. I believe this is because if you apply for something, it looks like you could be processing for it, and this may be factored into your next application.

Of course it could be financial advisors starting this rumour to make people just do what they tell them and not approach any banks directly themselves??

poppysarah

If it worries you not being able to get a mortgage right now, then don't get one. Save up, continue to work on being a good credit risk and see how you feel in a year.

You feeling pressure to finding a house is a natural reaction to the increase coming in your family. Relax. People can be just as happy in a rented house whilst having kids.

majestix

Yeah, I appreciate the complications of too many searches, which is why I plan to do only two. I'm going to take a chance with Natwest and my girlfriend's employee rate, and the other with a more probable chance of acceptance with Halifax.

Can anyone clarify that Halifax search soley through Experian.

Again, thanks for the kind opinions.

thriftyamy

for my two penneths worth...!

I know some lenders (mine included) credit CHECK but not SCORE (this can be a valuable bit of info if you have no existing credit arrangements, as your score would be very low but through no fault or default on your own part!)

it might be worth talking to a financial advisor?