1st Time Buyer mortgage query - can I even get one?

Southgaz

Hi all, after reading many many threads on here I havent quite found the info I'm looking for as every similar situation has a few details different so here goes my story...

My partner and I had a mortgage for around 4 years on a property in Southampton which we sold in approx March 2008. The amount was £150k and we never missed a payment. We sold the property due to a work move to Manchester for two years before a further move to Scotland which is where we are now. Because of this double move we did not bother buying in Manchester so rented there and are currently in rented accommodation until we find a place we like up here.

We have now possibly found such a place but there is a problem which is that in August 2007 an old current account which i assumed had been closed was defaulted with a balance of £999 (This was all interest and fees after an attempt to pay it off and close it had been calculated wrong and left a balance of approx £100 overdrawn - i had a £1000 overdraft). HSBC never actually informed me of any intention to default this account and the first I knew of it was when the creditors they transferred the debt to got in touch, I was shocked but paid the debt immediately (irrelevant i know!). I have tried unsuccessfully to get the default removed because of this lack of communication from HSBC but unfortunately have had to settle for a notice of correction with Experian.

All my other credit accounts are either settled or have no missed payments in their 36 month history according to experian. My credit card debts total approx £9000 (roughly £300pm), i have one loan with £14000 remaining (£268pm) and just over a year to go on a car hire purchase agreement of £429pm (approx £6k). My partner has no credit problems, one loan at £360pm and cc debts of £11k-ish paying around £400pm. Our combined income is £116,000 and after April will be £125,800.

The house we have seen is a new build listed at £469,475, however the builder is offerring a 20% shared equity meaning the balance for us to fund is £375,580. We could get together a 5% of the original price or push to 10% of the £375k. Assuming we could even get a mortgage based on the above would we be looking at a 90% LTV of the £375k with the 10% option or could we get a 75% LTV deal with the 20% from the builder plus our 5%?

Any help/advice would be extremely grateful, thanks in advance!

somethingcorporate

How much is your partners outstanding loan for?

Rather than labour yourselves with another £375k of debt on top of your existing CC/loan debt you may be better spending 6 months clearing some of the lower value (and higher rate debts). This will also give you time for your new higher salaries to filter through to payslips and give you a better basis for applying for such a mortgage.

getmore4less

Big incomes AND still lots of debt.

Agree fix the spending/debt problems first.

Then rebuild the deposit.

Move into the smallest rental place you can and save even faster.

JA1000

2004 - 2008 house sold for £150k, where did all this capital go you would have made a fortune and sold at the right time.

20% Shared equity - when do you get to own it??

You have around £50k of unsecured debt, you will have to allow banks to see this at 3% per month, so £1500 pm taken out straight away.

Deduct the mortgage payment which I think will be at least another £1500 plus bills and living and they will start to question affordability.

Why max out on mortgage and debt why not go cheaper on the house. For that money in Scotland is it a castle?

Conrad

90% is probably the most you will get. An experienced dedicated mortgage broker should be able to help. It's far too detailed a case to try an 'solve' on an internet forum.

Southgaz

The reason for the move is due to it being a company relocation and if we buy by the end of the year we get stamp duty, removal costs, legal fees, white goods, floor coverings and curtains paid for! This is a big expense covered as you can imagine. The debts we have we can quite happily live with and clear as we go due to this offer from our employer.

We are currently renting for £525 a month - as cheap as we can get for somewhere big enough to hold our furniture!

Our budget calculations easily let us afford another 1500-2000 a month without any change to our lifestyle so with the offer from work and the housing market being where it is with incentives such as this it seems we have to buy!

In answer to the question about ownership we would own 100% of the property from day one according to the builders info (https://www.macmic.co.uk)