Mortgage Query

tft1

Hi. My partner and I are currently looking to buy a house together (just starting to look, first time for me).
Stats are:
40k deposit
70k combined income
looking to borrow around 200k.

I have a few questions, first one is it likely we can borrow this much?

We currently rent separately, I've lived in my flat for 5years. We were talking about my moving to his house whilst we house hunt to save some cash, it is wise to do this so soon to a mortgage application-will it affect my credit score? I am alos looking to get a new phone contract-should I wait? My credit score is at the top end of fair, 1 missed payment in a year. I don't want to do anything now that may affect our application when we make it.

Thank you in advance for any advice, it is very much appreciated.

Thrugelmir

Borrowing a £160k shouldn't be an issue on your incomes.

Don't stop life as you intend buying a house.

Reducing to one rental property. Enabling you to increase your deposit further makes sound financial sense.

You can explain your circumstances at the appropriate time.

Crinz

As long as you keep the Electrol Register updated then moving around isnt an issue.

200k borrowing for 70k joint income shouldnt be an issue at all.

Phone contract - wont cause any problems

Jackinbox99

I dont see any problem at all. You have 20% deposit which opens you up to a lot of lenders and a good income. The lender will obviously want proof of income etc.

Getting a new phone contract shouldnt make any difference to credit searches. I actually over the last month have had searches done for 2 mortgages, a loan and a credit card - all without any problems.

tft1

Thank you all so much for your replies. I've been worrying about the phone/moving issue, even though the sole purpose of them is to save money!

I forgot to mention we have around £15k debt between us, but both have good credit scores-is this likely to affect the borrowing amount?

Thank again.

Crinz

should still be ok.

Take how much you pay to service these debts each month (credit cards, take 5%), multiply by 12 and take that figure away from your salary. As long as this borrowing is still under around 3 1/2 times salary then you should be ok.

Would be worth getting an agreement in principle to confirm this though

la_fleur

Hi tft
we're in a similar situation; first time buyers, joint income 80K, deposit 25k, debts 10k, spotless credit history and our debts pay off quite quickly. In fact, by January we should only have 7K and by the second half of next year we should be debt free. We're trying to borrow around 220K. We have been declined by HSBC already, so now we're trying to get a mortgage with Britannia. It's so nerve wrecking, all this waiting...

tft1

Crinz wrote: »

Would be worth getting an agreement in principle to confirm this though

Thanks again for replying, this is the next step. I didn't want to do anything in the interim which would upset my credit score.

Based on the information given, are we likely to get quite a competetive rate? Is it worth clearing any of the debt with the deposit?

dimbo61

Move in together and see if you are happy being together 27/7
This will also mean you can save more and clear as much of your debt as possible.
Saving another £10,000 would get you even better deals as LTV would be 75% or less.
Its a buyers market at the moment ( might be for some time).
So check out the estate agents for empty properties !!! may get a bargain.

Thrugelmir

tft1 wrote: »

Thanks again for replying, this is the next step. I didn't want to do anything in the interim which would upset my credit score.

Based on the information given, are we likely to get quite a competetive rate? Is it worth clearing any of the debt with the deposit?

Clear the debt entirely. As ultimately it'll cost you money.

Better to have a slightly higher mortgage rate than pay unsecured loan rates.

Consolidating your living expenses should reap rewards. So by the time you're ready to move in your financial situation should have improved considerably.

Thrugelmir

la_fleur wrote: »

Hi tft
we're in a similar situation; first time buyers, joint income 80K, deposit 25k, debts 10k, spotless credit history and our debts pay off quite quickly.

Question an underwriter would ask is. Why £10k of debts with a high income. Suggests lack of discipline when handling personal finances. Not a criticism merely an observation.

Lenders have limited funds to advance. So if a better applicant is in front of them, then a factor such as debt level may decide your fate by an underwriter.