Mortgage help for FTB

stuartbartley

Hi guys and gals

My partner and I are trying to get a mortgage for a new build that is £150,000. We have a deposit for £22,500 and had an AIP with the post office (before we found the house) but they only do mortgages for new builds if you have 25% deposit. We both work full time (salaries of 20,500 and 23,295) have no debts other than bank overdraft and over £26,000 in savings. As i said we have an AIP with the post office (which is now effectively useless), had an AIP about 2 months ago thru a broker but havent used it as my partner is reluctant to pay £800 for his services (understandable!) and tried to get another AIP with the Yorkshire BS as they offered a competitive rate for 2 year fixed. However, they came back and said they would only lend us £87,000, which is obviously useless. As this is only double our salary i was confused (we have almost zero outgoings - we dont drink or smoke and just use our mobile phones - £60 between us). I rang to ask why this was the case but they couldnt tell me, they said underwriters had made the decision, and that i would need to check my credit rating to see why. Does having a few AIPs affect your credit? What could be the reason for the lack amount available to us? We are getting worried now as we have paid the £500 deposit on the house and now are trying to find a mortgage and are confused after Yorkshire BS decision when we are debt free and have good salaries and good savings!

Any help or advice would be great to put our collective minds at ease

Lifes_Grand_Plan

Have you checked your credit file like they suggested? You can do it for free in some cases.

Failing that you just need to shop around and find someone what will lend you the money, or use the broker and pay him his £800 (presumably he made his fees clear up front and he has to make a living too).

Cannon_Fodder

There was a reason why you had a target of £130k from your other thread ?

Its all very well getting excited about a shiny new place, but if it risks blowing your budget, you might need to rethink.

stuartbartley

hi cannon, yeah the other house from my thread about 2 months ago needed a lot more work than we initially thought so didn't offer. we have done our calculations over and over and we can afford £150,000 (£127,500 mortgage) on our salaries (even though mine is increasing in the new year). do some lenders refuse when others accept for no apparent reason? does getting 2 or 3 AIPs affect your credit rating? I think the mortgage advisor is well worth his £800 he has been fantastic, but it's still a lot of money obviously!

JimmyTheWig

Can you borrow £15k from family [unlikely, I know, but worth asking] to get the 25% deposit required for the post office?

Definitely worth checking your credit files. Ask if you don't know how to. Sometimes they can be wrong.

But I think the broker has earned his £800 if he's managed to find you a mortgage when you can't find one yourself. I think going with him is probably your best bet. make sure you only have to pay him if you get accepted for the mortgage, though.

stuartbartley

i think he has earnt his £800, and its only payable on completion... no i haven't checked my credit rating, i 'assumed' that because i've had no debts (i had a credit card that i paid every month and now the balance is cleared) that we had good credit. My gf has never had a credit card but has 20k in savings...

JimmyTheWig

stuartbartley wrote: »

i think he has earnt his £800, and its only payable on completion... no i haven't checked my credit rating, i 'assumed' that because i've had no debts (i had a credit card that i paid every month and now the balance is cleared) that we had good credit. My gf has never had a credit card but has 20k in savings...

1. Like I say, it can be wrong sometimes so get them checked.

2. Savings don't count at all on a credit check. It's quite possible that your girlfriend doesn't have any credit history at all. Which isn't as good as it may sound.
Would you lend a serious amount of money to someone who'd never borrowed anything before? With no credit history there's no history of being a good customer.

See what your broker says, but if you end up having to wait then I'd suggest your girlfriend gets a credit card and uses it each month (only using it for things she would have bought anyway, e.g. weekly petrol) and pay it off in full each month. That will build a positive credit history.

stuartbartley

cheers for all the advice. i have a credit card with £0 balance, should i close the account (will it improve my credit rating?) or should i keep it?

Lifes_Grand_Plan

I could be wrong here but hopefully someone can clarify to help further...

AFAIK an AIP doesn't do a credit check and so if that is the case then you should be ok to get as many AIP's as you like....

AIUI it is only having a lot of credit checks that can affect you getting credit....

If the above is correct then shop around and see more banks / building societies / brokers.....

"do some lenders refuse when others accept for no apparent reason?"

As for the above, all lenders have different criteria for what they will lend. When we took our mortgage Natwest (who I had banked with for years) would only offer us £85k which was about 2.5 x joint income at the time.... You couldn't even get a 1 bed flat for that here.

Eventually we went to HSBC who would have lent us up to £150,000 or more....

opinions4u

stuartbartley wrote: »

cheers for all the advice. i have a credit card with £0 balance, should i close the account (will it improve my credit rating?) or should i keep it?

Keep it. Use it for one purchase or more every month. Repay the balance in full every month.

An active credit card is better than a dormant one or no card at all.