You think I will get a mortgage?

al1989

Hi,

I'm looking at getting a mortgage - I have a 5% deposit ready in cash from selling my car and am thinking of using the 80/20 shared equity scheme where you pay 5% and the property developer pays 15% over 10 years.

The only problem is, I have been dipping heavily into my overdraft for some time now on a monthly basis, never going over the limit etc though and I have no late payments on my credit record. I'm no longer in it and have a good salary to support the mortgage. Mortgage advisor has said I can borrow up to £200,000 on my own but I'm worried when I go to apply for the loan, the bank will ask for 6 months of statements which aren't great.

Do you think they would give me the mortgage? The repayments would be slightly more than I have been paying in rent for the last couple of years.

Thanks in advance

ryan86uk

If you are being offered a mortgage that high your wage must be quite reasonable. If i was in your position I would save for another six months. Try and get a better deposit, it will only benefit you in the long run.

al1989

Thanks for that, although I'm paying lots in rent every month, almost as much as my mortgage repayments would be so I am finding it extremely hard to save for the deposit. I've found the perfect house, perfect plot and I've been looking for some time. I don't want to rush in, I know I can afford it but it just seems like the perfect time for me. Just concerned about the previous bank statements.

How many months previous statements do banks usually ask for?

getmore4less

al1989 wrote: »

Thanks for that, although I'm paying lots in rent every month, almost as much as my mortgage repayments would be so I am finding it extremely hard to save for the deposit. I've found the perfect house, perfect plot and I've been looking for some time. I don't want to rush in, I know I can afford it but it just seems like the perfect time for me. Just concerned about the previous bank statements.

How many months previous statements do banks usually ask for?

You need a serious look at your spending.

If you swap rent for mortgage you will still have no spare money for the extra liabilities that come with ownership.

WellKnownSid

getmore4less wrote: »

If you swap rent for mortgage you will still have no spare money for the extra liabilities that come with ownership.

...or for when the interest rates rise or you come to the end of the fixed term!

To the OP, buying a house requires a sea-change in spending behaviour... or you'll quickly drown in debt as many have.

Wh05apk

Lenders don't routinely ask for statements, they will however need to see your deposit, and normally like to see how it has been built up, if you are selling your car to provide it will you need to buy a replacement?

The important thing is that you sit down, and carefully look at all costs, assume rates will rise by 2%, and your salary won't, is it still affordable?

somethingcorporate

If you have such a high salary (to achieve a mortgage of £200k) why do you not have any savings?

al1989

Thanks all, really appreciate your advice.

Monthly payments aren't a problem, I've recently received a 25% salary increase which will cover all the extra bits and bobs that come with owning a house.

It's a 2 yr fixed rate so interest rates will not increase for 2 years, by which time my partner will be on the mortgage and earning half of my wage on top. So that doesn't concern me so much.

I did have savings, enough for a 10% deposit but unfortunately I was left redundant for 5 months and as a result my savings were wiped out.

Also, I have already bought a replacement car, but it's still expensive to run and maintain so if push came to shove I could sell that and reduce spending by hundreds a month - although I do LOVE my cars

Like I said, monthly affordability isn't a problem, and in approx 1 year my partner of 6 yrs will join the mortgage which will make it even more affordable, even if interest rates do rise. So why don't I save for a year and put a bigger deposit down? 1. Interest rates are likely to rise soon - I'll get a fixed rate now and stick with that rate for 2 years - a safer option. 2. I'm renting at the moment and I would end up putting ANOTHER £10k in someone elses back pocket. If the monthly repayments are so similar, it seems stupid to 'save' £10k in a year when I'll be giving the same amount to someone else right?

Svenena

al1989 wrote: »

2. I'm renting at the moment and I would end up putting ANOTHER £10k in someone elses back pocket. If the monthly repayments are so similar, it seems stupid to 'save' £10k in a year when I'll be giving the same amount to someone else right?

Is this a lot more than you will be paying the bank in interest on your mortgage and loan over a year?

al1989

Svenena wrote: »

Is this a lot more than you will be paying the bank in interest on your mortgage and loan over a year?

No, the interest is lower, when you include the capital repayment it's higher but then I'm . Plus, that's 1 year less I have to pay on my mortgage and it's my house.

TrickyDicky

If you can borrow up to £200k, Im guessing you're on 40-50k/year salary? This is approximatly £2500 in your bank account every month. That should be more than enough to save up for a deposit.

Mortgage companies are going to ask these questions. If you have a salaray and no savings they will want to know where all the cash is going, and them seeing you constantly in your overdraft is going to ring alarm bells.

I would say stop throwing your money away on cars if you are serious about buying a house.