First Time Buyer Advice Please.

kjn469

Hi, I've been reading these forums for a while and wondered if there's anyone who could offer advice with my current situation.

My partner and I are both first time buyers and we're looking to get on the property ladder this year. Through family and our own efforts we should have a deposit of around 40-50k looking at properties with a value of somewhere between 200-250k which would mean a LTV of around 75-80%.

I earn 33k and my partner earns 25k.

The problem is with my credit file - I have one satisfied default from Orange which dates back to 2007 for the value of £205. This is shown on my file with all of the CRAs. Other than that, I have been on the electoral roll at my present address for 2 years; I have 2 credit cards on which I pay the full balance off every month as well as a Virgin TV and Mobile account on which I have not missed a payment whatsoever since I started the accounts 18 months ago.

My partner's credit file is spotless and she too operates 2 credit cards in the same manner I do - paying the full balance off each month.

My bank - Lloyds - seem to like me. They're always offering me unsecured loans of up to 25k (which clearly I won't take) and have offered me their premier account and the such. I'm aware that they don't offer the best mortgage rates but presumably they would be a good place to start given my credit history?

Is anyone likely to consider a joint mortgage application given my credit file?

Thanks in advance for any advice.

GMS

I would suggest speaking to your bank first to see what they can offer. Use this as a benchmark.

May be worth speaking to a Whole of Market broker to see what other options you have. The default is small and quite old so there are lenders who would consider it.

However there are lenders who would decline due to it so be sure to apply to the correct lender, not necessarily the cheapest as too many credit searches will harm your credit score.

kjn469

Thanks GMS, that's helpful. Could you tell me which lenders are likely to consider it? And, given my complications would a whole of market broker be my best bet in ensuring acceptance?

GMS

kjn469 wrote: »

Thanks GMS, that's helpful. Could you tell me which lenders are likely to consider it? And, given my complications would a whole of market broker be my best bet in ensuring acceptance?

I do not know enough of your circumstances to suggest lenders and doing so would be unfair.

A good broker should be able to help you, although nobody can ensure you are accepted.

It is however important to apply to the correct lender. You could try to do this yourself if you wish. Make sure you research criteria and speak to the lender before applying. Broker would do this for you if you chose that route.

Wh05apk

I think if you are looking at 75-80% ltv, you would be ok with most lenders as the amount is low, and over 3 years ago.

Of more concern could be the source of the deposit, when you say family, are they gifting you the money, or lending, with repayments? most lenders will not like this.

hcb42

I dont think Lloyds are good value for mortgages, not by a long way.

I have banked with them for years, but they are not competitive, granted my LTV is much lower, but I would start with the broker I think, you can get theLloyds quotes on line very quickly though

kjn469

Wh05apk - Parents would be gifting the majority of the deposit - is this a problem or were you suggesting that if I had to repay them it would be a problem?

Helen - I understand that Lloyds offer slightly preferential rates for their current account customers but even taking that into consideration they're not great so I think you're right, a broker might be the best bet.

kjn469

GMS wrote: »

I do not know enough of your circumstances to suggest lenders and doing so would be unfair.

A good broker should be able to help you, although nobody can ensure you are accepted.

It is however important to apply to the correct lender. You could try to do this yourself if you wish. Make sure you research criteria and speak to the lender before applying. Broker would do this for you if you chose that route.

I appreciate what you're saying and thanks for the advice. You mentioned that researching criteria might be a good idea - how is the best way of going about this? Online, the Post Office appear to be the only ones who set out their criteria?

TrickyDicky

kjn469 wrote: »

Wh05apk - Parents would be gifting the majority of the deposit - is this a problem or were you suggesting that if I had to repay them it would be a problem?

No offence, but with an income of £55k why do your parents need to gift you so much? are these new jobs and new incomes?

I just worry that if you've had these salaries a while lenders might wonder where all the spare cash has gone.

kjn469

None taken! I'm 23 and my partner's 24. We only graduated from uni about 2 and a half years ago and I've been in my job for 18 months - we've saved up around 10k between us. I don't think it's that unusual for young people to be helped out by their parents?

Wh05apk

kjn469 wrote: »

Wh05apk - Parents would be gifting the majority of the deposit - is this a problem or were you suggesting that if I had to repay them it would be a problem?

If they are gifting with no repayments, that's fine, only a potential problem if they want repaying.