Buying my first house and dont have a clue

peainapod

Can someone tell me or at least point me in the right direction ? I have a bad credit rating from a few years back (and now very good with my finances) and I want to get my own house, I have children and feel like we've been stuck renting all our lives !
Where would I start for a mortgage ? Does anyone know a mortgage company that will lend to people like me ? I know I'll pay more interest, but does anyone know a good company that will charge me more because of my credit rating but wont charge me extortionate rates of interest. Many thanks for any advice

PasturesNew

How much deposit have you got?
How much do you earn?
How much do houses cost where you are?
What sort of bad credit?

CloudCuckooLand

define "bad" credit - ccj, defaults, iva, bankruptcy ?
do you have a deposit? what % of the purchase?

G_M

Have you spoken to an independant mortgage broker? Not one in a bank - an IMB or IFA.

peainapod

I'm really sorry its so vague, right now I have nothing, in 12 months I could have about £8000 saved, I earn roughly £13,000-£14,000 (floats between the 2, not a set salary).
For what I'm looking for the price seems to average around £130,000.
I do have bad credit, I have no ccj's, no iva, no bankruptcy, but I do have 1 default that will be gone soon as its been 6 years.
Is there any hope for me ?
Thanks for the help

peainapod

No I hadn't gone to a broker, I was a bit scared to to be honest, you hear such bad things about brokers I thought it was best to come on here and ask you guys

lincroft1710

Sorry but on that income you won't be able to borrow anything like the money you'll need.

peainapod

so what should i do ? I cant rent for life should i squash into a smaller home ? just to have some more credibility ?

jc808

peainapod wrote: »

so what should i do ? I cant rent for life should i squash into a smaller home ? just to have some more credibility ?

buy a cheaper house?
get a better job?
buy with partner?

sonastin

As a very very rough rule of thumb, lenders will consider up to about 4 x a single person's salary. Maybe 2-3 x a joint income. Less if a) they think you can't afford it, b) your income is a bit vague (e.g. self-employed, relying on bonuses, overtime, etc), c) you have a small deposit or d) you have a bad credit record.

Minimum deposit anywhere would be 5%. Realistic minimum deposit would be 10%. Reasonable deposit 15%. A good deposit would need to be upwards of 20-25% of the purchase price.

You need to save hard to build a big deposit. In that time, if you keep your nose clean, your credit record will improve - maybe even clear depending when your 6 years is up. And you'll have a few more years of records to prove your income is reliable even if it isn't fixed. Maybe you can even up your income a bit in that time to speed you on your way. And by then, maybe the big crash will have happened and house prices will come down to something you can afford sooner than it sounds from this doom-and-gloom post!

lincroft1710

On your income an absolute max mortgage would be around £50K.

House prices have risen so much since the 1970s in comparison to wages, that in 2006 (year I took early retirement) no way on my final salary could I afford to buy the house I could very comfortably afford in 1976. And I had a promotion or two in the intervening years.

I'm sorry but I think you may have to continue renting.