First Time Buyer advice

simoran1

My girlfriend and I are looking to get our first mortgage and are looking for some advice on how to proceed.

I have heard a good starting place is to visit a mortgage advisor. Is this true and if so can anyone recommend a good one in Newcastle?

In general we know very little about mortgages and are looking for someone to take us through all the available options, both in terms of the types of mortgages and what are the best offers on the market at the moment.

To give some back ground our combined income is £65,000, have around £17,000 in debt (combined loans and credit cards) and we have roughly £1500 disposable income per month after all outgoing (rent, bills, loans, credit cards, household costs etc...)

We would be looking to borrow roughly 90% LTV and have around £12,000 deposit. The houses we are looking at are around 100k price.

Any advice anyone can give is appreciated!

beecher2

Personally I'd wait until you build up your deposit. At the moment your debts are cancelling out your deposit and with a household income of £65k you should be in a better position before buying. 90% LTV mortgages are expensive so you're not going to get a good deal.

If you're desperate to go ahead, take copies of your credit files to a mortgage adviser and see what they say.

Doshwaster

simoran1 wrote: »

My girlfriend and I are looking to get our first mortgage and are looking for some advice on how to proceed.

I have heard a good starting place is to visit a mortgage advisor. Is this true and if so can anyone recommend a good one in Newcastle?

.
First have a chat with your bank. They will have good understanding of your financial situation and will be able to give you an idea of what you go can afford to buy and borrow.

Assuming they don't burst out laughing then try 2 or 3 local independents. Most will give an initial appointment, 30 mins for so, for free. The one I ended up choosing wasn't the cheapest but I felt like I trusted her the most and she was the best at explaining the process (which is important for naive FTBs)

To be honest though, I'm sure every adviser will tell you to clear the debt before looking for mortgages. If you have £1500 spare each month then spend the next 12 months piling it onto the debt and into savings while cutting out all luxuries. If with a year of belt-tightening and (potentially) falling prices you could find yourself in the 20% LTV range and get a much better deal.

If you could clear the debt you would in a excellent position having a good joint income in a part of the world which has low housing costs. I'm originally from the NE myself and I always tell people that if you have a decent income then there is no place better in the country to live.

hcb42

your income is fine for what you want to borrow, but I would agree, significantly reduce/payoff that £17K in the next 12 months, and if you can get a slightly better deposit to reduce the LTV then it will be better for the long term

krisswilliams

PM Sent...

originalmiscellany

I would echo other people here - clear your debts as a priority, then once that's cleared, ask again. Set up a DFW thread here so you can track and we can share in your journey on getting debt free.

Thrugelmir

Do your debts include student loans?

simoran1

No we have student loans but these are not included in the above figures.

Appreciate we have a large amount of debt this seems manageable with our current earnings. Would this amount of debt be something that would deter lenders?

iamana1ias

simoran1 wrote: »

No we have student loans but these are not included in the above figures.

Appreciate we have a large amount of debt this seems manageable with our current earnings. Would this amount of debt be something that would deter lenders?

Absolutely.

iamana1ias

How much interest are you paying on the credit cards? Are you only paying off the minimum each month?

simoran1

Well we spoke with 1 broker (London and Country). Gave them our details and they seemed to believe that based on our finances, the amount we would be looking to borrow wouldn't be a problem.

They have sent a decision in principle letter and have advised us to start searching for properties we would be interested in. Then to come back to them once we have found some we like and they can start searching for some mortgages.

This all seems a little strange to me - I assumed the way to do this would be to get approved for a mortgage amount then to start searching (and subsequently) putting offers in for properties we are interested in. L&C are suggesting the best way to proceed is to find a property, put an offer in and then they will search for a mortgage.

Has anyone had any experience with London and Country? Is the above the best way to go about this process?

@iamana1ias- thanks for the reply. The debt is split like this : -

me

£1800 spread across 3 credit cards

cc1 = £1256 @ 26%APR. I pay £60 per month on this
cc2 = £331 @16% APR. I pay £70 per month off this. Once cleared the amount will be added onto cc1
cc3 = £180 Not sure on the APR - i pay the minimum off this until the others are cleared.

her

£15200 spread across 3 credit cards, 2 loans. Cant be specific with amounts for each as she is away at the moment I know she is only paying off the minimum amount on the cc.

Again thanks for the advice everyone!