Applying for a high LTV mortgage; question about credit scoring

lovepatiala

Hello; please could anyone advise me on the specific points below. I have done a lot of research but not sure about the following points, and how they would impact on the credit score; any constructive advice would be really appreciated , thanks:

I have a £850 official overdraft which I tend to use every month up to £600 ( I don’t exceed it)
Additionally I have a credit card balance of £670; credit limit is £5500;
I have a fixed term loan with my bank, balance outstanding £2000; pay £125 month
My gross salary is £25000 pa

My husband has
Credit card balance £900; credit limit £3800
Store card balance £0; credit limit £1000
Mail order balance £200; credit limit £2400
Gross salary £31000 pa
My questions are:
I understand (FICO), in terms of credit scoring, that amount of total debt must be less than a % of the joint income. Our total debt is £4370; joint income £56000. I think this is okay but please comment if I have missed something.

I am more concerned about the % of debt to the credit limits we have. The debt is £4370; total credit limits are about £13550. On FICO it said that you should aim to have a ratio of below 10%. Any comments please? For example, do you think we need to reduce the debt to get a 90% mortgage offer? Thank-you very much.

kingstreet

I don't think you need to reduce your borrowing to get a 90% mortgage, however I'd suggest trying to get a bigger deposit together to get a better mortgage deal and better affordability.

Either pay down your credit, or increase your deposit. This should ensure you can safely manage any future changes in interest rates.

herbiesjp

Debts are fine.

However 90% of what purchase price?

lovepatiala

Thanks very much for the last 2 replies, its really appreciated. Agree that really we should continue saving/reduce debt. However if we were to apply for a mortgage it would probably be for a property value of £150k to £180K (the lower figure being much more likely as I think we might struggle with our income multiples for the higher one).

Thanks again, a really nice start to my career on the board :T

Any other thoughts or comments are very welcome.